Recognition of irreparable damage. Damage caused by breach of confidentiality in violation of contract theory is generally difficult to quantify and the loss cannot be fully measured in money damage. The damage is therefore irreparable. For these reasons, it is useful for the receiving party to recognize that a breach of the agreement would cause irreparable harm to the public party, but not decisively. These agreements may be a unilateral possibility if one party discloses confidential information (“party to disclosure”) to the other (“receiving party”) or may be reciprocal when both parties are required to disclose and keep the other`s disclosures secret, unless authorized to do so. In the employment context, confidentiality agreements are beneficial to an employer because they allow the free flow of confidential information within an organization to maximize business expenses, while prohibiting employees from using or disclosing confidential information such as client lists, strategic plans, know-how, technologies, marketing strategies and proprietary relationships outside of their remit. They work in the same way in other contexts – so that information is passed on to authorized parties without fear of being made public. Liquidated Damages Clause. Since the damage may not be quantified, the parties may consider adding a liquidation provision, setting a formula or a specified amount that would accrue to the victim in the event of a breach of contract. The amount indicated should be large enough to deter the receptive party. However, if the parties opt for a liquidation clause, they must be aware that in the event of an infringement, it is unlikely that a court will find irreparable harm justifying an injunction, since the agreed liquidation provision serves to repair irreparable damage and is an appropriate remedy.
Here is a simple clause that you can use from the agreement of the Canadian Business Cost Association: election clauses are generally applicable if the law chosen has an appropriate connection to the confidentiality agreement and as long as the public policy of the chosen jurisdiction is not contrary to the purpose of the confidentiality agreement. To prevent an NDA from being declared unenforceable because it is too broad, you can provide the context of the agreement and its terms. As with any contract, the parties may include some pre-construction provisions that are fairly standard and are generally included in each contract. The boiler plate provisions may affect the rights of the parties under the agreement. Although somewhat standard, the effects of their inclusion or exclusion must be carefully considered. Some of the most commonly accepted provisions are: a confidentiality agreement must be “reasonable” to be applicable. To determine adequacy, courts become factors such as: In particular, third-party contractors often work in a specialized function for a company and have regular contact with employees, customers and/or suppliers.