Non Disclosure Agreement with Consultant / Professional

INTRODUCTION

Every entrepreneur wants his business to grow leaps and bound. And it may not be possible for every related work to be managed in house. Sometimes, the work needs to be performed by some expertise and experienced person. Therefore, the entrepreneur needs to hire some consultant for the same. However, many times, confidential business information is shared with them so that they can perform their work smoothly. It is very important to protect such information being leaked out into the market/ rivals. Hence, one can enter into a Non-Disclosure Agreement with the consultant/professional to safeguard all such business information shared with them during the validity of the Non-Disclosure Agreement (NDA).

CLAUSES TO BE INSERTED IN A NON DISCLOSURE AGREEMENT

1. Define Confidential Information: It is very important to define what is to be considered as confidential information. The Entrepreneur is the right person and has the liberal power to define Confidential Information as per the need of his business.
2. The condition for Non-Disclosure:  It is very important to set out the circumstances under which the Professional/ Consultant is strictly prohibited to share the Confidential Information.
3. Exception for Non-Disclosure: Sometimes a situation occurs that it becomes very essential for the Consultant to disclose the information, in order to face whose situation, it is always suggested that there must be some exemption from No sharing of information’s like :
   • is, at the time of disclosure, publicly known and made generally available in the public domain;
   • becomes, at a date later than the time of disclosure, known to the trade or the public otherwise than a wrongful act or negligence or breach of this Agreement of or by the Consultant;
   • is known or possessed by Consultant free from any obligation of confidentiality, as evidenced by Consultant written records immediately before receipt of the Confidential Information from Entrepreneur;
   • is disclosed to Consultant in good faith by a third party and the Consultant was not aware that the third party had a duty of confidentiality to Entrepreneur in respect of the information; or
   • is independently developed by Consultant without the use of or reference to Entrepreneur Confidential Information, provided there must be some adequate documentation to confirm such independent development. 
4. The validity of the Agreement: The validity period for which the agreement shall stand in effect needs to be defined specifically. This clause helps to determine the liability of the concerned in case there is a breach of any of the clause of the Agreement.
5. Ownership: The Entrepreneur shall be the sole owner of the documents prepared/ acquired/ made during the tenure of the Agreement.
6. Handover of Confidential Information: It is the responsibility of the Consultant to handover all the confidential information which he has received while working during the agreement to the Entrepreneur once the agreement is terminated.
7. Indemnity Clause: There should be a clause to indemnify the other party in case of breach of any clause of the NDA so that the loss incurred can be made good.
8. Notice: The address of each party shall be stated wherein all the written communication including notices are to be served.
9. Severability Clause: The clause regarding severability of any clause of the agreement, which becomes invalid, for the time being in force, is to be severed from the agreement in such a way that only that clause becomes inoperative without affecting the entire agreement.
10. Binding Clause: The clause of the nondisclosure agreement shall be binding on both the Parties.
11. Bribery Clause: The Entrepreneur shall not promote/ pursue any work by payment of a bribe. Further Consultant shall not do any act of bribe in order to take an assignment from Entrepreneur.
12. Representation and Warranties: The parties represent and warrant that they have been duly authorized to sign and submit the necessary agreement and documents on behalf of the Parties.
13. Jurisdiction Clause: The agreement should define the jurisdiction of the Court which can approach in case of any dispute between the Parties.