As per the Indian law, confidentiality clause or non disclosure clause in a
contract bounds two or more parties or all the involved parties to ensure and
agree that specific type of information that is furnished by one party or all
the parties will remain confidential. Such clause is included in a contract in
case a company or an individual is equipped with a secret
Key contents in confidentiality clause:The confidentiality clause must contain the following essentials
- Mention the names of parties involved in the agreement
- Definition of confidentiality in context to the agreement
- The tenure of non-disclosure
- Exclusions that are not a part of confidentiality
- Provisions imposing restrictions upon transfer of data
- Terms and condition pertaining to confidentiality
- Type of non-disclosure or confidentiality clause
- Mention of law and jurisdiction specific to country; in case both the
parties are from different countries
Breach of confidentiality clause:
The confidentiality clause is termed as breach in case either one or both the
parties have not maintained the level of privacy and have disclosed it further.
In such a case, it is essential to seek legal assistance from corporate lawyer
or legal consultant.
Considered as an offence and crime, the law has drafted redressal mechanisms in
case of breach of confidentiality clause. The non-breaching party needs to
compensate the loss of other party in the form of monetary compensation. In case
of employment, the company can fire the employee or immediately order to return
company property in case it is bestowed to them.
Importance of confidentiality clause:
Confidentiality clause plays a vital role when an individual or a company enters
into an agreement with other party/parties. It stands out to be an integral
element particularly in reseller agreements, license, technology, employment
contracts, etc. The key objective behind including this clause is to ascertain
that both the parties involved in the agreement will maintain secrecy and high
levels of confidentiality.