The NDA and its legal anchors
A confidentiality agreement — an NDA — is a familiar form of Anglo-American law, though the Civil Code of Georgia does not list a contract of that name among the nominate contracts. That does not make it inadmissible: the Code's norm on freedom of contract lets the parties conclude a contract of such content, and the duty of secrecy exists directly by law. This page explains these three anchors under Articles 319, 418 and 714 of the Code.
Freedom of contract
Under the first part of Article 319, subjects of private law may, within the bounds of the law, freely conclude contracts and determine their content. They may also conclude contracts that are not provided for by the law but do not contradict it. Where the validity of a contract depends, for the protection of essential interests of society or a person, on a state permit, this must be regulated by a separate law. It is on this norm that a confidentiality agreement stands: the parties themselves determine what information counts as secret, to whom it may be transferred, and for what term the obligation extends.
The same article draws boundaries: a party occupying a dominant position on the market bears the obligation to conclude contracts and may not groundlessly offer unequal terms, while the third part protects those acquiring property for non-commercial purposes or subsistence needs — they may not be refused conclusion of a contract without justification.
The duty of secrecy
Article 714 creates the legal core of confidentiality: the fiduciary must not disclose facts known to him in the framework of his activity where the principal is lawfully interested in keeping them secret, unless a duty of disclosure exists on the basis of law or the principal permits disclosure. It follows that the duty of secrecy does not arise where the law itself requires disclosure — a requirement that an agreement cannot displace. This duty operates even without a contract — an NDA refines and reinforces it.
The second part is particularly important: the duty not to disclose the facts exists after the contractual relationship has ended as well — an employee or partner is not released from it by the termination of the relationship.
Within the bounds of freedom of contract, the content of an NDA follows the parties' needs: it may define which information falls under the regime, who counts as an impermissible recipient, for how long the agreement operates, and what happens to the received materials upon the end of the relationship. Such clauses are lawful where they do not contradict the boundaries of Article 319 — the law and the remaining public interests; and the more precise the definition, the easier it is to establish a breach and enforce the sanction.
Penalty and form
Article 418 regulates the sanction side of the contract: the parties may freely determine a penalty which may exceed the possible damage, except in the cases provided for by the Code. This means that a penalty stipulated in an NDA for disclosure is lawful, and its amount rests on the parties' agreement.
The form requirement is precise: an agreement on a penalty requires written form. Even without a penalty, the remaining demands — compensation of damage and the duty of secrecy — remain in force, but written form is indispensable when a sanction is established.
One further practical note: under Article 714 the duty of secrecy extends to facts that became known to the fiduciary in the framework of his activity — a criterion that works at the level of the law alongside any information recorded in the NDA. The NDA is therefore not a mere formality: it creates a written record which also proves what became known, and to whom.
Frequently Asked Questions
Below we answer the key questions about NDAs.
Is an NDA admissible in Georgian law?
Yes — under the freedom-of-contract norm, since it does not contradict the law; its content is determined by the parties.
Does secrecy exist without an NDA?
Yes — under Article 714 the fiduciary's duty arises directly from the law; the NDA reinforces it.
May a penalty exceed the damage?
Yes — the parties may freely determine the penalty, except in the cases provided for by the Code.
What form does a penalty agreement require?
Written form — an oral agreement on a sanction does not satisfy the requirement, while the duty of secrecy operates without any written form.
What should an NDA contain?
The definition of secret information, the circle of permitted access, the term and the consequences of breach — within freedom of contract.
How We Help on Legal.ge
The Legal.ge team identifies disclosure risks, orders the categories of information and prepares penalty terms so that the sanction is enforceable and proportionate.
If you need an NDA or confidential information has been disclosed, write to us on Legal.ge — we will draft the agreement and assess the routes of liability.