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Agreement & Contract

How to Draft an NDA: Step-by-Step Guide

A Non-Disclosure Agreement (NDA) is one of the first contracts that must be signed when parties begin a business partnership with one another to avoid the disclosure of any sensitive, secret, or private information communicated to a party who was not involved in those discussions. An NDA is necessary to avoid misunderstandings, conclusions, interpretations, and misuse of such confidential material. An NDA agreement grants the parties the legal right to keep their company's sensitive information private. It forbids the party(s) receiving the information from misusing the sensitive information given, and in the event of a violation, the parties will experience legal ramifications. NDAs can be unilateral and bilateral. It can be between more than two parties as well.

By agreeing to an NDA, the party receiving confidential information promises to use it only as authorized and to keep it secret from third parties. In case the receiving party violates the terms, there is usually a course of action to take. NDAs frequently provide remedies for a breach of contract. As a result, this contract serves as a powerful deterrent due to the possibility of legal action on the side of one party in the event that the other party breaches the agreement.

Parties in NDA

In an NDA, there are two parties: the Disclosing Party, who discloses sensitive or secret information, and the Receiving Party, who receives the sensitive information.

Difference between NDA and Confidentiality Agreement

Even after signing an NDA, the disclosing party will fail to protect its private information. Signing an NDA is not sufficient on its own. Due to the lower level of secrecy required, an NDA differs from a confidentiality agreement. Unlike a confidentiality agreement, which requires parties to take proactive measures to prevent information leaks, an NDA prohibits parties from disclosing personal or private information. Second, whereas NDAs are employed in cases involving third parties or new businesses, confidentiality agreements are more frequently used in employment or personal circumstances. Finally, NDAs are used when there is a unilateral requirement to keep information private, whereas Confidentiality Agreements are used when there is a bilateral or multilateral disclosure of private information.

Benefits of an NDA

Confidential information is protected by non-disclosure agreements.
An NDA enables the creator of a new concept or service to retain ownership while protecting it.
Such secret agreements clearly state sensitive information and should not be disclosed.
All parties can protect their trade secrets when a business partnership is created.
The data is safeguarded for patent registration when a company receives funding.

How to draft an NDA

The company may be held accountable if the company's NDA is unclear or incomplete. The NDA must specify which parties have access to confidential information and set forth the terms and conditions of the contract to protect both the party providing the confidential information and the party receiving it.

Step 1: Define the scope/purpose of NDA. For what purpose is this NDA drafted? What data is considered strictly confidential? A catch-all clause is frequently included in NDAs to ensure that any information that a "reasonable person" would consider should be kept confidential is maintained that way.

Following the typical recital clauses, the definition clause is one of the first clauses in the NDA. In addition to other things, it needs to say who is receiving and sharing the information and what is considered confidential. The definition of Confidential Information may be more detailed depending on the details of the parties' agreement.

Step 2: Outline the obligations of each party. What should be done to protect the privacy of the party receiving the information? How do they plan to avoid unauthorized access?

Step 3: Jot down a list of possible exclusions. When should a party reveal a party's sensitive information? The employment of subcontractors and legal proceedings are two instances where disclosure may be necessary.

This clause may have additional conditions depending on the nature of the agreement and the information disclosed. When NDAs are signed alongside employment agreements, employers may ask employees to agree to a non-solicitation and non-compete clause.

Step 4: Decide a duration that is the term of the agreement. Although the receiving parties typically demand a time limit, the revealing parties may wish the arrangement to last indefinitely. There should be no question regarding the length of confidentiality; both parties' interests must be considered while setting the term. Post-termination obligations and the return of confidential information should also be a part of the NDA.

Step 5: Describe the consequences. Will a violation result in the severance of a business relationship or employment? Can the non-breaching party file a lawsuit for damages or even an injunction? Clauses regarding equitable remedies should be mentioned.

