Contract Drafting India

 Time Periods. The non disclosure provisions of this Agreement shall survive the termination of this Agreement and Receiving Party's duty to hold Confidential Information in confidence shall remain in effect until the Confidential Information no longer qualifies as a trade secret or until Disclosing Party sends Receiving Party written notice releasing receiving party from this Agreement, whichever occurs first.

Ans:  Exclusions from Confidential Information. Receiving Party's obligations under this Agreement do not extend to information that is: (a) publicly known at the time of disclosure or subsequently becomes publicly known through no fault of the Receiving Party; (b) discovered or created by the Receiving Party before disclosure by Disclosing Party: (c) learned by the Receiving Party through legitimate means other than from the Disclosing Party or Disclosing Party's representatives; or (d) is disclosed by Receiving Party with Disclosing Party's prior written approval.

Ans:  Confidential  Information:  The Receiving Party agrees not to disclose, copy, clone, or modify any confidential information related to the Disclosing Party and agrees not to use any such information without obtaining consent. - "Confidential information" refers to any data and/or information that is related to the Disclosing Party, in any form, including, but not limited to, oral or written. Such confidential information includes, but is not limited to, any information related to the business or industry of the Disclosing Party, such as discoveries, processes, techniques, programs, knowledge bases, customer lists, potential customers, business partners, affiliated partners, leads, know how, or any other services related to the Disclosing Party.

Ans:  Remedies:  1.1. Both "Parties" shall be liable for their own losses which arise out of a breach of "Confidential Information". 1.2 One Party can claim damages to the other Party for the amount of loss from breach of information.

  TYPE OF NDA. (check one) -Unilateral. This Agreement shall be considered unilateral. Therefore, the first party shall have sole ownership of the Confidential Information, with the 2nd Party being prohibited from disclosing confidential and proprietary information that is or has been released by the 1st Party. -Mutual. This Agreement shall be considered mutual. Therefore, both Parties shall be prohibited from disclosing confidential and proprietary information that is or has been shared between one another.

Client Briefing- 16:  RELATIONSHIP. The first party's relationship to second party will be described as disclosing party ( first party) and receiving party(second party) and second  party's relationship to first party will also be described as disclosing party( first party)  and receiving party( Second Party).

  SIGNATURE AND DATE:  The Parties hereby agree to the terms and conditions set forth in this Agreement and such is demonstrated throughout their signatures below: DISCLOSING PARTY             RECEIVING PARTY

GOVERNING LAW This non disclosure agreement Agreement shall be governed and construed in accordance with the laws of by Indian Contract  Act, 1872 and according to it non disclosure agreement is legally binding contract. 

  OWNERSHIP: This Agreement is not transferable and may only be transferred by a written consent provided by both Parties.

Ans:  Return of confidential information: The Receiving Party agrees to return all the confidential information to the Disclosing Party upon the termination of this Agreement.

Non Disclosure Agreement- 10 Obligations: Both "Parties" can share this "Confidential Information" received between them under this "NDA" and not to any other person outside the NDA.  1.1. Both "Parties" shall not at their discretion disclose any information specified under this "NDA" to any third party directly or indirectly. 1.2. In case of any accidental disclosure, "parties" shall not immediately make the information public so that others can be deprived of this information. 1.3. In any case, if it is necessary to disclose the "Confidential Information" to a third party to get the work done, receiving  will require written consent from disclosing party. 1.4. If Confidential Information is in written form, the Disclosing Party shall label or stamp the materials with the word "Confidential" or some similar warning. If Confidential Information is transmitted orally, the Disclosing Party shall promptly prov...

 Confidential Information: Both "Parties" can share this "Confidential Information" received under this "NDA" with whoever they think is necessary.

Ans:  WHEREAS A. The First Party is engaged in the business of manufacturing automobiles ("Business"). B. The First Party and the Second Party are interested in doing business together.  C. The Parties acknowledge that during the course of discussions between them, the First Party shall become privy to certain Confidential Information (defined hereinafter) relating to the Second Party and the First Party has agreed to be bound by the non disclosure provisions of this Agreement to govern the use and disclosure of the Confidential Information.

Disclosing party and enclosing party have indicated an interest in exploring a potential business relationship relating to manufacturing of automobiles. 

