Summary
This post provides structured guidelines on the essential do's and don'ts for drafting an effective non disclosure agreement under Indian law. It highlights the importance of clear definitions, specifying the purpose, and controlling access to confidential information. The post also warns against accepting indefinite terms, broad indemnity clauses, and foreign jurisdiction. Readers are advised to consult a legal professional for specific advice, as these guidelines are broad and non-exhaustive. The content adopts an analytical, objective approach to NDA best practices.
Original Date of Publication: November 26th, 2009
Please note that the Do’s and Don’ts provided hereunder are broad and non-exhaustive guidelines. Kindly consult a lawyer for specific advise.
Do’s
1. Define the meaning of the term Confidential Information to cover all kinds of information that may be disclosed. Exclusions to confidential information may be included within the definition.
2. The purpose for which confidential information is provided must be lucidly stated in the agreement.
3. The parties permitted to access the confidential information must be clearly provided.
4. Ensure that the person receiving the confidential information is under obligation to sign stringent instruments of confidentiality with persons to whom disclosure is permitted.
5. Include a provision for the return of Confidential Information at the end of term of NDA or on termination of NDA; It is advised to make such return time bound.
6. Always define the ownership of Intellectual Property disclosed and developed based on the confidential information disclosed.
7. The term of the non-disclosure must be clearly stated.
8. Ensure that confidentiality obligations survive the termination of the agreement.
Don’ts
1. Do not accept an indefinite term for the agreement. 2. Avoid using broad and general language for defining the purpose of disclosure. 3. Watch out for broad indemnity and liability clauses. 4. Avoid accepting foreign law as governing law for the agreement. 5. Avoid accepting foreign jurisdiction for the agreement. 6. Do not allow access of confidential information to too many persons.
Note: Please note that the Do’s and Don’ts provided hereunder are broad and non-exhaustive guidelines. Kindly consult a lawyer for specific advise.
Authors: Dr. Kalyan Kankanala and Ms. Vintee Mishra
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