Non Disclosure Agreement Penalty Clause

This clause should include the possible consequences of an offence and expressly respect your right as part of the disclosure to seek appropriate remedies. You wish to be prepared for this unfortunate event by including in your secret a clause that will determine the jurisdiction responsible for all the resulting legal actions. The cost of an infringement can be difficult to calculate or prove, so a mutual agreement in advance on what constitutes a fair solution will help you avoid a lengthy litigation later on. In this type of clause, it is important to keep in mind that most jurisdictions do not impose unrealistic deadlines for a legal agreement, including non-disclosures. The Dutch Civil Code defines a contractual penalty as any contractual provision stipulating that the debtor, if he does not properly fulfil his obligation, must pay a sum of money or provide another benefit, whether that amount of money or any other benefit is conceived as a remedy or an inducement to carry out the undertaking. In trying to bring some love to this neglected and customary agreement, we have taken the liberty of stressing its importance here and unveiling the 10 key clauses necessary to make your confidentiality agreement more dignified than the simple paper on which it is written. The article of the Dutch civil code stipulates that a creditor cannot demand the performance of the contractual penalty and the obligation to which this sanction clause is bound. What is due on the basis of a penalty clause under Dutch law replaces damages that should have been due by law (legal provisions). A creditor cannot demand the enforcement of the penalty if the default is not attributable to the debtor. Although the criminal clauses in Dutch law are not proportionate to the harm caused by the offence, they must not be totally excessive.

When a sanction is too draconian, the courts (at the request of the debtor) may reduce the sentence to “moderate” in accordance with the principle of Dutch law that is imperative of adequacy and fairness. There are also certain types of contracts (for example. B the general terms of use with consumers or employment contracts) that are governed by specific rules that prevent or limit the application of penalty clauses. Criminal clauses under Dutch law are contractual clauses by which the parties may impose sanctions on each other if one of them breaches a contractual obligation. Such penalty clauses generally provide for a sum of money (the penalty) to be paid by a party who violates the contract to the innocent party.

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