QUESTION
What recourse does the Discloser have if the Receipient violates an NDA?
Asked on Aug 27th, 2014 on Breach of Contract - Pennsylvania
More details to this question:
A mutual non-disclosure agreement (NDA) exists between two parties.The Parties agree that Confidential Information of a Party might include, but not be limited to, that Party's customers. The Discloser provides confidential information about a customer to the Recipient in order to pursue a common business partnership. The NDA states "Either Party may disclose Confidential Information to the other Party in confidence provided that the "Discloser" identifies such information as proprietary and confidential". The Discloser does so verbally based on the agreement "notification to be done orally, by e-mail or written correspondence, or via other means of communication as might be appropriate". The Recipient then opens discussions with the customer unbeknownst to the Discloser. As a consequence, the Recipient and Customer enter into a business relationship without the Discloser's knowledge. The Recipient now becomes a competitor of the Discloser. What recourse does the Discloser have? .
1 ANSWER
Assuming that the contract does not limit the remedies available to the non-breaching party, you would sue the recipient for breach of contract, seeking a number of different or alternative remedies. For example, you can seek to recover money damages caused by the breach. You may be able to have a constructive trust imposed over the proceeds of the recipient's relationship with the customer. You may also seek an injunction against the recipient continuing to deal with the customer and/or competing with you, and possibly a preliminary injunction to prevent the recipient from continuing his deal with the customer during the pendency of the litigation (it will be difficult to win a motion for a preliminary injunction.)
Answered on Aug 28th, 2014 at 11:45 AM