Remedies: Liquidated Damages

Remedies: Liquidated Damages

A liquidated damages clause may be useful to include in an NDA since the level of damages for breach is often difficult to prove. In the following exemplar, the parties agree to award a specified amount (which amount is a fair representation of the loss expected to be sustained by the aggrieved party) as liquidated damages for breach of the NDA. To avoid hair-trigger application of this clause, this clause is only tripped by “intentional” breaches:

Exemplar N23C-1

Further, if Contractor materially breaches this Agreement either intentionally or through failing to exercise a commercially reasonable standard of care, Contractor shall pay to Company as liquidated damages and not as a penalty, the sum of [one hundred thousand dollars ($100,000.00)]; provided, however, that unintentional or inadvertent acts or omissions, including disclosures of Confidential Information, would not constitute violations of this NDA for purposes of this liquidated damages clause.