Non Use Agreement Template for Malaysia

A Non Use Agreement is a specialized legal contract that restricts how recipients can use your confidential information. Unlike non-disclosure agreements that focus on preventing sharing, this document specifically controls the purposes for which your proprietary information can be utilized. Under Malaysian law, these agreements provide crucial protection for businesses that need to share sensitive data while maintaining control over its application.

When do you need this document?

You need a Non Use Agreement when sharing proprietary information where disclosure is necessary but specific uses must be prohibited. This is essential during technology licensing discussions where you want to prevent reverse engineering, business partnerships where financial data is shared but competitive analysis is forbidden, or research collaborations where methodologies are disclosed but independent development is restricted. The agreement is particularly valuable when working with technology providers who need access to your systems but must be prevented from using insights for other clients, or when engaging auditors who require comprehensive access but cannot use findings for benchmarking purposes.

Key legal considerations

The scope of protected information must be clearly defined to ensure enforceability under the Trade Secrets Act 2021. Your agreement should specify exactly what constitutes prohibited uses, as Malaysian courts require precise language to grant injunctive relief. Include security measures that recipients must implement to protect your information, as this demonstrates your commitment to maintaining confidentiality. Consider reciprocal obligations if both parties are sharing sensitive information, and ensure the agreement includes provisions for return or destruction of information upon termination. Remedies clauses are crucial, as the Specific Relief Act 1950 allows for injunctions and specific performance in breach cases, but only if your agreement clearly establishes the irreparable nature of potential harm.

Legal requirements in Malaysia

Under the Contracts Act 1950, your Non Use Agreement must contain essential elements including clear consideration, lawful purpose, and competent parties. The agreement must comply with the Competition Act 2010 by avoiding anti-competitive clauses that could restrict legitimate business activities. If executing electronically, ensure compliance with the Electronic Commerce Act 2006 requirements for digital signatures and authentication. Malaysian law requires that prohibited uses be specifically enumerated rather than broadly defined, and the agreement should establish clear burden of proof standards as outlined in the Evidence Act 1950. Include governing law clauses specifying Malaysian jurisdiction and ensure all parties understand their obligations under the Trade Secrets Act 2021, which provides enhanced protection for confidential business information but requires proper contractual foundations.