Mobile menu

Clause in confidentiality agreement (English law)
Thread poster: Sara Freitas

Sara Freitas
France
Local time: 09:29
French to English
Aug 4, 2006

I have been asked to sign a confidentiality agreement for a new client. I wanted to share this clause with you to see what you thought. (I have told the client I can't sign unless the clause is removed on the advice of my professional liability insurer's legal hotline). The rest of the agreement is very run-of-the-mill, so I was taken aback when I saw this clause. I have never seen anything quite like this before.

Here it is:

Damages
The contractor agrees that damages may not be an adequate remedy in the event of any breach or threatened breach of the provisions of this agreement and the contractor shall not oppose the granting of equitable relief, including injection and/or specific performance without the need to prove or quantify loss or damages


Is this as scary as it sounds?

Best regards,
Sara


Direct link Reply with quote
 

Astrid Elke Witte  Identity Verified
Germany
Local time: 09:29
Member (2002)
German to English
+ ...
I would not sign it Aug 4, 2006

My brief research on the Internet indicates that this type of phrasing is used in the USA, and that the "injection" does indeed refer to the remedy of execution by lethal injection when used in connection with the phrase "equitable relief"! I would presume that you do not wish to be executed if the client is not satisfied with the translation.

Astrid


Direct link Reply with quote
 
RobinB  Identity Verified
Germany
Local time: 09:29
German to English
Typo Aug 4, 2006


Damages
The contractor agrees that damages may not be an adequate remedy in the event of any breach or threatened breach of the provisions of this agreement and the contractor shall not oppose the granting of equitable relief, including injection and/or specific performance without the need to prove or quantify loss or damages


Hi Sara,

I'd imagine this is a typo for "injunction", so I don't think anybody's proposing to execute you. From my perspective, however, giving your blanket consent from the outset to a clause under which you accept such legal action against you, apparently without any right of remedy on your part, might be particularly inadvisable.

We have contracts with some of Europe's largest banks and corporations, some of which run to 20 pages or more of tightly written 9 point A4. They contain various provisions setting out the remedies available to both parties, but none of them feature a clause like that, which I personally would regard - if you'll pardon the pun - as inequitable and would most certainly have removed.

Feel free to contact me privately if you like.

Robin


Direct link Reply with quote
 

Sara Freitas
France
Local time: 09:29
French to English
TOPIC STARTER
Injunction/injection Aug 4, 2006

Thanks to both of you for the input. I just re-checked the agreement and it does say injection, so at least the typo wasn't mine!

Hi Robin!

Well, at least they aren't going to execute me! In any case, it is English law that governs the agreement, not U.S.

I was quite shocked by the clause and asked the client to remove it late yesterday. No word back as of yet.

Also, my terms of sale expressly limit my total liability to the amount of the contract in question, which is in direct conflict with what they have asked me to sign.

The ball is in their provebial court as of now.

Will keep you posted.

Many thanks!

Sara



[Edited at 2006-08-04 08:57]


Direct link Reply with quote
 
KLS
Local time: 08:29
Spanish to English
+ ...
Yes, it's quite scary Aug 4, 2006

Sara,

This clause widens the remedies available to the work provider in case of any dispute.

The normal remedy of damages is a common law remedy. If you sign this clause, you agree that the work provider can apply to the court for equitable remedies, the most important of which are injunction (sic) and specific performance.

Injunction means that the court can order you to abstain from doing something, or (less usually) to do something.

Specific performance means that the court can order you to do a specific act, for example, perform a contract.

The key is that the work provider does not have to prove that it has suffered any actual loss (as it would have to do in order to be awarded damages from you).

Damages can be awarded in addition to equitable remedies.

You can be pretty sure that this clause is not included for your benefit. I think it was a very wise move to run it past your insurers and you should now follow their advice, as otherwise your insurance will almost certainly be invalidated.

BTW I think Astrid was joking when she referred to lethal injections (I certainly hope so :-0).

Alan


Direct link Reply with quote
 

Anjo Sterringa  Identity Verified
Spain
Local time: 09:29
Member (2003)
English to Dutch
+ ...
That is the one thing I ALWAYS check Aug 4, 2006

Sara Freitas-Maltaverne wrote:

Also, my terms of sale expressly limit my total liability to the amount of the contract in question, which is in direct conflict with what they have asked me to sign.


That is what I always check, and I have managed to change a few (translation) agreements with agencies. Your liability should preferably be limited to the value of the job.

Some agencies with unlimited liability clauses do not want to change their ways, so I do not want to work for them.

I am always appalled if colleagues say they sign any agreements without reading them. "It will be ok, I do not understand them anyway".

There was even one agency that had the agreement as a pop-up box on their web site and you had to click 'yes I accept' just to complete the online application form! The agreement contained an unlimited liability clause so I never registered with them...

This is a confidentiality agreement (they say) and I wonder what breach are they expecting?

Good luck!


[Edited at 2006-08-04 09:55]

[Edited at 2006-08-04 11:07]


Direct link Reply with quote
 
RobinB  Identity Verified
Germany
Local time: 09:29
German to English
Your terms Aug 4, 2006

Sara Freitas-Maltaverne wrote:
Also, my terms of sale expressly limit my total liability to the amount of the contract in question, which is in direct conflict with what they have asked me to sign.


You shouldn't rely too much on your own T&Cs. Firstly, you may well be subject to statutory liability obligations over and above the value of any specific contract (including consequential damages due to more than minor negligence on your part). Secondly, this is the sort of question that can ultimately only be decided by a court on the merits of a specific case at issue.