Step 6: Include the boilerplate clauses such as Governing law & jurisdiction, notices, severability, assignment, waiver, indemnity, amendment,

The way NDAs are created, assessed, and negotiated has been fundamentally altered by artificial intelligence (AI), and the technology is surprisingly easy to use. Elements of these agreements could not previously be "written" using cutting-edge legal technology. An AI-powered contract negotiation tool can now produce reviewed entirely and negotiated contracts using the most modern methodologies created by legal experts and artificial intelligence linguistic researchers.

Conclusion

The essential provisions of an NDA can occasionally be included in contracts as a confidentiality clause in place of an NDA. This confidentiality clause is added to the boilerplate or list of provisions that are present in every contract. NDAs are also used in a wide range of industrial settings. They can be a part of employee contracts, settlement agreements between parties to a legal dispute, contracts relating to intellectual property, etc. They are not just utilized when businesses deal with one another. NDAs are hence crucial to any transaction.

Consumer Protection

What is the Food Adulteration Act?

A. Food Adulteration and the FSSAI Act in India: A Comprehensive Overview

In the vast culinary landscape of India, where food isn't just sustenance but an integral part of its cultural fabric, the safety and purity of what we consume cannot be overlooked. However, food adulteration, the act of degrading food quality by adding inferior or toxic substances, has been a persistent concern. Thankfully, the Food Safety and Standards Authority of India (FSSAI) Act, established in 2006, serves as a beacon of hope, ensuring that the food reaching our plates is both safe and wholesome.

B. The Menace of Food Adulteration

Food adulteration is a malpractice where the quality of food is compromised either by adding substances that should not be present or by removing valuable ingredients. From mixing stone chips in rice, water in milk, to using harmful colorants in sweets, the methods of adulteration are plenty. Such practices not only cheat consumers but can also lead to severe health issues, sometimes even proving fatal.

C. Enter Food Safety and Standards Authority of India: The Guardian of Food Quality in India

Recognizing the dire need for a comprehensive regulation, the Indian government introduced the FSSAI Act. Under the aegis of the Ministry of Health & Family Welfare, FSSAI serves as a singular reference point for all matters related to food safety and regulations in India.

D. Key Provisions of the FSSAI Act:

1. Licensing & Regulation: FSSAI is responsible for issuing licenses to food business operators (FBOs). Any FBO, be it a manufacturer, transporter, or distributor, has to adhere to the guidelines set by FSSAI.

2. Setting Standards: The body establishes science-based standards for food products, ensuring they're safe for consumption.

3. Monitoring & Surveillance: Regular surveillance, monitoring, and inspections of food products are carried out to ensure compliance with the set standards.

4. Consumer Awareness: FSSAI also plays a pivotal role in creating awareness about food safety, quality, and nutrition among consumers.

E. The Impact of FSSAI

Since its inception, FSSAI has brought about a significant change in the Indian food industry. There's a noticeable shift towards quality and safety. FBOs are now more aware of their responsibilities, and there's a marked reduction in malpractices related to food adulteration.

Moreover, the introduction of the 'Eat Right Movement' by FSSAI, which promotes a holistic approach to health and sustainability through a balanced diet, indicates the body's commitment to ensuring the well-being of Indian consumers.

F. The Road Ahead

While FSSAI has been instrumental in curbing food adulteration, challenges remain. The vastness of India's food industry, coupled with regional disparities in awareness and implementation, makes it a daunting task. But with consistent efforts, increasing consumer awareness, and stringent punitive actions against defaulters, the battle against food adulteration can surely be won.

G. In Conclusion

Food adulteration, a shadow over India's culinary heritage, has been a pressing concern for decades. However, with bodies like FSSAI stepping in with robust regulations and an unwavering commitment to ensuring food safety, there's renewed hope. As consumers, staying informed and vigilant is our shared responsibility. By supporting and adhering to the standards set by FSSAI, we can not only ensure our well-being but also preserve the rich culinary legacy of India for future generations.

