Most NDAs signed in India are American templates with the currency symbol changed. They contain a post-employment non-compete that a section of the Indian Contract Act makes void, a penalty figure that another section turns into a ceiling, and no stamp — which means the document may not be admitted in evidence on the day you need it. All three provisions are below, in the words of the statutes.
An NDA does not make information secret. It is worth beginning there, because a great deal of misplaced confidence follows from believing otherwise.
What an NDA does is create an enforceable obligation in respect of information that is already secret: an obligation to keep it confidential, to use it only for an agreed purpose, to restrict who inside the receiving organisation may see it, and to return or destroy it when the relationship ends. It converts a moral expectation into a contractual one, and it gives you a document to put in front of a judge quickly.
Three things an NDA genuinely gives you.
A defined obligation. Without one, arguing that somebody should have known the information was confidential is a fact-finding exercise. With one, it is a clause.
Speed. The remedy that matters in a leak is an urgent injunction, and an application supported by a signed contract moves faster than one built on inference.
Behaviour. The largest practical benefit is the one nobody measures: most people who have signed a document naming specific categories of information simply behave differently with it.
And four things it cannot do, however it is worded.
It cannot protect information that is already public. Once out, out.
It cannot stop a person using their own general skill and experience. Indian courts draw a firm line between an employer's trade secrets and the knowledge an employee accumulates. The second belongs to the employee.
It cannot stop a lawful compulsion. A court order, a summons, a regulator's direction — a well-drawn NDA carves these out rather than pretending to override them.
It cannot, on its own, decide ownership. Secrecy and ownership are two different questions. Who owns what a developer or agency creates for you belongs in the engagement contract, not in the NDA.
Here is the provision that makes Indian NDA law different from the American law most circulating templates were drafted for. It is one sentence long.
"Every agreement by which any one is restrained from exercising a lawful profession, trade or business of any kind, is to that extent void."
Exception 1 preserves a narrow case: "One who sells the goodwill of a business may agree with the buyer to refrain from carrying on a similar business, within specified local limits, so long as the buyer, or any person deriving title to the goodwill from him, carries on a like business therein, provided that such limits appear to the Court reasonable, regard being had to the nature of the business."
Section 27, Indian Contract Act, 1872 — "Agreement in restraint of trade, void".
Read the words that do the work. "Every agreement" — not every unreasonable agreement. Indian law did not adopt the English test of reasonableness for restraints generally; the section is drafted as a flat rule with a stated exception. "To that extent void" — the offending restraint falls, and the rest of the contract can survive it if the document is drawn so that it can.
And notice what Exception 1 is about. It is about the sale of goodwill — a person selling a business agreeing not to set up next door. It is not about employees, not about consultants, and not about the vendor you are briefing. If your non-compete is not part of a sale of goodwill, that exception is not available to you.
The distinction that decides these cases is when the restraint operates. Two Supreme Court judgments, thirty-nine years apart, set it out.
"Negative covenants operative during the period of the contract of employment when the employee is bound to serve his employer exclusively are generally not regarded as restraint of trade."
The Court added that such a covenant "is not therefore a restraint of trade unless the contract … is unconscionable or excessively harsh or unreasonable or one sided", and drew the distinction expressly: "Considerations against restrictive covenants are different in cases where the restriction is to apply during the period after the termination of the contract than those in cases where it is to operate during the period of the contract."
On what may be protected, the Court distinguished the information disclosed to the employee during the employment from "the general knowledge and experience that he might have gained while in the service of the respondent company", and held that it was disclosure of the former to a rival which required protection.
Supreme Court of India, judgment dated 17 January 1967.
"Under Section 27 of the Contract Act (a) a restrictive covenant extending beyond the term of the contract is void and not enforceable."
And, stating the principle from the other side: "The doctrine of restraint of trade does not apply during the continuance of the contract for employment and it applied only when the contract comes to an end."
Supreme Court of India, H.K. Sema and Dr. A.R. Lakshmanan JJ, judgment dated 22 March 2006.
Put together, the Indian position is unusually clear for something so widely misunderstood.
While the relationship is running — an obligation of exclusivity, of not working for a competitor, of not moonlighting — is generally fine, subject to not being unconscionable, excessively harsh, unreasonable or one-sided.
After it ends — a covenant that restrains the person from exercising their profession, trade or business runs into Section 27, and is generally void and not enforceable.
