Settlement agreements often include a restrictive confidentiality provision that prohibits a party from discussing any information regarding the agreement with anyone except his attorney or spouse. If the agreement is silent about damages, then the party who alleges a breach will have to prove their actual damages and can only recover those. The violating party may be required to pay a fixed amount of money (as stated in the agreement) or the agreement may require the violating party to forfeit any funds received in a lawsuit settlement. The penalty for violating a confidentiality agreement varies depending upon the terms of the agreement. Īny party who files a breach of contract lawsuit will likely include a demand for damages for the harm he or she allegedly suffered as a result of the alleged breach. Each agreement seeks to restrict employees or former employees from participating in distinct activities. In employment contracts, a non-compete agreement is the most restrictive while a non-solicitation agreement is moderately restrictive. A “more restrictive” agreement by contrast can prevent a party from disclosing to anyone the facts of a lawsuit, legal theories of a lawsuit’s plaintiff or defendant, or the terms of a lawsuit settlement. A “least restrictive” agreement, for example, may only prohibit a party from discussing the monetary terms of a legal settlement with the media. There are various forms of confidentiality agreements, ranging from “least” to “most” restrictive. Often one party to a confidentiality agreement is either not fully aware of or does not fully understand all of the agreement’s provisions. A party who believes that he or she has been harmed by the breach can bring legal action, including asking for damages for the harm he or she allegedly suffered.īefore you sign a confidentiality agreement, make sure you know exactly what acts, events, or statements it covers. Violating a confidentiality agreement is a breach of a contract. Confidentiality agreements (also called non-disclosure agreements, or “NDAs”) are common in many different contexts, including litigation settlements, business transactions, employment contracts and intellectual property.
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