Non Disclosure Agreement is a legal agreement to keep the information is confidential between two parties and the extent to which its disclosure is restricted to third parties.
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A Non-disclosure Agreement (NDA), which is also referred to as Confidentiality Agreement, is an agreement that protects sensitive and proprietary information pertaining to the business and prevents the person from leaking out such information to any third party.
A well drafted NDA contains the following:
The different laws which govern various aspects of NDA in India are as follows:
A business contains a lot of sensitive information pertaining to the business plan, product, service, marketing strategy, etc. If this information gets leaked to the competitors, it can cause a substantial amount of loss to the business. Therefore, it is pertinent to enter into an NDA with anyone with whom the business shares any sensitive information.
An NDA should be entered with co-founders, employee, consultant, supplier, distributor, intermediary, investor, etc. with whom any sensitive information pertaining to the company is shared.
There is no difference between a non-disclosure agreement (NDA) and a confidentiality agreement. The title of these documents are sometimes used interchangeably. Non-disclosure and confidentiality agreements both protect confidential information from being shared with third parties. Both these Agreements serve the same legal function.
Yes, you must. However, in case you’re entering into an employment agreement with an employee or a consultancy agreement with a consultant, you may just include an NDA clause in such Agreements, and there would not be any need to enter into a separate Agreement for this purpose.
Yes, you should, as in the due diligence process, you would need to share much sensitive information with such an investor. You must enter into an NDA or include a binding NDA clause in the Term Sheet signed with such investor.
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