Send us the one you are using. We will tell you which clauses are doing work, which are decorative, and which are actively creating risk — and quote you for a redraft only if it needs one.
If the post-termination non-compete is generally void, the question becomes practical: what can you still rely on after the consultant has gone, the vendor has been replaced, or the employee has joined a competitor?
| The clause | What it says | After the relationship ends |
|---|---|---|
| Confidentiality | You will not disclose or use the defined confidential information except for the agreed purpose | The strongest of the three. It restrains the misuse of specific information, not the exercise of a profession. This is where your protection actually lives. |
| Non-solicitation | You will not approach our employees, or our customers, for a defined period | Contested, and depends heavily on drafting. Narrow, time-limited and tied to people the person actually dealt with stands a materially better chance than a blanket one. |
| Non-compete (post-termination) | You will not work in this industry / for a competitor / within this area for X months | Generally void. Section 27, and Percept D'Mark in terms. Include it if you wish for its deterrent effect, but do not build your protection on it. |
| Non-compete (during the term) | While engaged by us you will not work for a competitor | Does not arise — but during the term it is generally enforceable, on Golikari. |
| Return and destruction | On termination you will return or destroy all materials and certify that you have | Underrated and very useful. It creates a dated obligation, and a failure to comply is a clean, provable breach that does not require you to show what was misused. |
| Injunctive relief acknowledgment | The parties agree damages are an inadequate remedy and injunctive relief is appropriate | Does not bind the court, but it is standard and it does no harm to have the other side's recorded acknowledgment when you apply. |
The drafting consequence, and it is the single most useful thing on this page. Put confidentiality, non-solicitation and non-compete in three separate clauses, with a severability clause that means what it says. Bundled into one paragraph, a void restraint can take a perfectly good confidentiality obligation down with it. Separated, the void clause falls on its own and the rest stands — which is exactly what "to that extent void" in Section 27 contemplates.
Several countries protect trade secrets by statute. India does not have a dedicated trade secrets legislation. What exists instead is a combination, and knowing which parts you actually have changes how you draft.
What that means when you are deciding how much care to put into the document. In a jurisdiction with a trade secrets statute, a mediocre NDA still sits on top of a statutory floor. In India there is no such floor for a commercial secret. The clause is the protection. That is the honest case for having one drafted rather than downloaded, and it is also why we are setting out the reasoning here rather than just quoting a price.
When an NDA fails in court, the failure is usually here. Either the definition was so wide that the court could not tell what had been protected, or it was so narrow that the thing actually taken sat outside it.
"All information of whatever nature disclosed by the Disclosing Party." A definition that covers the weather and the lunch order tells a judge nothing about what you were protecting, and invites the argument that nothing in particular was.
"The technical specifications set out in Annexure A." Then the person leaves with the customer list, the pricing model and the supplier terms, none of which is in Annexure A.
A general formula, followed by named categories that reflect this particular relationship, plus a marking or confirmation mechanism for anything disclosed orally — and an express statement that the absence of a marking does not by itself take information outside the definition where it would obviously be confidential.
The oral disclosure trap, which we see constantly. Many templates say that information disclosed orally is confidential only if confirmed in writing as confidential within, say, fifteen days. That is a perfectly respectable clause — and in practice nobody ever sends the confirmation. Two years later, the most valuable disclosures in the relationship were made in meetings and are outside the agreement.
Either take the confirmation requirement out, or build the habit of sending the note. Do not leave a clause in a contract that your organisation is never going to comply with.
Clients sometimes ask us to take the exclusions out, on the view that fewer carve-outs means more protection. The opposite is true: an NDA with no exclusions looks unreasonable, and unreasonable documents attract closer scrutiny of the clauses you actually need.
| Exclusion | Why it is fair | The drafting point |
|---|---|---|
| Already in the public domain | You cannot be obliged to keep secret what anybody can read | Add "otherwise than through a breach of this Agreement" — otherwise the breach itself creates the exclusion |
| Already lawfully known to the recipient | They had it before you told them | Require it to be demonstrable from written records predating the disclosure |
| Received from a third party without obligation | A lawful independent route to the same information | "Lawfully" and "without breach of any obligation of confidence" both matter |
| Independently developed | Two people can reach the same answer | "Without use of or reference to the Confidential Information" is the phrase that makes this clause honest |
| Required to be disclosed by law | A contract cannot override a court, a regulator or a statute | Require prompt written notice to you first where lawful, and disclosure limited to what is actually required |
Almost every NDA we are asked to review contains a number. "In the event of breach, the Receiving Party shall pay a sum of ₹50,00,000 as liquidated damages." Clients believe that number is what they will collect. In India it is not, and the reason is statutory.
