Adult film star Stephanie Clifford, a/k/a “Stormy Daniels” signed a Non-Disclosure Agreement (NDA) with “Essential Consultants, LLC,” a company formed by attorney Michael Cohen for the purposes of making the payment to Ms. Clifford. The NDA prohibits Clifford from discussing an affair she alleges she had with President Donald Trump back in 2006. Paragraph 5.1.2 of the NDA provides that in the event of a breach of the agreement, Clifford shall be required to pay Mr. Trump $1 million for each breach. Essential Consultants claims Clifford breached the NDA on at least 20 occasions; accordingly, EC claims Ms. Clifford owes more than $20 million in damages.
Using legal concepts and information presented in Chapter 19 of your textbook, answer the following questions:
What types of damages are ordinarily available in a breach of contract action. Discuss the purpose of ordinary breach-of-contract damages and how they are calculated.
What type of a damage clause is at issue in the contract above? Explain.
Explain the considerations a court will use to determine whether the damage clause is enforceable.
*No offense or political statement is intended through the question posed. The scenario presented just offers a timely, real-world illustration of a concept presented in this chapter that was too hard to pass up in the otherwise dull world of contracts. :)
