Legal Question in Business Law in Pennsylvania

Re: Confidentiality agreement

Absolutely. What you are talking about is called �Liquidated Damages�. Parties to an agreement can decide ahead of time, what is the consequence of breaching the agreement. This fixed, pre-determined amount saves court time. If a contract has a Liquidated Damages provision, then the court does not have to figure out the cost of damages caused by the breach.

Of course, before you can address Liquidated Damages, the parties have to decide whether the other parties� actions really breached the agreement. That usually means the parties are going to court.

The basis for the penalty is usually the amount the breach will cause the innocent party. For example, if you are Coca-Cola, and an employee sells the secret Coca-Cola recipe to a competitor in breach of a confidentially agreement, how much did the lost recipe cost you?

I don�t understand your venue question, but an agreement to release a party from the obligations under a previously-signed agreement, can be negotiated at any time. Both parties, generally, have to agree to the new terms. Of course, agreements expire after a certain amount of time. The expiration time of an agreement can be included in the agreement or based on the type of agreement. For example, in Pennsylvania, non-compete-for-customers agreement is generally enforceable for only 3 years; but it depends on the circumstances between the parties.

Of course, please speak to an attorney about your specific situation before acting.

Good Luck.

Sharmil McKee

Business Attorney

McKee Law Office

Philadelphia, PA

www.mckeeoffice.com