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Frequently Asked Questions

How can direct damages for breach of confidentiality of a company be sought?

When seeking direct damages for a breach of confidentiality of a company, it's crucial to understand the various elements of a Non-Disclosure Agreement (NDA). The NDA should clearly define what constitutes confidential information and any standard exclusions. These exclusions may include information received from a third party, independently developed information, previously known information, publicly available information, consented disclosures, and legally required disclosures. A residuals clause can be included to exclude information retained in a person's memory from the definition of confidential information. However, this clause is often viewed with scrutiny by the disclosing party. In the event of a breach, the most common defense is obtaining an injunction from the court, which temporarily prohibits the receiving party from disclosing any confidential information. This is often more effective than filing a suit for monetary damages. However, some NDAs may include a disclaimer of consequential damages or limitations of liability clause, which can make it more difficult to recover damages for a breach of confidentiality. These clauses may limit the ability to seek indirect, consequential, special, exemplary, or punitive damages. Non-solicitation or non-competition provisions can also be included in the NDA, especially if business strategies are being divulged for future business dealings.
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