Remedies: Damages

Remedies: Damages

A “limitations of liability” clause in an NDA that restricts or prohibits a party from recovering special or consequential damages can be problematic because the bulk of damages incurred by a disclosing party arising from the breach of NDA is often consequential in nature. Accordingly, such a limitations clause could preclude the aggrieved party from recovering the level of damages required to compensate it for the full extent of its injury. To avoid this untoward result, the parties may agree to stipulate that any damages awarded as a remedy for breach of an NDA shall not be subject to any other terms in the NDA limiting or prohibiting the recovery of consequential or special damages.

Exemplar N23B-1

Notwithstanding any provisions of this Agreement to the contrary, the Parties agree that damages for breach of the provisions of this Agreement will be allowed as direct damages and shall not be deemed to be special, indirect or consequential.