A nondisparagement clause is a contractual provision which prohibits one party to an agreement from making negative remarks about the other. This type of clause is commonly included in employment contracts and other business contracts in order to protect the reputation and interests of both parties. In general, a nondisparagement clause is designed to prevent one party from speaking poorly of the other and limit legal repercussions or damages.
What Does a Nondisparagement Clause Include?
A nondisparagement clause should clearly define the types of behaviors that would constitute breach of the agreement. It should also define the scope of the clauses, which may include verbal, written, or online communications. It should also specify any penalties for violation of the clause. For example, a company may specify a financial penalty for violations of the clause or even termination of the contract.
Examples of Nondisparagement Clauses
One example of a nondisparagement clause would be an employment contract in which an employee is required to sign an agreement not to make any negative comments about the employer. This may include public statements, social media posts, or private communications about the company. Similarly, a business deal may include a clause that states neither party may make negative remarks about the other either publicly or privately to protect their mutual interests.
What Are the Risks of Breaking a Nondisparagement Clause?
Breaching a nondisparagement clause can have serious consequences. Depending on the specifics of the clause, the breaching party may be liable for monetary damages or other contract-related penalties. Furthermore, negative comments about the other party may damage their reputation or business interests and be difficult to undo. As such, it is important to abide by the terms of the nondisparagement clause to protect all parties involved.