Updated: Oct 24, 2019

What is a Confidentiality and Non-disclosure Agreement?

A Confidentiality Agreement is a type of agreement between two or more parties which helps to maintain the confidentiality (or secrecy) of information shared amongst these parties. A Non-disclosure Agreement ensures that information shared amongst two or more parties is not disclosed (or revealed) to any third party. Depending on the sharing of information, the agreement can either be unilateral / one-way (where one party discloses confidential information) or bilateral / two-way (where both the parties disclose confidential information) or multilateral (where more than two parties disclose confidential information).

What kind of information can be protected?

Each and every kind of information which is the basis of a new or novel idea to be discussed amongst the signatory parties can be protected. This information should be confidential in nature and not open to public. e.g. Confidential information for launch of a new product is such kind of communication which requires secrecy from the world at large and must pertain to that new product which is being produced and unveiled.

Are the agreements legal?

Yes, these agreements are valid and enforceable under the Indian laws and are governed by the Indian Contract Act.

When should such agreement be executed?

A Confidentiality and Non-disclosure agreement must be executed when the information to be shared is sensitive in nature and that such agreement must be executed before any information is shared. Few examples of confidential information are Intellectual Property Rights, trade secrets, product processes, technical know-how, costing and financial plans, strategies and proposals, commercial and business information, etc.

In which scenarios are these agreements helpful?

Such agreements are extremely beneficial when the confidential information is being disclosed to new employees at the time of joining, independent contractors, prospective investors or business associates, new clients or consultants, etc.

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