Ans: This Non-Disclosure and Confidentiality Agreement (this "Agreement") is entered into as of 15/08/ 2023 (the "Effective Date") by and between: Disclosing Party:  Ryan Automobiles Private Ltd., having its principal place of business at Pune (hereinafter referred to as the "First Party," which expression shall, unless repugnant to the context or meaning thereof, be deemed to mean and include its successors and permitted assigns) of the First Part; And Receiving Party: Fimetal Bearings Private Ltd, a company incorporated under the Companies Act (hereinafter referred to as "Second Party", which expression shall, unless repugnant to the context or meaning thereof, be deemed to mean and include its successors and permitted assigns) of the Second Part;

  WHEREAS A. The First Party is engaged in the business of manufacturing automobiles ("Business") . B. The First Party and the Second Party are interested in doing business together. C. The Parties acknowledge that during the course of discussions between them, the First Party shall become privy to certain Confidential Information (defined hereinafter) relating to the Second Party and the First Party has agreed to be bound by the non disclosure provisions of this Agreement to govern the use and disclosure of the Confidential Information and  the second party shall also become privy to certain Confidential Information (defined hereinafter) relating to the first party and the Second Party has agreed to be bound by the non disclosure provisions of this Agreement to govern the use and disclosure of the Confidential Information.

Ans: Ryan Automobiles Private Ltd ("RAL") is a manufacturing company of automobiles based in Pune, Maharashtra. Fimetal Bearings Private Ltd ("Fimetal") is a manufacturing company of bearings in Bengaluru, Karnataka. RAL is willing to buy bearings from Fimetal as per their specifications and designs. Fimetal has also agreed to manufacture and supply bearings to RAL as per their specification and design. In order to enter into a contract, it is necessary that both parties exchange their confidential information to each other. Therefore, both the parties have decided to enter into a non disclosure agreement in order to maintain their confidential information. Exercise 1: Vetting of clauses of a Non-Disclosure Agreement (10 MARKS) 1. Please correct the following Recital clause. This Agreement ("Agreement") is made by and between on 15/08/2023:  1) Ryan Automobiles Private Ltd, having its principal place of business at Pune (hereinafter referred to as the ...

Ans:  The non disclosure agreement comprises of :  1. The parties  2. Type of Agreement i.e., unilateral or Bilateral  3. Definition of Confidentiality  4. Exclusions 

Ans The non disclosure agreement comprises of the following headings.   1. Between the parties  2. Type of Agreement  3. Definition of Confidentiality  4. Exclusions 

Ans: Section 22 of Indian Contract Act mentions about the mistake of fact.  Contract caused by mistake of one party as to matter of fact.—A contract is not voidable merely because it was caused by one of the parties to it being under a mistake as to a matter of fact. Then there is the other type of mistake, a mistake of fact. This happens when both the parties miscomprehend each other leaving them at a crossroads. Such a mistake can be because of an error in understanding, or ignorance or omission etc. Here a mistake is never intentional but it is an innocent overlooking. These mistakes can either be unilateral or bilateral. Bilateral Mistake:  When both parties of a contract have committed  a mistake of fact which is crucial to the agreement, such a mistake is what we call a bilateral mistake. Here both the parties have not consented to the same thing in the same sense, which is the definition of consent. Since there is an absence of consent altogether the agreement is...

Ans: Section 22 of Indian Contract Act mentions about the mistake of fact.  Then there is the other type of mistake, a mistake of fact. This happens when both the parties miscomprehend each other leaving them at a crossroads. Such a mistake can be because of an error in understanding, or ignorance or omission etc. Here a mistake is never intentional but it is an innocent overlooking. These mistakes can either be unilateral or bilateral.

Ans :  Effect of mistakes as to law —A contract is not voidable because it was caused by a mistake as to any law in force in India; but a mistake as to a law not in force in India and has the same effect as a mistake of fact.    Illustration:  Shyam entered into an agreement of non disclosure agreement with Ram having the belief that he would disclose the confidential clause of non disclosure agreement later and would give the payment for the disclosure and Shyam thought that it was lawful , so due to mistake of law by Shyam, the agreement will not be void and the Shyam will be bound to maintain the confidentiality clause of the agreement.   However, ignorance of a foreign law is not given a similar treatment. Ignorance of the foreign law is rendered some leeway, the parties are not expected to know foreign legal provisions as well as their meaning. So a mistake of foreign law is in fact treated as a mistake of fact under the Indian Contract Act.

