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Home › Business contracts › Non-disclosure agreement (NDA)

Learn more about Non-disclosure agreement (NDA) in Indonesia

In Indonesia, a Non-Disclosure Agreement (NDA) is a vital legal tool for safeguarding a company’s sensitive information. It legally binds parties to confidentiality, ensuring that private data remains secure. Establishing an NDA with partners, suppliers, or service providers is crucial when they engage with your business. Themis Partner’s Non-Disclosure Agreement form helps you to effectively protect your organisation against the disclosure of information or data to third parties without your consent. You can also download our Employee Confidentiality Agreement which is specifically designed to protect you against disclosure by your employees.

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Table of contents

  1. What is a Non-Disclosure Agreement (NDA) in Indonesia?
  2. What is the role of a Non-Disclosure Agreement?
  3. What is included in the NDA under Incodnesian law?
  4. What are the different types of Non-Disclosure Agreement?
  5. When to use a Non-Disclosure Agreement?
  6. What is "Confidential Information" in Indonesia?
  7. What happens in case of breach?

What is a Non-Disclosure Agreement (NDA) in Indonesia?

A Non-Disclosure Agreement is frequently used in business to maintain the confidentiality of private information supplied to another party or communicated during the course of business. Non-Disclosure Agreements are frequently referred to as “Confidentiality Agreements” or simply “NDAs.” A secrecy agreement is occasionally a confidentiality clause inserted in another contract, such as an employment contract or a service agreement.

What is the role of a Non-Disclosure Agreement?

A Non-Disclosure Agreement serves two functions: secrecy and protection. A confidentiality agreement might safeguard information ranging from product specifications to client rosters. A NDA establishes the legal basis for preventing ideas and information from being stolen or disclosed to rivals or third parties. An NDA serves three fundamental purposes:

➤ Identifying protected information: NDAs categorize information by creating a line between what is secret and what can be revealed. This permits the parties to work freely within the confines of the confidentiality agreement.
➤ Safeguarding sensitive data: Signing an NDA establishes a legal commitment to keep sensitive material private. Any disclosure of the information is a breach of contract.
➤ Protecting patent rights: Because public revelation of a pending innovation can often terminate patent rights, an NDA can shield an inventor as they develop their new product or concept.

What is included in the NDA in Indonesia?

The NDA has numerous common components, including the following:

➤ Parties to the Agreement, a detailed description of the parties. In Indonesia, under a bilateral or reciprocal NDA, the parties are referred to as "the disclosing party" and "the receiving party."
➤ Definition of "Confidential Information", which includes any data or information that is commercially valuable and not generally known to the public, as per Indonesian law.
➤ Private Information Obligations, outlining the confidentiality obligations, the duration of confidentiality, and the conditions under which the information can be used or disclosed by the receiving party.
➤ The agreement's effective date and duration, which should be clearly stated to ensure legal enforceability in Indonesia.
➤ Procedures for the return or deletion of confidential data upon the agreement's termination, in compliance with Indonesian legal requirements.

What are the different types of Non-Disclosure Agreement?

Non-Disclosure Agreements can be unilateral or bilateral:

➤ A Unilateral agreement: is a one-sided agreement in which only one party gives sensitive information and the other party is required to keep it secret and not disclose it to others.
➤ A Bilateral agreement: requires both parties to share secret information in order to preserve and secure the information from other parties.

When to use a Non-Disclosure Agreement?

The following are some examples of when you would wish to employ a Non-Disclosure Agreement:

➤ When employing the services of another company or a person when such firm or individual will be given access to sensitive or private information of your organization
➤ When workers are given access to the company's confidential information while on the job
➤ While pitching a business proposal to a venture capitalist, possible partner, or investor
➤ While sharing financial, legal, and other company facts with a potential acquirer of your firm

What is "Confidential Information" in Indonesia?

In Indonesia, “Confidential Information” refers to any information that has commercial value due to its secrecy and is not generally known by the public. This includes, but is not limited to, production methods, processing methods, sales methods, and other information in the fields of technology or business. The Law of the Republic of Indonesia Number 30 of 2000 concerning Trade Secrets specifically addresses the protection of such information. It is crucial for businesses to define confidential information clearly in their Non-Disclosure Agreements (NDAs) to ensure legal protection against unauthorized disclosure or use.

What happens in case of breach?

In the event of a breach of a Non-Disclosure Agreement (NDA) in Indonesia, the party who has violated the agreement may face legal consequences. The specific repercussions depend on the terms outlined in the NDA itself. Generally, the aggrieved party can initiate legal action against the violator, seeking remedies such as injunctions to prevent further disclosures and monetary damages for any losses incurred. The Indonesian legal system may enforce these penalties to uphold the confidentiality obligations agreed upon by the parties involved.

  • Remarks:

In addition to any other legal or equitable remedies available to the Disclosing Party, the Disclosing Party will often seek injunctive or other equitable action against the Receiving Party to prevent any subsequent or ongoing breach of the Receiving Party’s duties.

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