The primary purpose of a non-disclosure agreement (NDA) is to protect a party disclosing confidential information against unauthorized disclosure or misuse of the information by the receiving party. Any ambiguities in the NDA could result in the disclosing party having little recourse if a breach occurs. Because of this potential consequence, reviewing NDAs is important to identify the key elements of the NDA for negotiation, including remedies for breach.
Remedies When Breaches Occur
The remedies for breach of an NDA may consist of monetary relief and/or injunctive relief. When negotiating remedies for breach, also consider how consequential breaches will be treated.
- Monetary relief. Monetary penalties serve to deter the receiving party from breaching the agreement, and to compensate the disclosing party financially should a breach occur.
- Injunctive relief. The disclosing party may consider including a provision that would allow it to obtain a court order for injunctive relief. This would stop the receiving party, and any of the parties to whom the confidential information has been shared, from continuing to breach the agreement. This provision may be of limited use for one-time breaches that have already occurred in the past. But it can be invaluable for ongoing breaches, helping limit damage to the harmed party.
- Consequential damages. Receiving parties sometimes try to negotiate “consequential damages” provisions in NDAs. This provision seeks to limit the breaching party’s responsibility for other damages that occur as a result of the initial breach. In other words, the consequential damage would not have occurred but for the initial breach.
Remedies may vary, depending on whether a breach was intentional, negligent, or occurred despite the receiving party’s best efforts to avoid such a breach. The extent of the liability and who exactly shall be liable for the breach should be considered in advance when reviewing NDAs.
“Remedies” provisions should be reasonable and should be tailored to meet the parties’ needs. Baer Reed provides comprehensive NDA review and negotiation services to support corporate legal departments. Contact us to learn more about our cost-effective services.
Mr. Reyes graduated with honors from the Ateneo de Manila University, where he received the Procter and Gamble Student Excellence Award. He obtained his Juris Doctor degree from the Ateneo de Manila School of Law. During law school, Mr. Reyes was part of the Philippine delegation to the Willem C. Vis International Commercial Arbitration Moot held in Vienna, Austria. He was also a member of the Ateneo Society of International Law and the St. Thomas More Debate Society. He completed his internship at the Public Attorney’s Office. He wrote a thesis entitled: “To Kill A White Elephant: An Analysis of the Fiduciary Exception to the Corporate Attorney-Client Privilege”. Mr. Reyes is admitted to practice law in the Philippines and the State of New York.
Matthew Hersh earned a B.A. in Political Science from Columbia University in 1990 and graduated cum laude from Georgetown University Law Center in 1999. He also holds a master’s degree in international relations from the Georgetown University School of Foreign Service.
Cap. Avi Levak (Res. IDF) graduated from from Israel’s prestigious Ben-Gurion University of the Negev with a Bachelor of Science in Computer Science and Mathematics. He is also a Leadership and Communication coach trained in TuT coaching by Alon gal in Israel. Avi specializes in high-level, in-depth analysis of business and client needs, within systems and software strategy and architecture.
Ms. Lardizabal-Manzano is a graduate of San Sebastian College-Recoletos, where she earned her B.A. in Political Science. In 2003, she received her law degree from Lyceum of the Philippines and was admitted to practice law in 2004.
Mr. De Guzman graduated from San Beda College with a degree of Bachelor of Arts Major in Economics and received his law degree from San Beda College of Law. He is multilingual and is fluent in three languages: Chinese, Filipino, and English. He was admitted to the Philippine Bar in 2003.
Ms. Aquino-Batallones obtained a Bachelor of Arts degree in Development Studies (with Minors in Global Politics and Hispanic Studies) from the Ateneo de Manila University. In 2011, she received her Juris Doctor degree from Ateneo de Manila University School of Law. During law school, she interned at Romulo Mabanta Buenaventura Sayoc & de los Angeles then became an intern of Ateneo Legal Services Center’s Clinical Legal Education Program.
Ms. Cruz-Anonuevo graduated cum laude and top nine in her batch from Miriam College with a degree of Bachelor of Arts in InternationalStudies. She obtained her Juris Doctor degree from Ateneo de Manila University School of Law in Rockwell. During law school, she interned in Rivera, Santos, Maranan & Associates. She was also part of Ateneo’s Labor Law Bar Operations. She wrote her thesis on, “Stealing Privacy: Limitations on Media’s Photographic Invasion.,” Ms. Cruz-Anonuevo is admitted to practice law in the Philippines.
Ms. Tyler graduated cum laude from Georgetown University and received her law degree, cum laude, from Georgetown University Law Center. During law school, she interned at the United Nations Economic Commission for Europe. She also worked on The Tax Lawyer journal and was a member of the award-winning Barristers’ Council Mock Trial Team. Ms. Tyler is admitted to practice law in the State of California and the District of Columbia.