"When a contract has been broken, if a sum is named in the contract as the amount to be paid in case of such breach … the party complaining of the breach is entitled … to receive … reasonable compensation not exceeding the amount so named or, as the case may be, the penalty stipulated for."
The Explanation adds that "a stipulation for increased interest from the date of default may be a stipulation by way of penalty".
Section 74, Indian Contract Act, 1872 — "Compensation for breach of contract where penalty stipulated for".
Three words decide it: "not exceeding". Indian law does not distinguish, as English law does, between an enforceable liquidated damages clause and an unenforceable penalty and then give full effect to the first. It treats the named sum as an upper limit and awards what is reasonable within it.
What follows for your NDA. The number is worth having — it caps the argument, it signals seriousness, and it is the ceiling on what can be awarded. But you should expect to have to show loss, and in a confidentiality breach loss is notoriously hard to quantify: what is the rupee value of a customer list that a competitor now has?
Which is exactly why the remedy you should be planning for is not money at all.
In a confidentiality dispute the thing you want is not compensation in four years. It is for the information to stop moving, today. That remedy is an injunction, and an NDA is in form precisely the kind of agreement the Specific Relief Act contemplates for one.
"Notwithstanding anything contained in clause (e) of section 41, where a contract comprises an affirmative agreement to do a certain act, coupled with a negative agreement, express or implied, not to do a certain act, the circumstances that the court is unable to compel specific performance of the affirmative agreement shall not preclude it from granting an injunction to perform the negative agreement:
PROVIDED that the plaintiff has not failed to perform the contract so far as it is binding on him."
Section 42, Specific Relief Act, 1963 — "Injunction to perform negative agreement".
Read the proviso, because it is the part that catches people. "Provided that the plaintiff has not failed to perform the contract so far as it is binding on him." If you are seeking to restrain a consultant from disclosing your material while you have not paid their last three invoices, that proviso is the first thing the other side will point at.
Practical consequence: keep your own side clean. Pay what is due, perform what you promised, and document that you did. The strength of an injunction application is decided as much by your conduct as by theirs.
What to do in the first forty-eight hours of a suspected breach, because this is where the remedy is won or lost. Preserve the evidence before anything else — access logs, device and email records, download and drive activity, and the dates. Do not wipe, reimage or reissue the device. Write down the chronology. Then take advice the same day: the force of an interim application decays with every week you wait, and delay is the first thing the other side will argue.
This is the most avoidable failure in the whole subject, and it is invisible until the worst possible moment.
"No instrument chargeable with duty shall be admitted in evidence for any purpose by any person having by law or consent of parties authority to receive evidence, or shall be acted upon, registered or authenticated by any such person or by any public officer, unless such instrument is duly stamped".
The first proviso allows the position to be cured: "any such instrument shall be admitted in evidence on payment of the duty with which the same is chargeable, or, in the case of any instrument insufficiently stamped, of the amount required to make up such duty, together with a penalty".
Section 35, Indian Stamp Act, 1899 — "Instruments not duly stamped inadmissible in evidence, etc." Stamp duty is a state subject; the applicable rate and the state Act or schedule differ.
A developer leaves with the source repository. You have an NDA. You instruct an advocate on a Monday and you want an injunction by Friday. And then somebody asks what duty was paid on the agreement, and the answer is none, because it was signed as a PDF and emailed.
It is curable — that is what the proviso is for. What it costs you is the thing you had least of: time, at the exact moment when speed was the whole value of having the document. Pay the duty when you sign, not when you sue.
Stamping is not registration. They are different statutes doing different jobs and people conflate them constantly. An NDA does not create, declare, assign, limit or extinguish any right in immovable property, so the compulsory registration provisions of the Registration Act, 1908 do not apply to it — an NDA is not registered. Stamping under the Stamp Act is a separate question and it does apply. When we draft an NDA we tell you the duty for your state and arrange the stamping; it is quoted separately at actuals because it is a government charge and not ours to mark up.
Almost all NDAs are now signed electronically, and clients ask whether that is enough. As a matter of contract formation it is.
