Non-Disclosure Agreements (NDA) are confidential contracts legally binding on the parties and involve sharing of sensitive information and the terms within which the information is required to be disclosed. NDAs are formed to keep information private and have clarity on when the information can be disclosed.
These agreements are entered into by businesses and organisations while recruiting candidates for employment or dealing with negotiations.
NDAs are agreements that require the name of the parties, description of the confidential information and when and where it can be used, penalties imposed on breach, duties and obligations of the parties, and miscellaneous provisions.
Non-Disclosure Agreements are governed by the Indian Contract Act, 1872, where it’s nowhere mentioned that registration of NDA is mandatory. But to ensure the validity of NDAs, it is suggested to get them registered under the Registration Act, 1908, and stamped. This will make the agreement more reliable as evidence in court.
NDAs can also create an atmosphere where one party can believe that the other party does not have trust. This can generate differences between the parties and hamper their relationship. NDAs can also be inserted as clauses in contracts.
Non-Disclosure Agreements can be unilateral in cases where a company gets the agreement signed by its employees to keep sensitive information private and confidential. NDAs can also be bilateral where it is signed by two businesses to keep negotiations protected. Multilateral NDAs are signed between three or more parties where one party discloses sensitive information which is to be protected by the other parties.
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