A Trap for the Unwary?


Word processing programs make it easier to archive and re-use work product, as we all know.  This has led to the expansion of standard agreements by adding boilerplate, sometimes without thinking.


One example is a Confidentiality Clause in a settlement agreement between parties in a lawsuit. 


How can one make a settlement “confidential” if one needs a Good Faith Settlement order from the court to immunize at least one of the settling parties from claims by non-settling parties in the same suit?  The latter are entitled to know the settlement’s terms.  Confidentiality makes no sense and would be impossible, without all kinds of additional court procedures, including gag orders, etc.


Then, there’s the problem of enforcement.  First, how would one know who breached that provision?  Machiavelli might leak the settlement terms then blame the other party in order to exact some revenge, whether by a sanction in the settlement agreement (e.g., give back money paid) or by filing a motion or by publicly complaining about the innocent party blabbing (which it didn’t do). 


Second, a settlement agreement is supposed to settle a matter, not provide a vehicle for continuation of the battle, but on different grounds.


Too often, we leave standard provisions in our forms and forget to edit them appropriately.  Editing is appreciated by our clients, if not by our fellow practitioners.

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