"Where in a contract formation, the communication of proposals, the acceptance of proposals, the revocation of proposals and acceptances, as the case may be, are expressed in electronic form or by means of an electronic records, such contract shall not be deemed to be unenforceable solely on the ground that such electronic form or means was used for that purpose."
Section 10A, Information Technology Act, 2000 — "Validity of contracts formed through electronic means".
Validity is settled. Proof is the part to plan. The question in a real dispute is never "can a contract be electronic" — it is "can you establish, to a court's satisfaction, that this person signed this version on this date". Three practical levels, in ascending order of strength:
Weakest: a scanned signature pasted into a PDF and emailed, with no audit trail. It works until it is denied.
Better: a reputable e-signature platform with a signing certificate and an audit trail recording the signatory, time, email and IP.
Strongest: an Aadhaar-based or digital signature certificate execution, or wet ink on a properly stamped document, with each party holding an original.
Whichever you use, keep the audit trail with the contract, not in whoever's inbox happened to send it. The person who ran that platform account will have left the company by the time you need it.
If what you are handing over includes customer records, employee data, health information, identifiers or anything else about identifiable individuals, the NDA is no longer your only obligation and contract is no longer the only source of liability.
"A Data Fiduciary may engage, appoint, use or otherwise involve a Data Processor to process personal data on its behalf for any activity related to offering of goods or services to Data Principals only under a valid contract." (sub-section (2))
"A Data Fiduciary shall protect personal data in its possession or under its control, including in respect of any processing undertaken by it or on its behalf by a Data Processor, by taking reasonable security safeguards to prevent personal data breach." (sub-section (5))
Section 8, Digital Personal Data Protection Act, 2023.
"… any person including an intermediary who, while providing services under the terms of lawful contract, has secured access to any material containing personal information about another person, with the intent to cause or knowing that he is likely to cause wrongful loss or wrongful gain discloses, without the consent of the person concerned, or in breach of a lawful contract, such material to any other person, shall be punished with imprisonment for a term which may extend to three years, or with fine which may extend to five lakh rupees, or with both."
Section 72A, Information Technology Act, 2000 — "Punishment for disclosure of information in breach of lawful contract".
Two consequences worth acting on.
An NDA is not a data processing agreement. Where a vendor processes personal data for you, the statute contemplates a contract dealing with that processing — purpose, security, sub-processing, deletion, breach notification. A generic secrecy clause is not that document. Ask for both, or for one document that does both jobs explicitly.
Section 72A is a criminal provision and it attaches to the contract. Breaching a confidentiality obligation in respect of personal information is not only a civil matter, and that is a fact worth both sides understanding at the point of signature rather than afterwards.
Tell us what is actually being handed over and to whom. Where personal data is involved we will say so and draft for it, rather than handing you a secrecy clause that was never designed to carry that weight.
| One-way (unilateral) | Mutual (bilateral) | |
|---|---|---|
| Use it when | Only you are disclosing — hiring a freelancer, briefing a vendor, sharing a dataset, onboarding an employee | Both sides will disclose — joint venture, acquisition talks, technology partnership, due diligence, most investor conversations past the first meeting |
| Drafting tone | Can be firmly in the discloser's favour, within reason | Must be balanced, because you will be on both sides of every clause |
| The common mistake | Signing the other side's one-way NDA as the receiving party when you will also be disclosing — you take all the obligations and get none of the protection | Copying a one-way template and adding "and vice versa", which leaves half the clauses pointing the wrong way |
| Negotiation reality | Usually signed as presented | Usually negotiated on three points: definition width, survival period, and governing law and forum |
Most NDAs contain one period where they should contain two, and the resulting ambiguity is a gift to whoever wants out of the obligation.
How long the arrangement runs — the window during which disclosures may be made under this agreement. Often tied to the underlying engagement, or a stated period such as two years.
How long the confidentiality obligation continues after the term ends, in respect of everything disclosed during it. Three to five years is ordinary for commercial information.
For things with no natural shelf life — a formula, a recipe, an algorithm, a source list — a perpetual obligation is defensible. It is far more defensible when it applies to a defined category than when it is applied to every scrap of information the agreement touched, which reads as overreach.
The sentence to check in any NDA you are handed: does the confidentiality obligation end when the agreement ends? A surprising number say, in effect, that the obligations "shall remain in force during the term of this Agreement" — which means that on the day the relationship ends, so does your protection. That is the opposite of what the document was for.
