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The In-House Advisor Published by Shepard Davidson & Renee Inomata

Category Archives: Liquidated Damages

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Consider Liquidated Damages to Deter Employees From Misappropriating Company Information

Posted in Confidentiality, Contracts, Hiring, Liquidated Damages

It is not unusual for employment agreements to mandate that when an employee leaves a company, whether voluntarily or by termination, he or she must return all company information. As the employer in EventMonitor v. Leness recently learned, however, relying on the courts to enforce such an obligation is risky, at best.

Drafting a Practical and Enforceable Non-Disparagement Provision

Posted in Confidentiality and Non-Disparagement, Liquidated Damages, Settlements and Releases

More than once, an in-house counsel has called me up wanting to sue a former employee because s/he has been “bad-mouthing” the company despite having agreed not to disparage the company as part of a settlement or severance agreement.  Nevertheless, I Often have had to give the client the bad news that, in light of… Continue Reading

How to Negotiate and Draft Enforceable Liquidated Damages Provisions

Posted in Contracts, Liquidated Damages

As suggested in “The Effective Use of Liquidated Damages Provisions,” there can be a fine line between an enforceable liquidated damages provision and an unenforceable penalty clause.  Thus, when drafting an agreement, it is important to keep in mind that a payment-for-breach provision will only be enforceable if, at the time of drafting: It would be difficult… Continue Reading

The Effective Use of Liquidated Damages Provisions

Posted in Liquidated Damages

The Basics of Liquidated Damages Provisions A liquidated damages provision fixes the amount of money one party will pay to the other if a breach occurs.  Because the law of contracts is designed to be compensatory, however, a payment-for-breach-clause that is penal will not be enforceable (Some reasons for this are discussed in “Why Not Enforce ‘Penalty’… Continue Reading