Any other Legal Issue

Is Wearing Mangalsutra (Or Thali) Mandatory For Hindus?

The Historical Social Importance Of Wearing Mangalsutra

Marriage is considered one of the significant samskaras (life’s rituals) for every Hindu as per the scriptural Hindu Law. A pure Hindu marriage has three sacramental attributes: (1) It is called a sacred union i.e., its purpose is to carry out religious and spiritual duties and not to satiate one’s physical & biological needs; (2) “a sacred union” here should mean that a marriage which has been accepted once cannot be undone ; (3) As for “a sacramental union” also refers to the coming together of body, mind, and the soul. So, it is coming together not just for this birth or life but for all births to come. So, husband and wife are together not just for this world but also for other worlds.

Different rituals are done during the course of an Indian marriage and each ritual has its own importance. However, the most important aspect of every Hindu marriage is the Sindoor Dana; During this ceremony, the groom puts red vermilion powder (known as Sindoor) on his bride’s hair partition. In some regions of India, this ritual is carried out by the mother of the groom. This is done as the to-be mother in-law welcomes the bride into their family. Besides there is another ceremony, which is the tying of a necklace consisting of black beads around bride’s neck by the groom. This signifies that the woman (bride) is married. Both the society and the Indian legislation tend to protect the institution of marriage. The institution of marriage is protected under the Hindu Marriage Act 1955 in India.

Also read Annulment of Marriage.

The Rise Of Women & The Gender Conflict

Indian society has been predominantly patriarchal with well-demarcated gender roles, where the role of women has been largely passive and the husbands have an active, dominant role. This malady anti-women prejudice rests upon on all of us as we all are part of this society. Change will come in only when we change our attitude towards women and see at her beyond her face, her curves, and her luscious long hair. A woman is all of them a mother, a sister, a friend, a daughter, and a teacher – so we should them from our inner core. It is shameful that still women face discrimination in various aspects of life and society in most parts of the world. In fact, the rise of women has led to domestic conflicts from time to time.

You may also read How To Apply For Divorce.

Here are a few rulings & observations by the various courts in the area of Mangalsutra:

The Ruling By The Bombay (Mumbai) High Court

The Bombay High Court quashed the divorce decree in Nitin Omprakash Agarwal v. Rekha Agarwal case. This case was an appeal against Nagpur family court which permitted the petition. The respondent was before, married to another man but was later divorced, though she kept staying with him in the interest of her two children. After sometime she met the appellant and fell in love with him. The appellant then ‘married’ her by making her wear Mangalsutra and puting Sindoor (vermilion) on her forehead in front of a Lord Krishna idol.

The court observed that as per the Section 7 of the Hindu Marriage Act,1955 some ceremonies can serve to authenticise a marriage between two Hindus.

Besides, Section 7A (of the Pondicherry State Amendment) has further laid down other ceremonies that are accepted in a Hindu marriage.

These are as under-

(a) By both the parties to the marriage declaring that each takes the other to be his wife or, as the case may be, her husband; or

(b) By both parties garlanding the other or placing a ring upon any finger of the other; or,

The Ruling By Madras (Chennai) High Court In July 2009

The legal quest of a 21-year-old woman bore fruit when Madras High Court Bench upheld the validity of her marriage. The High Court decreed it was not mandatory for the groom to put a 'mangalsutra' around the bride's neck to establish it as a marriage.

"It is not mandatory that the groom should tie mangalsutra around the bride's neck to prove a marriage. It was enough to prove solemnisation of the marriage in any established form as per the Hindu Marriage Act section 7," Justice M. M. Sundresh had stated, quashing an appeal which challenged a lower court order upholding the validity of the marriage.

The Statement By The Madras (Chennai) High Court

In an unusual development in July 2022, statement, the Madras High Court said that the removal of 'Mangalsutra' or 'thali' tantamounts to "mental cruelty of highest order". The judgement came in the case of a man seeking a divorce. While granting divorce to the aggrieved petitioner, a division bench of Justices V M Velumani and S Sounthar observed about Mangalsutra and its importance in a Hindu marriage.

