Confidentiality Agreement

A start-up founder in Andheri is about to show her customer list and pricing model to a possible investor. Once she has spoken, she cannot take the words back. Before the meeting, the investor signs one or two pages saying the information may be used only to evaluate the deal and must not be passed on. That paper is a confidentiality agreement, often called an NDA. What makes such a short document worth enforcing in a court?

In two minutes

A confidentiality agreement is a contract by which one or both parties promise to keep specified information secret and to use it only for a stated purpose; its strength lies in a precise definition of confidential information, clear exclusions, a fixed term and remedies, and it must not become a restraint of trade void under s.27 of the Contract Act.

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