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Non-Disclosure Agreement
I need a non-disclosure agreement to protect sensitive business information shared with a potential vendor during preliminary discussions, ensuring confidentiality for a period of 3 years, with specific clauses on data handling and penalties for breaches.
What is a Non-Disclosure Agreement?
A Non-Disclosure Agreement creates a legal shield around your confidential business information. It's a binding contract that stops people from sharing your trade secrets, customer data, or other sensitive details with others. In India, these agreements are legally enforceable under the Indian Contract Act and help protect intellectual property rights.
Companies use NDAs when working with employees, contractors, or business partners who need access to private information. Breaking an NDA can lead to serious consequences, including lawsuits and compensation claims in Indian courts. The agreement stays valid even after the business relationship ends, keeping your secrets safe long-term.
When should you use a Non-Disclosure Agreement?
Use a Non-Disclosure Agreement before sharing sensitive business information with anyone outside your core team. This includes hiring new employees, discussing potential partnerships, outsourcing work to contractors, or negotiating with investors. Indian companies often need NDAs when sharing financial data, product designs, or manufacturing processes.
The timing matters - get the NDA signed before any confidential discussions begin. This is especially crucial in tech hubs like Bangalore and Mumbai, where intellectual property protection is vital. Many Indian startups use NDAs during funding rounds, client negotiations, and when working with overseas partners to safeguard their innovations and business strategies.
What are the different types of Non-Disclosure Agreement?
- Employee Non Disclosure And Confidentiality Agreement: Protects company secrets when hiring staff, typically lasting beyond employment
- Business Confidentiality Agreement: Used between companies during partnerships or negotiations, often mutual in nature
- Design Confidentiality Agreement: Specifically protects intellectual property in design projects and creative collaborations
- Real Estate Non Disclosure Agreement: Safeguards property details and transaction information during real estate deals
- NDA For Startups: Tailored for emerging companies, protecting innovative ideas during investor meetings and development
Who should typically use a Non-Disclosure Agreement?
- Business Owners: Initiate NDAs to protect trade secrets, client lists, and business strategies when working with partners or contractors
- HR Managers: Handle employee NDAs during recruitment and onboarding processes in Indian companies
- Legal Teams: Draft, review, and customize agreements to ensure compliance with Indian contract law
- Startup Founders: Use NDAs during investor meetings and when discussing innovative ideas with potential partners
- Consultants and Freelancers: Sign NDAs before accessing client data or sensitive project information
- Technology Companies: Protect intellectual property when outsourcing development work or sharing technical specifications
How do you write a Non-Disclosure Agreement?
- Identify Parties: Gather full legal names, addresses, and registration details of all involved companies or individuals
- Define Scope: List specific confidential information to be protected, including trade secrets, processes, or business strategies
- Set Duration: Decide how long the confidentiality obligations will last after signing or project completion
- Choose Terms: Specify permitted uses, sharing restrictions, and return/destruction of confidential materials
- Add Exceptions: Include standard carve-outs for public information or legally required disclosures
- Use Our Platform: Generate a legally-sound NDA template customized for Indian law, reducing drafting errors and ensuring enforceability
What should be included in a Non-Disclosure Agreement?
- Parties Section: Complete legal names and addresses of all parties involved, with clear identification of disclosing and receiving parties
- Definition Clause: Detailed description of what constitutes confidential information under Indian law
- Scope of Obligations: Specific duties to maintain secrecy and permitted uses of confidential information
- Time Period: Clear start date and duration of confidentiality obligations
- Return of Information: Requirements for handling or destroying confidential data after agreement ends
- Remedies: Consequences of breach and compensation terms under Indian Contract Act
- Governing Law: Explicit mention of Indian jurisdiction and applicable state laws
- Execution Block: Proper signature spaces with witness provisions as required by Indian law
What's the difference between a Non-Disclosure Agreement and a Non-Compete Agreement?
While Non-Disclosure Agreements and Non-Compete Agreements both protect business interests, they serve distinct purposes under Indian law. NDAs focus specifically on protecting confidential information, while non-compete agreements restrict competitive activities.
- Scope of Protection: NDAs safeguard specific confidential information and trade secrets, while non-compete agreements prevent employees or partners from competing directly with your business
- Duration and Enforcement: NDAs can last indefinitely for trade secrets, but non-compete agreements must have reasonable time limits to be enforceable in Indian courts
- Geographic Reach: NDAs apply anywhere the information travels, while non-compete agreements must specify reasonable geographic boundaries
- Legal Scrutiny: Indian courts generally favor enforcing NDAs, but closely examine non-compete agreements to ensure they don't unreasonably restrict employment rights
- Typical Usage: NDAs are common in all business relationships, while non-compete agreements are mainly used with employees and business partners
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