In 2016 in the month of June, C Sivakumar, a medical college professor in Erode, had filed for divorce. But, the local court had denied his request. Sivakumar then sought to overturn the decision. Granting him the request, the Madras High Court ruled that removing of jewellery has its own significance. The court observed that the woman removed the mangalsutra which tantamounted to mental cruelty.

As the news of the judgement came up,, it has taken the Internet by storm. Many netizens pointed out that being married and wearing a piece of jewellery did not have real intrinsic connection.

Also read Property Rights Of A Wife After Her Husband’s Death – Is She The Legal Heir Of Husband’s Property In India?

Tax

Service Charge Revised Guidelines - July 2022 - What to do If Guidelines are Violated?

The Issue Of Service Charge

Many hotels and restaurants charge a price from the consumers, which is known as the service charge. This charge has been a factor of much debate and controversy as it has been stated that various restaurants and hotels have taken service charge but it has not been provided to the staff as it is meant to be.

You may also read Pro Bono Legal Service - Know About Free Legal Services.

The New Development

In a significant development, the Central Consumer Protection Authority (CCPA) on July 9, 2022 put up the guidelines to help stop the unfair trade practices in order to safeguard the interests of the consumers with respect to the laying of service charge in hotels and restaurants.

Major Points

Five major guidelines were issued with respect to the levy of service charge by restaurants and hotels. These guidelines say:

(i) Hotels or restaurants will not add service charge automatically or by default in their bill;

(ii) Hotels or restaurants should not collect service charge from consumers by any other name;

(iii) Hotels or restaurants should not force a consumer to pay service charge. In fact, they should clearly tell the consumer that service charge is optional and at the discretion of the consumer;

(iv) There will be no restriction on the entry or availability of services based on service collection charge that is imposed on consumers; and

(v) There will be no collection of service tax by adding it together with the food bill and laying GST on the full amount.

You may also read Tax Exemptions: Know About Incentives For Start-Ups.

What Can You Do If These Guidelines Are Violated?

The consumer can choose one out of four options at varying levels of escalation, in case they find the levy of service charge in the bill.

As per the first option, the customers can request the hotel or restaurant to remove the service charge from the bill.

Second, a complaint can be lodged by the consumer on the National Consumer Helpline (NCH), which serves as another dispute redressal mechanism around the pre-litigation level. The consumer can lodge this complaint by calling the number 1915, or on the NCH mobile app.

In the third option, the consumer can lodge a complaint at the Consumer Commission, or via the edaakhil portal, http://www.edaakhil.nic.in.

As per the fourth option, the customer can make a complaint to the Collector of the respective district in order to set up an investigation and get further proceedings carried out by the CCPA. A consumer has the option to complain directly to the CCPA by sending an e-mail to com-ccpa@nic.in.

The Reasons For CCPA Issuing The Guidelines

The CCPA took note of grievances about restaurants and hotels making service charge automatically and by default, without even asking or telling the consumers.

On June 2, a meeting was held between the Department of Consumer Affairs under the Ministry of Consumer Affairs, Food & Public Distribution and restaurant associations & consumer organisations on the laying of service charge in hotels and restaurants.

When the meeting came to a close, the department made the announcement that the Centre would soon put up a “robust framework” in order to ensure strong compliance of its 2017 guidelines, which had been there to discourage the levy of service charge. After one day, Union Minister of Consumer Affairs, Food and Public Distribution Piyush Goyal stated restaurants cannot ask consumers to pay hidden charges.

“The restaurants can increase the wages of their workers by raising rates. There is no control on that. In fact, we would welcome it if they can raise their employees’ income. They can raise the income of their employees and they are free to take any rate,” Goyal had stated at a press conference on June 3.

Also read How to Register Your Startup in India: 5 Simple Steps for Registration?

Labour & Employment

Non-Disclosure Agreement after Resignation

What is an NDA?

