Organisations frequently conflate Non-Disclosure Agreements, Memorandums of Understanding, and Data Sharing Agreements. Under DPDPA, only DSAs adequately address personal data handling requirements. This article distinguishes these instruments and explains why DSAs are mandatory for DPDPA compliance.
Non-Disclosure Agreements
NDAs protect confidential information and ensure secrecy. They establish obligations not to disclose information to third parties. However, NDAs do not address how personal data is processed, stored, or deleted. An NDA prevents disclosure but does not ensure DPDPA-compliant handling of personal data within the receiving organisation.
Key Points
- Protects confidentiality
- Prevents disclosure
- Does not address processing
- Insufficient for DPDPA
Memorandums of Understanding
MOUs outline intentions for partnership and collaboration. They establish general frameworks for cooperation but rarely include enforceable terms for specific activities. MOUs typically lack the detailed provisions regarding data handling, security measures, and compliance obligations required under DPDPA.
Data Sharing Agreements
DSAs specifically address how personal data is used, stored, protected, and deleted. Required provisions include: purpose limitation, processing restrictions, security measures, breach notification, audit rights, sub-processor controls, and data return or destruction upon termination. DSAs translate DPDPA obligations into contractual commitments.
Key Points
- Purpose limitation clauses
- Security measure specifications
- Breach notification obligations
- Audit and inspection rights
DPDPA Mandate
Section 8(2) requires Data Fiduciaries to engage Data Processors under valid contracts. When personal data is shared with any third party—whether vendor, partner, or group company—a DSA containing DPDPA-compliant provisions is mandatory. Reliance on existing NDAs or MOUs exposes organisations to enforcement risk.
Key Takeaways
Audit existing agreements for DSA requirements
Develop standard DSA template with DPDPA clauses
Supplement NDAs with DSAs where personal data is shared
Convert MOUs to binding DSAs for data partnerships
Establish contract review process for data sharing