non-disclosure agreement

A non-disclosure agreement (NDA) is a contract under which one or both parties agree not to disclose, and to use only for a stated purpose, confidential information they receive. It is used in employment, business negotiations, technology licensing and investment.

It is enforceable as an ordinary contract under the Indian Contract Act; a court may grant an injunction to restrain disclosure and award damages. An NDA protecting genuine trade secrets during and after employment is generally valid, but a clause that in effect stops an ex-employee from working in his field after leaving is a restraint of trade and void under s.27, except where it falls within the statutory exception for sale of goodwill.

Example

The former employee was restrained by injunction from using the client list he had taken, as that would breach the non-disclosure agreement.

In Indian law

• Section 27, Indian Contract Act, 1872 (agreement in restraint of trade)

See also

contract · restraint of trade · injunction · memorandum of understanding

Read more in the study notes

• Mergers and acquisitions: types, reasons, process and regulation (Financial Management)
• Industrial Designs, Layout-Designs and Trade Secrets (IPR II)
• Designs, Integrated Circuits, GIs and Confidential Information: History, Significance and Interface (Law of Designs)
• Protecting Trade Secrets: Legislative Measures, Technology Transfer Agreements and NDAs (Law of Designs)
• Protection of Traditional Knowledge (Law of Designs)
• Semiconductor Layout-Designs and Trade Secrets (Study of Industrial and Intellectual Property Rights)