A non disclosure agreement is a special type of agreement in which the parties entering into it should make sure that information exchanged amongst them should remain confidential and there must not be any sort of leakage of the secret information.

Non disclosure agreement commonly known as NDA has become very popular these days due to growing digital mass communication. A non disclosure agreement can be entered by any number of parties consisting either of whole company as a single unit or individuals.

In corporate world where transaction of merger and acquisition, mutual business takes place NDA plays a very vital role in making those deals successful as it binds both the parties before entering the deal to take care of the secrecy of the information which is necessary to share amongst them for the sake of transaction.

There are certain types of NDA in the corporate world namely

  • Unilateral NDA: In this type of NDA, two parties are involved. Out of the two, only one party discloses confidential information and expects the other party to prevent the information from any further disclosure.
  • Bilateral NDA: In this type of NDA, two parties are involved and both the parties disclose confidential information to each other with an intention to protect and secure the information from external parties.
  • Multilateral NDA: In this type of NDA, three or more parties are involved, out of which one of the parties discloses a piece of confidential information and the other parties promise to have that information protected from any further disclosures. 

Requirements for an NDA

NDAs may be customized to any degree but there are six major elements that are considered essential:

  • The names of the parties to the agreement
  • A definition of what constitutes confidential information in this case
  • Any exclusions from confidentiality
  • A statement of the appropriate uses of the information to be revealed
  • The time periods involved

Time frame of NDA

Because each NDA is distinct, it will endure a different amount of time. An NDA is usually for a period of one year to ten years, although it might be indefinite depending on the information that needs to be kept hidden.

What if NDA is breached ?

If an NDA is broken, the violating party risks being sued and may be obliged to pay monetary penalties as well as other relevant fees, according to the conditions of the NDA. Mostly when NDA is breached the civil liabilities are imposed on the breaching party but in certain cases parties breaching the NDA may incur other proceedings also.


NDA are significantly important for the corporate transactions and while dealing with this a well guidance of attorney having sound knowledge of business laws must be taken into considerations and issues coming in between must be resolved before entering into the deal to avoid the future inconsistencies.

When drafting an NDA, be as specific as possible so that all parties understand what information can and cannot be shared, as well as the consequences of information leakage.

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