Template:Injunctions and confidentiality agreements

Injunctions to enforce confidentiality agreements

There common conception, at least among the draughtspeople of confidentiality agreements, that having your recipient acknowledge in the contract that your contractual obligations, while of course severe, are of a type for which damages might not be adequate compensation improve your odds of obtaining an equitable injunction later. Thus, it is common to see confidentiality agreements do just that.

But — and here’s the snippy bit — in the commercial world, anything of value is meant to be quantifiable in the dollars and sense. Homo economicus’ view might be blinkered; it might be philistine — but it conforms to classic economic theory. So in one sense if the right you feel has been infringed can’t be addressed with folding stuff, it can’t have been very valuable.

And so, in most cases where a confidentiality agreement bites, this seems to be the case. If — boring example — I give you my confidential shareholding arrangements so you can complete your KYC procedures, or if — racy one — for a fat payoff, you agree a venal gagging clause to not disclose the terrible psychological damage I inflicted on you where you were my studio gopher, and then you go and blab about these things, I might be embarrassed, but I am not likely to suffer much direct financial loss. Am I? Even if you publish my confidential client list to the world, my loss is likely to be indirect: the loss of profits from business I didn’t, as a consequence win, which any student of the law of contracts will know is hard to recover under a normal contract action.