Does a non-disclosure agreement need to be notarized? Like everything in this mighty world, this question also has two sides to it. I will try and explain what happens when you choose to get your NDA notarized and what happens when you don’t.
Before that let’s cover some preliminary points of importance. There are some questions that you should ask the drafting party before you decide to sign an NDA. Will the notary be present when you sign ? If you are signing the document digitally, then how is your e-signature protected?
Signing an NDA
What happens when you sign the NDA in person versus when you sign it via e-signature?
Signing an NDA in person
When signing an NDA in person, you should know that your signature requires in-person witnesses, such as a notary. The NDA should highlight this. Due to the unforeseen COVID-19 pandemic, in person signatures have become uncommon if not rare. People are moving towards electronic signatures.
Signing an NDA with an electronic signature
The advancement in tech has allowed us to sign all our documents online, and e-signatures are as valid as in-person signatures in today’s times. An electronic signature is very secure — another benefit of going digital. All the involved parties get digital copies as soon as the documents are signed, making it super easy to find the NDA when you need it.
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Getting an NDA Notarized
Usually, parties may choose to get the non-disclosure agreement notarized. A notary’s function is that of a witness; a notarization signifies that the notary has personally witnessed the parties putting their signature to the contract. In the absence of a witness, a party could invent many excuses to argue that he is not bound by the terms of the contract.
For example, he could argue that he never signed the contract, or that the signature is not his, or that his signature is forged by someone else. While in India, there is no legal requirement to use a notary for agreements, a notarization will be helpful in preventing parties from denying execution (signing) of the contract by themselves.
Is Getting an NDA Notarized Legally Mandated?
No, getting an NDA notarized is not legally mandated in India. A notary just proves that the parties signed the NDA, they do not scrutinize or review the contract.
Here are some points of interest surrounding notarization.
- Notarization is not legally necessary in India.
- A notary doesn’t scrutinize or review the NDA they’re notarizing. They have no power to enforce the contract on any of the signatory parties.
- A notary does not offer any advice to the parties. (We advise you to read any contract very carefully before signing it)
- A notarized document does not mean that the signatory parties understand the terms of the NDA.
- Some would argue that a notarization actually complicates the entire process and makes it cumbersome.
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Stamping and Registration
Whenever we sign an NDA, we sign it while being mindful that the document has value and can be enforced in a court of law. In order to enforce the NDA, it has to be presented in the court to prove that it was signed between two (or more) parties. So, for the purpose of presenting the NDA before the court, there are certain formalities involved.
A stamp duty is a necessary procedural formatting for the NDA to be admissible in the court of law. The rate for stamp duty on a non-disclosure agreement will vary from state to state, but it should generally range from Rs. 20 to Rs. 100 in most Indian states.
A non-disclosure agreement can be registered as per the Registration Act, 1908 by approaching the Office of the Sub-Registrar of a district or city. The charges for getting an NDA registered varies from state to state. Registration helps a long way in proving the authenticity of the contents of a particular document, but this too like notarization is not legally necessary. Registering an NDA can become extremely frustrating due to different state laws and slow processing by the local government body.
So, does a non-disclosure agreement need to be notarized? In conclusion, notarizing a non-disclosure agreement is not legally mandatory in India and you can choose not to get the NDA notarized. It is perfectly fine. A notary, as a witness, just proves that the signatory parties were of sane mind when they signed the document, and that’s it. A notary cannot enforce the NDA, only a court of law can.
If you want to generate an NDA, then eSahayak can help you, just click on the generate now button below.
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Note: This blog should not be construed as legal advice of any sort. To know more about the legal aspects, you can book a legal consultation at eSahayak by clicking here.