Ans: According to section  20 of Indian Contract Act,  1872, an agreement is void where both parties are under mistake as to matter of fact.—Where both the parties to an agreement are under a mistake as to a matter of fact essential to the agreement, the agreement is void. Explanation.—An erroneous opinion as to the value of the thing which forms the subject-matter of the agreement, is not to be deemed a mistake as to a matter of fact. Illustrations of Section 20 of Indian Contract Act, 1872:  If Ram proposes Shyam to start the business of car manufacturing with compliance of non disclosure clause of car design, it is a proposal.  If Shyam accepts the proposal of Ram, it is acceptance which is also a promise and if shyam promises  to do or not to do something ,it is a consideration.   So, if both Ram and Shyam forms consideration for each other with the confidentiality clause in the agreement, it is a non disclosure agreement.  But , suppose...

  Ans: According to section  20 of Indian Contract Act,  1872, an agreement is void where both parties are under mistake as to matter of fact.—Where both the parties to an agreement are under a mistake as to a matter of fact essential to the agreement, the agreement is void. Explanation.—An erroneous opinion as to the value of the thing which forms the subject-matter of the agreement, is not to be deemed a mistake as to a matter of fact. Illustrations of Section 20 of Indian Contract Act, 1872:  (a) A agrees to sell to B a specific cargo of goods supposed to be on its way from England to Bombay. It turns out that, before the day of the bargain the ship conveying the cargo had been cast away and the goods lost. Neither party was aware of these facts. The agreement is void. (a) A agrees to sell to B a specific cargo of goods supposed to be on its way from England to Bombay. It turns out that, before the day of the bargain the ship conveying the cargo had been cast away...

Ans: NDAs are commonly used in the following scenarios: When employers are looking to prevent their employees from defecting and selling their confidential information to their rivals or opponents.  When parties are considering entering into a licensing discussion or agreement with each other.  Distribution negotiations as well as between start-ups and companies who wish to gauge the potential possibility of future commercial joint ventures. When talking to potential investors; and During mergers and acquisitions

Ans:  The essentials for a well-drafted contract are as follows:  Specifying the parties– The consideration as well as timing of services and it is mandatory for a contract to specify the names of the contracting parties, irrespective of them being an individual or business entity. The consideration involved in the transaction and the time of the transactions would also be clearly stated.  Defining the services to be performed – The scope of work for which the parties enter into an agreement must be defined. The obligations and duties of each party should be specified.  Completion of contract – The purpose of a contract is over once each party performs their part of the agreement. Thus, it becomes significant to define the timing of all transactions or services involved. The contract should include a clause that defines its period and a provision for termination once the purpose is served. Provisions for resolving disputes – It is fairly common for grievances to aris...

Ans: Notarization:  Notarizing a document adds an extra layer of security to contracts as well as other documents by requiring a witness i.e a notarized licensed public officer to verify the identity of the signer . This witness attests that the signer is not signing under duress and that they are aware of the contents of the document they are signing.

Ans: Since each NDA is distinct, it will last for a different amount of time. An NDA is usually for a period of one year to ten years, although the period might be indefinite depending on the information that needs to be kept hidden. NDAs are typically time-limited, meaning that they only render protection for a specific period of time. After the period of NDA expires, the information may no longer be considered confidential as well as may be disclosed freely.

  Ans:  There are three types of non- disclosure agreement:  Types of NDA (Non-Disclosure Agreement):  1. Unilateral NDA: A unilateral NDA (sometimes referred to as a one-way NDA) that includes two parties where only one party (i.e., the disclosing party) anticipates disclosing certain information to the other party (i.e., the receiving party) and would require that the information must be protected from further disclosure for some reason with a view to maintain the secrecy and confidentiality.  When two parties enter into a contract and only one party agrees to share confidential Information to another party and  also prevent others from further disclosing that Information to any other party. Under this kind of non disclosure agreement, there is only one party out of the two parties to the agreement whose information is required to be protected. The kinds of agreements which fall under this category are employer and employee , client and vendor, inven...

Ans:   Stamping and Registration of non disclosure Agreement: Ram and shyam has made an agreement of  inception of business of car manufacturing abiding the confidentiality clause of car design and Ram would like to stamp the agreement, it will be done under Indian Stamp Act, 1899 and if Ram would like to register the agreement, it will be registered under Indian Registration Act, 1908.  

