7 Considerations While Drafting a Non-Disclosure Agreement (NDA)

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Proper Definition of Confidential Information: Confidential information should be specifically defined for both the parties. Mostly generic definition is used to include a broad category of information, which is not advisable. Proper Definition of Confidentiality Obligations & Right to Take Action: Based on the same principle as explained above, confidential obligations for each party should be defined for both the parties, which again can be same or different for each party. Inclusion of Related Clauses in NDA: Non-Compete Clause, Assignment of Intellectual Property Rights (IPR), No Warranties, Non-solicitation: a non-solicitation clause can be included in the agreement with proper definition of scope, intent and duration, all of which can be practically enforced and justified. F Term (Duration) of NDA: may or may not be same as the term of contractual obligations, and hence, specific definition of term is required. Perpetual clauses should be avoided unless the same are within the context of discussions between both the parties. NDA Executed by Authorized Signatory: full name and designation of parties should be included to make it legally binding. Specifically Define Non-Disclosure and Non-Use Provisions In both types of NDA – both mutual and one-sided, the agreement should include separate non-disclosure and non-use provisions. Residual Clauses Residual Clauses should be excluded from NDA as they are mostly friendly to the receiving party by specifying exceptions to restrictions against use & disclosure of confidential information.

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