Mutual Non-Disclosure Agreement (NDA) – free template

Overview

A Mutual Non-Disclosure Agreement (NDA) is entered into between two businesses that intend to exchange confidential information — for example in the course of exploring a partnership, a potential investment, or a commercial deal — and each wishes to prevent the other from disclosing or misusing that information. Unlike many jurisdictions, India has no standalone trade secrets statute; confidentiality protection instead rests on ordinary contract law under the Indian Contract Act, 1872, which makes a properly formed confidentiality undertaking enforceable as a binding obligation between the parties, together with the common-law action for breach of confidence, which can, in principle, protect confidential information even absent an express contract where information was shared in circumstances importing an obligation of confidence. In practice, a clearly drafted written NDA remains the primary and most reliable route to protection in India, because it removes the evidentiary uncertainty inherent in relying on an implied common-law duty. Because there is no dedicated statute defining "trade secret" or setting out standardised remedies, the NDA itself must do the work of precisely defining what counts as Confidential Information, who may access it, what uses are permitted, and for how long the obligation survives. A mutual NDA (as opposed to a one-way NDA) is appropriate whenever both parties expect to disclose sensitive information to each other, such as in due diligence for a joint venture, evaluation of a potential supplier or customer relationship, or discussions preceding a merger or investment. Typical carve-outs from confidentiality obligations include information that is already public, was already known to the receiving party before disclosure, is independently developed without reference to the disclosed information, or must be disclosed under a legal or regulatory requirement (in which case advance notice to the disclosing party is customary so it may seek protective measures). The agreement should also specify the term of the confidentiality obligation, since perpetual confidentiality can be difficult to enforce or commercially impractical, and many NDAs instead specify a fixed period (commonly three to five years) following disclosure or termination of the agreement. Where the information exchanged includes personal data (for example, information about individual customers, employees, or contacts of either party), the Digital Personal Data Protection Act, 2023 (DPDP Act) may impose independent obligations on each party as a data fiduciary in respect of that personal data, separate from and in addition to the contractual confidentiality obligations in the NDA. Parties exchanging personal data under an NDA should consider whether additional DPDP-compliant terms (such as purpose limitation and data protection commitments) are needed alongside the general confidentiality clauses. On breach, because Indian law has no specialised trade-secrets remedy regime, an aggrieved party typically seeks an injunction restraining further use or disclosure of the confidential information under the Specific Relief Act, 1963, combined with a claim for damages under ordinary contract law principles (Section 73, Indian Contract Act, 1872) to compensate for losses caused by the breach. Because proving the quantum of loss from misuse of confidential information can be difficult, some NDAs include a genuine pre-estimate of liquidated damages, though courts will scrutinise such clauses for reasonableness rather than enforcing them as an automatic penalty. Given the reliance on general contract and common-law principles rather than a dedicated statute, precise drafting of scope, exclusions, term, and remedies is particularly important for enforceability in India.

Information to customize

• Name of Party A

• Registered address of Party A

• Name of Party B

• Registered address of Party B

• Purpose of the disclosure (e.g. evaluation of a potential partnership)

• Duration of confidentiality obligation (years)

• Will personal data be exchanged?

• Governing law / jurisdiction

• Effective date of the agreement

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Frequently asked questions

Does India have a specific trade secrets law?

No, India does not have a standalone trade secrets statute. Confidentiality protection instead relies on the general law of contract under the Indian Contract Act, 1872, and on the common-law action for breach of confidence, which is why a clearly drafted written NDA is the most reliable way to protect sensitive business information.

What can we do if the other party breaches the NDA?

You can typically seek an injunction to stop further use or disclosure of the confidential information under the Specific Relief Act, 1963, together with a claim for damages under the Indian Contract Act, 1872. Because proving the exact financial loss can be difficult, precise drafting of the confidentiality scope helps strengthen any claim.

Does an NDA need to be stamped or registered in India?

Stamp duty requirements for agreements are set by each state's own stamp legislation and vary by state; whether stamping is required or advisable for an NDA can depend on the state of execution, so this should be confirmed locally rather than assumed to follow a single national rule.

How long should confidentiality obligations last?

There is no fixed statutory term. Many mutual NDAs specify a period of three to five years from disclosure or termination, since perpetual confidentiality obligations can be commercially impractical and harder to justify or enforce. The right duration depends on the sensitivity of the information involved.

Does the DPDP Act affect what we can put in an NDA?

If personal data (about individuals, such as customers or employees) is exchanged under the NDA, the Digital Personal Data Protection Act, 2023 imposes separate obligations on each party as a data fiduciary, in addition to the contractual confidentiality terms. Businesses regularly exchanging personal data should consider whether additional DPDP-specific terms are needed.