A non-disclosure agreement (NDA) is a written contract between two parties (people or organizations) that forbid the disclosure of confidential information divulged to them. If you sign an NDA, you agree to keep any sensitive information supplied with you confidential.

Key clauses to consider:

Properly identify the parties involved in the arrangement.
Clearly define what is and is not deemed confidential information under the agreement.
Define the reason and purpose for sharing confidential information.
Define the proper extent to which the parties can utilize the information.
Define the duration after which the confidential agreement will lapse.

Types of NDA

NDA are of three types:

Unilateral- It involves two parties, one of whom only gives data to the other and expects it to be protected from further disclosure.
Bilateral- It involves two parties, each of whom discloses data to a different party while ensuring that the information is not given to another.
Multilateral- It involves three or more parties to the agreement, with one of the parties disclosing information to other parties and requesting that the information be protected from further disclosures.

People Also Read This: Elements and Types of Non-Disclosure Agreements

How to get an NDA signed

You can sign a NDA physically or digitally. The party demanding NDA should inform why NDA is there and what confidentiality information covers. Further, he should also indicate the manner of signing the NDA. Once signed, the NDA becomes enforceable against signee.

Non-Disclosure Agreement for Employee Leaving

Confidentiality agreements sometimes specify the length of time a worker cannot work for a competitor after leaving his or her workplace. Through this, the former employee cannot use the knowledge received from the previous company to benefit a new employer or earn profits.

You can use a confidentiality agreement for situations, such as permitting an employer to sign company-specific information or authorizing the signatory to utilize company-specific information.

Confidentiality Agreement upon Termination of Employment

Non-Disclosure Agreement after Termination

In the event of termination or resignation, it is usually the case the competitors try to poach an employee from the previous employer. It is because the competitors try to squeeze out the confidential information, business practices or any other information which is advantageous to the previous employer.

To safeguard against disclosure of such information, it is better to sign an NDA after termination of employment. If the employee has signed the NDA at joining, the same can be extended post-employment. The same applies to non-disclosure agreement for resigned employee or when the employee leaving a job.

Signing Confidentiality Agreement after Employment

Signing NDA after Employment

In some instances, the employer may want to not disclose his business practices to competitors. It can also happen that confidentiality is required for a certain transaction or work. The employer has every right to ask the employee to sign an NDA in such instances. The employer can offer or not offer any consideration for signing such NDA.

How to break a non-disclosure agreement

Duration clause- The period of a good NDA will be split into two parts. First, there is a term for the NDA itself, which would be the duration of the agreement during which both parties will be contractually bound. A good agreement will include a second term that specifies how long secrecy duties will be in effect.
Termination clause- If the NDA is a mutual agreement and both parties having made disclosures that require confidentiality, both parties will most likely be bound by any confidentiality obligations for some time after the NDA is terminated, depending on the conditions of the NDA.

Reasons not to sign an NDA

Conflict of interest
Constrain on creativity
Showing lack of trust
Unneeded liability is created
Generally unenforceable

What happens if you break a non-disclosure agreement?

Breaching a non-disclosure agreement can have serious implications, and there are a few steps you can take if you discover that someone is breaking one of your agreements or misappropriating material in some way. You could, for example, initiate a lawsuit against the person who is disclosing your personal information.

In a breach of contract case, having a clearly stated contract will simplify you to be awarded damages. You may be eligible to sue for the following in addition to a breach of contract lawsuit:

Fiduciary responsibility has been breached.
Infringement on a copyright.
Theft of a company's trade secrets.

Various infringements on intellectual property rights.

Agreement & Contract

Elements and Types of Non-Disclosure Agreements

What is a Non-Disclosure Agreement?

A non-disclosure agreement (‘NDA’) is a legally enforceable contract that creates a confidential connection between two parties. The signatory party or parties agree that any sensitive information they collect will not be shared with anyone else.