Full legal names, entity type, registered addresses, and the authorised signatory. For a company, whoever signs should be authorised to; for a group, decide whether affiliates are covered and name them rather than gesturing at them.
The single most underrated clause. Define why the information is being disclosed — "evaluating a possible investment", "performing the services under the engagement letter dated X". The purpose clause is what makes "use" restrictions meaningful, and without it you only have a non-disclosure obligation, not a non-use one.
General formula plus named categories, with the oral-disclosure mechanism decided honestly. See above.
The five, drafted properly. See above.
Not to disclose; not to use except for the Purpose; to apply at least the same degree of care as for its own confidential information and in any event no less than reasonable care; to restrict internal access to those who need it and who are themselves bound.
To named categories — employees, professional advisers, group companies — each on terms no less protective, with the receiving party remaining responsible for their compliance. That last phrase matters: without it, the obligation evaporates the moment the information is passed on internally.
Prompt written notice to you where lawful, cooperation in seeking protective relief, and disclosure limited to what is legally required.
Disclosure grants no licence, assignment or other right in the information or in any intellectual property, and the discloser gives no warranty as to accuracy or completeness.
On termination or on demand, return or irretrievably destroy, including copies and derived material, with written certification — subject to a realistic carve-out for backup archives and for retention required by law, which remain subject to confidentiality.
Two clocks, stated separately. See above.
Acknowledgment that damages may be inadequate and that injunctive relief is appropriate; the named sum, if any, understood as the Section 74 ceiling it is.
Narrow, time-limited, and confined to people the receiving party actually dealt with. Separate from everything else, so that if it falls it falls alone.
Given Section 27's "to that extent void", the severability clause is load-bearing in an Indian NDA, not boilerplate. It should say that an unenforceable provision is severed and the remainder continues in full force.
Indian law, and a named court — or arbitration, with interim relief from a court expressly preserved. Name a specific court, not a city.
Where notices go and how, whether counterparts and electronic execution are agreed, and who signs with what authority.
"An NDA" is not one document. What the clause set should look like depends entirely on who is on the other side and what you are actually afraid of.
| Situation | Shape | The clause that matters most | Pair it with |
|---|---|---|---|
| Hiring an employee | One-way, inside the employment contract rather than alongside it | Confidentiality with survival, plus an exclusivity obligation during the term. Keep the post-termination restraint separate and expect it to be weak. | Employment agreement |
| Engaging a freelancer or agency | One-way, but check whether they will disclose their own methods back to you | Ownership of work product — which is not an NDA clause at all. The NDA governs secrecy; ownership belongs in the engagement contract. | Freelance agreement · Consultancy agreement |
| Briefing a vendor or supplier | One-way, or mutual if they share pricing structures | Permitted disclosures — their sub-contractors are the leak, and they must be bound and the vendor responsible for them | Vendor agreement · Service level agreement |
| Investor or acquisition discussions | Mutual | That the existence and terms of the discussions are themselves confidential — usually the most sensitive item, and usually omitted | MoU drafting |
| Joint venture or technology partnership | Mutual, and longer | No-licence and background-IP clauses, plus what happens to jointly developed material | Service agreement · MoU |
| Handing over customer or employee data | One-way, plus a data processing clause set | Security safeguards, sub-processing, deletion and breach notification — DPDP Act obligations sit alongside the contract | Privacy policy |
People usually arrive at this page in one of two states: about to sign something, or having discovered that somebody has taken something. For the second, the order of operations matters more than the law.
| What | Who charges it | Notes |
|---|---|---|
| Our drafting | Us | From ₹1,500, shown on the service page before you order. One-way or mutual, drafted to the situation rather than filled into a template. |
| Stamp duty | The state government | At actuals. Fixed by each state and not ours to mark up. We tell you the figure for your state before it is paid. |
| Registration | — | Not applicable. An NDA is not registered. |
| Turnaround | — | 1 – 2 days for a standard NDA once we have the facts. Faster where it is urgent; tell us on the call. |
| Review of an NDA you were handed | Us | Send it before you sign. We will tell you which clauses are doing work and which are creating risk, and quote for a redraft only if it needs one. |
Those two answers decide the clause set. An NDA drafted for a freelancer is not the one for an acquisition conversation, and neither is the one for handing customer data to a vendor. Placing the order is free and you pay after the work is done.
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