Ans: Contract according to Section 2(h) of Indian Contract Act,  1872 :  According to section 2(h) of Indian Contract Act,  1872 , an agreement which is enforceable by law is a contract.   If Ram proposes Shyam to start the business of car manufacturing with compliance of non disclosure clause of car design, it is a proposal.  If Shyam accepts the proposal of Ram, it is acceptance which is also a promise and if shyam promises  to do or not to do something ,it is a consideration.   So, if both Ram and Shyam forms consideration for each other with the confidentiality clause in the agreement, it is a non disclosure agreement.  If tbe non disclosure agreement is enforceable in court of law,  it would become the non disclosure contract. 

Ans: Section 2(e) of Indian Contract Act,  1872:  According to section 2(e) of Indian Contract Act,  1872, every promise and every set of promises, forming the consideration for each other, is an agreement.  E.g., If Ram proposes Shyam to start the business of car manufacturing with compliance of non disclosure clause of car design, it is a proposal.  If Shyam accepts the proposal of Ram, it is acceptance which is also a promise and if shyam promises  to do or not to do something ,it is a consideration.   So, if both Ram and Shyam forms consideration for each other with the confidentiality clause in the agreement, it is a non disclosure agreement. 

Ans:  According to section 2(d) of Interpretation clause, when, at the desire of the promisor, the promisee or any other person has done or abstained from doing, or does or abstains from doing, or promises to do or to abstain from doing, something, such act or abstinence or promise is called a consideration for the promise.  According to section 2(d) of interpretation clause,  when a shyam gives his acceptance to start the business of car manufacturing with Ram following the compliance of non disclosure of car design, it would become the promise of Shyam to Ram. The promise to do or not to do something is the consideration.  So consideration is nothing but a promise to do something or not to do something or we can say that consideration is the acceptance of doing something or the acceptance of not doing something.  

Ans:  Section 2(c) of Indian Contract Act,  1872: According to section 2(c) of Indian Contract Act, 1872, the person making the proposal is called the promisor and the person accepting the proposal is called the promisee.   According to section 2(c) of Indian Contract act, suppose Ram proposes Shyam to incept car manufacturing business with the confidentiality clause of non disclosure of car design  and  Shyam accepts the proposal of Ram, the acceptance of Shyam is the promise of Shyam to Ram.   The Ram is the promisor here and Shyam is the promisee here

Ans:  By Varun Singhal  Section 2(b) of Indian Contract Act: Section 2(b) of Indian Contract Act mentions when the person to whom the proposal is made signifies his assent thereto, the proposal is said to be accepted. A proposal, when accepted, becomes a promise.   For instance:  According to section 2(b) of Indian Contract Act if Ram proposes shyam to open the car manufacturing business, either Shyam would accept the proposal of Ram or would reject the proposal of Ram. Suppose , Shyam accepts the proposal of Ram, it means that Shyam has made promise to Ram. Section 2(b) of Indian Contract Act mentions about the promise and only the acceptance of Shyam to start car manufacturing business with Ram abiding the non disclosure clause of confidential matter of car design is a promise of Shyam to Ram in non disclosure agreement. 

Ans:  In section 2(a) of Indian Contract Act,  1872 , the proposal is defined.  The proposal is also known as offer. The proposal or offer which has the non disclosure clause is the proposal of  non disclosure agreement . For instance: Ram proposes to shyam for commencement of car manufacturing business with a confidentiality clause of car design. Ram is an offeror or proposer here as well as Shyam is an offeree or proposee. Ram would like the assent or abstinence of his proposal. So, if Ram proposes shyam to set out the business of car manufacturing with the confidentiality clause of car design, it becomes a proposal which is defined under section 2(a) of Indian Contract act and the proposer i.e., Ram would expect the assent or abstinence of his proposal from shyam who is proposee here. But due to the confidentiality clause in this proposal, it would become the proposal of non disclosure agreement.  

Ans:   By Varun Singhal  There must be atleast two persons for a valid contract. Two or more parties are required for a valid contract.   In non disclosure agreement also, there must be atleast two persons required to make a contract of non disclosure agreement.  

Ans:  By Varun Singhal  Essentials are the ingredients in contract drafting.  All the ingredients that are contained by contract are the essentials of contract drafting.  

Ans:  By Varun Singhal  Contract is a legally binding agreement. Contract drafting is the process of drafting legally binding agreement.  A Non-Disclosure Agreement (NDA) is also a binding contract between two parties that creates a confidential relationship. The first step in contract drafting is to identify the parties to the agreement as well as their respective roles.  The contract drafting must include the right and duties which are also the terms that the parties to the contract have in relation to one another.