NDAs are common for businesses entering into negotiations with other businesses. They allow the parties to share sensitive information without fear that it will end up in the hands of competitors.

Key Elements of Non-Disclosure Agreements:

The Elements of an NDA are:

“Confidential Information” must be defined: The definition of Confidential Information must be broad enough to encompass all types of information that falls within the topic. Under this topic, both tangible and intangible data might be included. Only information that is already in the public domain and already known to the Receiving Party can be considered secret.
Term of the Agreement: The period of the Agreement must be specified; even if the Agreement is terminated, the confidentiality obligations can be maintained in the case of sensitive information, such as trade secrets, that are critical to a company's success. In general, the tenure should last between two and five years.
Information’s Use: Some parties limit the dissemination of information to a small number of their workers or departments. In this clause, the phrase to consider is "need to know." In essence, this provision stipulates that the information provided should only be used for the purposes stated in the Agreement, and that it should only be shared with those who have a "need to know."
Exceptions to secrecy obligations: Certain exceptions to the confidentiality duties must be included in an NDA. Information given during a legal process or a judicial inquiry, as well as information disclosed by a third party who has no duty of secrecy to the disclosing party, are examples of such exceptions.
Return of information: Once the NDA's duration expires, the receiving party must return the information, together with any derivative information, and erase it from their operating systems.
Remedies in case of breach: In the event of a breach, every NDA should have a clear clause saying that the aggrieved party shall have the right to act legally in a specific defined manner. In many situations, monetary compensation is insufficient, hence clauses relating to indemnification for the offended party and the right to seek an injunction have become quite popular.
Arbitration: An arbitration clause specifies that the parties will settle their disagreements through arbitration rather than going to court.
Jurisdiction and Governing Laws: Different parties may be from different countries, and the laws of different countries differ significantly. It is important to be specific and select the set of laws that will regulate the Agreement. Along with the set of governing statutes, the parties should select the city whose courts would have jurisdiction over any conflicts between them.

Types of NDAs:

NDA can be of three types:

1. Unilateral NDA-It involves two parties, but only one of them exposes sensitive information to the other and wishes to keep it private.
2. Bilateral NDA (Mutual NDA): This type of NDA is also called as Mutual NDA. It includes two people, each of whom discloses information to the other and intends to keep that knowledge from being disseminated further.
3. Multilateral NDA-It requires three or more parties to sign the agreement, with at least one-party disclosing information to others and intending to keep it from being spread further. Instead of having two or three unilateral or bilateral NDAs, a single Multilateral NDA might be used.

Confidential Disclosure Agreement:

The terms confidentiality agreement and NDA are sometimes used interchangeably, making it difficult to distinguish between the two. Each term can be found in a variety of commercial contexts, thus complicating the matter. A confidentiality agreement is a legal document that requires one or more parties to keep confidential/classified information hidden. A non-disclosure agreement is a legal document that requires one or more parties to keep confidential/classified information secret.

A secrecy clause is typically used when proprietary business information or a trade secret is not intended to be divulged to the public domain, other parties, or market competitors. An NDA is usually more appropriate when there is only one-way communication of classified information. A confidentiality agreement, on the other hand, is better suited for collaborations, such as when two or more parties are working on a project that necessitates the exchange of sensitive information or the production of intellectual property.

Proprietary Information Agreement:

A Proprietary Information Agreement is a legally enforceable contract that states that a number of parties must not divulge sensitive supplies, data, or information to a different third party as specified in the deal.

People Also Read This: How to Break a Non-Disclosure Agreement?

Secrecy Agreement:

A secrecy agreement, is a crucial contract that safeguards a company's trade secrets. It ensures that all employees, partners, suppliers, and other contractors understand the necessity of maintaining the confidentiality of any information they come across while working for the organisation.

All four terms (Secrecy Agreement, Confidentiality Disclosure Agreement, Proprietary Information Agreement, Non-disclosure Agreement) are used interchangeably and there isn’t a significant difference between them.

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