Non-Disclosure AgreementNDA
Also known as: Confidentiality agreement
A non-disclosure agreement (NDA), also called a confidentiality agreement, is a contract that defines what information counts as confidential and obliges the receiving party not to share or exploit it outside the agreed purpose. NDAs can be one-way, where only one side discloses secrets, or mutual, where both sides exchange sensitive information — common when two companies explore a partnership or acquisition. In hiring, they are routinely signed by employees, contractors, and sometimes candidates who are given access to sensitive material.
A well-drafted NDA sets out the definition of confidential information, the permitted uses, the obligations of the receiving party, how long confidentiality must be maintained, and what is excluded — typically information that is already public, independently developed, or lawfully obtained elsewhere. Unlike a non-compete, an NDA does not stop someone from working for a competitor; it only stops them from taking or leaking protected information. That distinction is why NDAs are far more widely enforced than post-employment non-competes.
For Global Capability Centres, NDAs are a core control. Because a GCC often handles the parent company’s intellectual property, source code, customer data, and unreleased roadmaps, confidentiality obligations are built into employment contracts and reinforced with data-security policies. In India, where post-employment non-competes are largely unenforceable, NDAs and confidentiality clauses are one of the main legally durable ways to protect trade secrets after an employee leaves, since safeguarding genuine confidential information is treated as a legitimate interest even where restraints on competing are not.
Frequently asked questions
What is the difference between an NDA and a non-compete agreement?
An NDA stops someone from disclosing or misusing confidential information, while a non-compete stops them from working for a competitor or starting a competing business. An NDA protects specific information; a non-compete restrains where a person can work. NDAs are generally far more enforceable, including in jurisdictions like India where post-employment non-competes are void.
Are NDAs enforceable in India?
Yes. Non-disclosure and confidentiality agreements are generally enforceable in India, because protecting genuine confidential information and trade secrets is treated as a legitimate business interest. This is different from post-employment non-compete clauses, which are usually void under Indian law.
What is the difference between a one-way and a mutual NDA?
A one-way (unilateral) NDA binds only the party receiving confidential information, and is common when an employer shares secrets with an employee or contractor. A mutual (bilateral) NDA binds both parties to protect each other’s information, and is used when two organisations exchange sensitive material, such as during a partnership or acquisition discussion.
How long does an NDA last?
The confidentiality obligation usually lasts for a fixed term stated in the agreement, often several years, and can survive the end of the employment or business relationship. For genuine trade secrets, some NDAs require confidentiality to be maintained indefinitely, for as long as the information stays secret.