With an NDA, each party retains intellectual property (IP) and rights to its own confidential information. This type of agreement does not offer a license or other rights to the other party`s confidential information. My previous blog post was triggered by an issue with the confidentiality agreement – what is the best way to protect the disclosing party from losses caused by unauthorized disclosure by representatives of the recipient? I had pretty much opted for the fix, but among those I consulted, it turned out to be an unpopular choice, to an extent that surprised me. The concept of compensation has been somewhat tainted with baggage; Let`s take a closer look. It can still be difficult to turn around on the other side to use your organization`s model (although you`re trying anyway), so a good solution may be to come up with a neutral third-party model. For example, a standard confidentiality agreement published by a law firm, the NDA of a traditional document automation provider or by a service like Haggle. The exemption from confidentiality agreements is a clause of this type of contract that applies to claims of third parties.3 min read There are a number of potential benefits to being compensated as subject to advertising, for example. B may not be necessary to reduce loss and claim delays. However, the absence of compensation does not limit a depositor`s ability to claim damages (although with the need to reduce a loss) or to pursue other remedies, such as claims for omission. This is of course provided that the NDA is properly formulated! The agreement of this type of clause is, at the best of times, an act of legal tightrope. In the common law tradition, it is illegal to agree on a “penalty” in a contract (i.e., “if you break that contract, you pay me $10 million, no matter what”). A penalty is not enforceable – and should not be included in any contract.
Courts have a complex process for assessing the damages a party must pay for breach of contract. This is closely linked to the actual losses caused by the infringement and not to arbitrary amounts intended to punish non-compliance. The exception is that it is possible to agree on “lump sum damages”, provided that this is a true forecast of the losses that a party will actually suffer in the event of an infringement. Unauthorized disclosure or use by representatives. Where the public party becomes liable for losses resulting from the disclosure or use of confidential information by one or more representatives of the recipient that are not authorized by this Agreement, such disclosure or use shall be deemed to be made by the recipient to determine whether the recipient has breached any of its obligations under this Agreement. If you discover an unusual or inappropriate clause like the one above, you can use it as a good reason to suggest launching a completely different template. In other words, you only want to accept a standard NDA that deals with confidentiality and not the unusual or inappropriate obligation. It`s much quicker and easier to start from another model than to get your lawyer to design custom modifications that the other party`s lawyer then needs to check out (and probably find a problem with that).
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