Confidentiality?

Question

How can confidentiality contracts be enforced and what sort of damages can be awarded if they are broken?

Answer 1

Usually the contract will spell that out.

A contract that says "I promise to keep this quiet" isn't very meaningful.

Technically, a contract is "quid pro quo" - I give you something, you give me something. If both sides don't get something, it's meaningless.

i.e. I keep your secret, you give me money. In that case, if I blab, I broke the contract and presumably have to return what I got because I'm not entitled to it any more. However, if there's no time limit, it's probably also meaningless; the terms of failure have to be spelled out.

that's typically what secret lawsuit settlements are all about - we'll pay your malpractice claim provided you don't tell others how much we're willing to settle for. If you do tell, the deal's off and you return the money.

I suppose also the point would be if I break the contract and it costs you (I blabbed about your Van Gogh painting, now people are breaking in to steal it) then you could sue me for those costs. That would be an interesting court case.

There are other stipulations too - you cannot contract to do anything illegal. (After all, the courts won't enforce illegal acts). A non-disclosure contract can't be enforced against legal compulsion to speak - as a witness in court, for example. If you conspire to do something illegal, that's conspiracy - also illegal.

Answer 2

They are enforceable. If you contract away your right to discuss, say, the terms of a settlement agreement or to not disparage the other person to the agreement or their business, and then later do, you have breached the agreement. Proof would be a function of finding out what you said and who all you told. That would probably take place in the context of a second lawsuit claiming a breach of the settlement agreement.

Damages would hopefully be described in the agreement -- whatever you want them to be and can agree upon, either some specific amount, or perhaps your release of them is void but theirs of you is not. You would get to try your lawsuit again but they would have waived their defenses.

It is just a matter of describing the behavior you want to proscribe and providing what remedy you want/can agree upon.

Answer 3

You can be sued if you break your agreement. For example, in the early 90s I worked on seatbelt/air bag defense cases for two prominent auto makers. In the course of my work, I was exposed to proprietary and trade secret information, as well as information that would be protected by attorney-client privilege and work product privilege. In the mid-90s I went to work for a plaintiff's firm who had several similar cases - the lawyers for whom I worked sent a nice letter to my new employer and to me reiterating the terms of my confidentiality agreement and admonishing us all that we should be careful not to violate it or we would be sued for damages. The amount of such damages depend on what harm to a person or business results from your breach of confidentiality. If you signed one, please abide by it.