That's why a mutually agreed master agreement covering both parties' rights and obligations will always establish a better, more sustainable business relationship than a situation where both sides think that their own T&Cs will prevail. Incidentally, our own agreements with customers generally have a "keep-it-out-of-the-courts" clause that calls for disputes to be settled amicably or by a mutually agreed arbitrator. Cuts costs and increases trust, I think.

Robin


Direct link Reply with quote
 

Derek Gill Franßen  Identity Verified
Germany
Local time: 09:29
German to English
+ ...
Good move... Aug 4, 2006

It was a good move to ask them to strike this clause, even though - and I agree with Robin on this - there is also a very good chance that a (European) court would not uphold it if it came to a dispute. There is, however, always a chance that they could...

"Injection" is surely a typo for "injunction," and would most likely be construed as such by a court of law.

Robin's "keep-it-out-of-the-courts" clause seems fair and reasonable (I'd sign it): The moment it gets to the courts, it will get expensive. Such a clause does not exclude the possibility of turning to the courts, but it usually does make the ensuing dispute rather short (if the agreement is carefully drafted and is fair).

I also agree with Robin's first statement. I'm not so sure that a client would be willing to limit the liability to the value of the assignment. That would be a reduction of what is provided for by German law, for example, which extends the liability to cover all damages caused by the breach. Merchants can limit their liability to this extent, but in many cases it "just won't fly."

I, personally, like to negotiate the terms for each assignment individually. I tend to shy away from prefabricated terms and conditions, but maybe it's just me. The liability insurance for my translation business also helps me sleep better (you might want to consider that if you are interesting in limiting your risks).

The problem with clauses like this one is that - if it were to be upheld - they could pretty much name any amount as damages without having to prove that they were actually incurred, and the other party would have to pay up -- even if there was no actual harm done ("threatened breach"). But you already knew that - the meaning is pretty self-evident, i.e. this is not meant as legal advice in your particular case.

This is a classic example of "If you think that a particular clause is extreme, then it probably is." (See http://www.proz.com/translation-articles/articles/554/1/Contracts-I:-Would-you-sign-this? ).


Direct link Reply with quote
 

Sara Freitas
France
Local time: 09:29
French to English
TOPIC STARTER
My terms vs. their terms Aug 4, 2006

Robin and Derek, thank you.

Not to worry, I have requested that the client strike this clause from the agreement. I do have professional liability insurance, and I have acted upon my insurer's advice (and my own common sense) and have not signed anything.

Just to clarify, this is the confidentiality agreement that I must sign before even seeing the document so that I can prepare a price quote. It is for a translation into French, which means that I would be outsourcing it to at least two different professionals (translator and proofreader).

Are you suggesting that an overall agreement be drawn up that covers all issues related to the project, from confidentiality to the performance and acceptance of work to payment rather than having, for instance, the client's confidentiality agreement plus my T and C plus whatever else might come up as the project progresses? At this point there is no contract, I haven't seen the document, and no price quote has been issued.

Thanks for any input.

Best regards,
Sara

[Edited at 2006-08-04 12:20]

[Edited at 2006-08-04 12:21]


Direct link Reply with quote
 

Derek Gill Franßen  Identity Verified
Germany
Local time: 09:29
German to English
+ ...
Insurance Aug 4, 2006

Oh, I'm sorry about that. I overread the fact that you DO have liability insurance -- good for you.

I once had an agency initially demand something similar. I wrote back asking them to strike the clause and promised that -- as a professional -- I would, of course, maintain confidentiality. I told them that I was, of course, willing to assume liability to the extent provided for by law.

We came to an agreement on that basis and have had a nice working relationship ever since. I really have nothing to fear (and no reason to limit my liability any further) because I keep my promise.

Had they not budged, I probably would have refused to work with them. It's all about give and take, if you ask me.

My two cents...

[Edited at 2006-08-04 12:38]


Direct link Reply with quote
 

Sara Freitas
France
Local time: 09:29
French to English
TOPIC STARTER
Give and take Aug 4, 2006

Derek,

I agree completely about give and take. The thing that worries me here is that I will have to have my outsourcers sign an equally-restrictive confidentiality clause and I will have to keep the client informed of who gets what copies of what documents and when.

I am starting to feel that if their report is really that top secret then perhaps it would be better to have the translator work in-house on their premises to ensure that none of the information leaves the company.

Robin,

Thank for the reminder about the "keep it out of court" clause. If the client is willing to strike the scary clause and add a clause about amicable settlement of disputes, then I will go forward with it, but I might just take it to my lawyer (euh...if he speaks English, that is...I have only ever asked him about French documents and issues in the past) and get some additional advice about drafting an agreement between me and my outsourcers.

It all sounds complicated, but the project is a big one and it may turn out to be worth it depending on how the client reacts to my initial request to strike the clause. If they balk, I will have to walk away.

Regards,

Sara


Direct link Reply with quote
 


To report site rules violations or get help, contact a site moderator:


You can also contact site staff by submitting a support request »

Clause in confidentiality agreement (English law)

Advanced search


Translation news





CafeTran Espresso
You've never met a CAT tool this clever!

Translate faster & easier, using a sophisticated CAT tool built by a translator / developer. Accept jobs from clients who use SDL Trados, MemoQ, Wordfast & major CAT tools. Download and start using CafeTran Espresso -- for free

More info »
Wordfast Pro
Translation Memory Software for Any Platform

Exclusive discount for ProZ.com users! Save over 13% when purchasing Wordfast Pro through ProZ.com. Wordfast is the world's #1 provider of platform-independent Translation Memory software. Consistently ranked the most user-friendly and highest value

More info »



All of ProZ.com
  • All of ProZ.com
  • Term search
  • Jobs