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Shapoorji Pallonji Oil and Gas Pvt Ltd
2018-01-29 08:41:59

Provisions for Non-disclosure agreements

In the case of NDAs is it appropriate to carve out consequential losses?

In my opinion, any breach of NDA will lead to consequential losses. For example in a pre-award stage, if the NDA is breached by subcontractors by leaking information and as a result with the tender is lost, can it be termed consequential loss and be exempted from remedy? Any thoughts will be appreciated
 •   2018-01-31 10:06:02
Hello Prem Chandar,

What is to be included and what is to be carved out is entirely left to the parties. The important point to be kept in mind is that you should specify what type of losses are considered as consequential losses which you want to carve out. Just specifying consequential losses many not help.

Coming to the second part of your question, the whole idea of carving out consequential losses is to exclude losses which are remotely connected with the breach. So taking your example, loss of tender may be the result of several other factors and not necessarily only due to sub-contractor's breach and will not stand judicial scrutiny. So it is better to exclude such remote losses.

 •  Pretorius Consulting  •   2018-02-07 07:35:54
NDA breaches should not contain a consequential loss Clause. It is important that you know what your rights are for recovery of damages in case of a breach. This will be based on case law under the governing law. Please note, in most cases, the burden of proof is the entity that is making the claim. This may be extremely difficult.
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