NDAs Enforceability in India | Legal Guide

What is an NDA??

A Non-Disclosure Agreement (NDA) is a legally binding contract where one or both parties agree not to disclose confidential information shared between them. NDAs are often used in business deals, employment contracts, partnerships, and collaborations to prevent misuse of proprietary data

Types of NDAs

1. Unilateral NDA – Only one party discloses confidential information, and the other is bound to protect it.
   2. Bilateral NDA – Both parties share confidential information and are bound to maintain secrecy.
   3. Multilateral NDA – More than two parties share sensitive data, requiring mutual protection.

Legal Enforceability of NDAs in India

NDAs in India are enforceable under the Indian Contract Act, 1872, provided they meet the following conditions: 
– Offer and acceptance between parties. 
– Lawful consideration. 
– Lawful object and mutual consent. 
– Parties must be competent to contract. 

There is no fixed amount; generally, it ranges between 20% to 30% of the earning spouse’s income.

However, NDAs cannot impose unreasonable restrictions on trade or professional activity, as per Section 27 of the Indian Contract Act. Courts in India generally enforce NDAs only to the extent that they protect confidential information without restraining lawful business practices.

Key Provisions in an NDA

For an NDA to be effective, it should include: 
– Definition of “confidential information.” 
– Purpose of disclosure. 
– Duration of confidentiality obligation. 
– Exclusions from confidentiality (e.g., publicly available data). 
– Remedies for breach.

Remedies for Breach of NDA

If an NDA is violated, the aggrieved party may seek legal remedies such as: 
– Injunctions – To prevent further misuse of confidential data. 
– Damages/Compensation – Monetary relief for losses caused by the breach. 
– Specific Performance – Enforcement of the NDA terms by court order

Landmark Judgments in India

– Niranjan Shankar Golikari vs. The Century Spinning & Mfg. Co. Ltd. (1967) – The Supreme Court upheld the enforceability of confidentiality obligations during employment. 
– Pepsi Foods Ltd. vs. Bharat Coca-Cola Holdings Pvt. Ltd. (1999) – Courts protected trade secrets and confidential business information under NDAs)

Conclusion

NDAs play a vital role in protecting sensitive information in India. While they are legally enforceable, they must be drafted carefully to avoid unreasonable restrictions under Indian law. A well-drafted NDA ensures trust, transparency, and legal protection for businesses and individuals alike

How to Contact Corpsage Legal LLP?

To connect with us for contract management services for your business, follow any of the below-mentioned ways:

1. Email: Send us an email with your specific requirements for info@corpsagelegal.com
2. Mobile: Call us at (+91) 8383943889 or (+91) 8588998935
3. Online Form: Fill out the complete form available at https://corpsagelegal.com/contact/
4. Visit Us: You can visit us at our office in Sector 63, Noida, Uttar Pradesh, India.

Focus Keywords:

• Non-Disclosure Agreement India

• NDA enforceability in India

• Are NDAs legally binding in India

• NDA laws in India

• NDA validity India

• Non-disclosure agreement enforceability India

• Confidentiality agreement enforceability India

• Legal validity of NDA India

• Indian contract law NDA

• Enforceable NDA in India