Non-Disclosure Agreements in India: What Makes One Enforceable

Define what is confidential

A clause covering all information disclosed by the disclosing party is too broad to enforce. Courts prefer a definition that identifies categories — technical data, customer lists, pricing, source code, business plans — and a mechanism for marking disclosures as confidential.

Where oral disclosure is contemplated, require written confirmation within a stated period. Without it, disputes become arguments about what was said in a meeting two years ago.

The standard carve-outs

These are not concessions. An agreement without them purports to restrain the use of public information, which weakens the whole clause.

• Information already in the public domain, or entering it other than through breach.
• Information already in the receiving party's possession before disclosure.
• Information independently developed without reference to the disclosed material.
• Information lawfully received from a third party without restriction.
• Disclosure required by law or by a court or regulator, usually with a notice obligation.

Duration

A perpetual obligation is attractive to the disclosing party and frequently unenforceable in practice. Three to five years is conventional for commercial information, with trade secrets sometimes carved out for an indefinite period.

Separate the term of the agreement from the survival of the confidentiality obligation. The agreement may end after a year while the obligation continues for five.

Remedies

Damages for breach of confidence are notoriously difficult to quantify. The practical remedy is an injunction, and Section 41 of the Specific Relief Act allows one where damages would be inadequate.

An acknowledgement in the agreement that breach would cause irreparable harm and that injunctive relief is appropriate is standard, and while not binding on a court it helps frame the application.

Frequently asked questions

### Are NDAs enforceable in India?

Yes, as contracts under the Indian Contract Act, provided the restraint is reasonable and the confidential information is adequately defined. Section 27 invalidates agreements in restraint of trade, so an NDA drafted so broadly that it prevents the recipient working in the sector may be read down.

### How long should an NDA last?

Three to five years is conventional for commercial information. Perpetual obligations are common in drafting but harder to enforce; a defined term with a separate, longer carve-out for genuine trade secrets is more robust.

### Does an NDA need to be stamped?

Yes, as an agreement under the applicable State stamp legislation. An insufficiently stamped agreement is inadmissible in evidence until the duty and penalty are paid, which is precisely the moment you would be relying on it.