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Contract disputes lawsuit focuses on breach of confidentiality

On Behalf of | Nov 27, 2012 | Business Torts |

When a Florida company enters into an agreement with another entity, the contract between the two parties must clearly outline the expectations of each toward the other. Confidentiality clauses are often included, and are written to prevent the misuse of inside information that either party may gain about the other. When breach of confidentiality contract disputes arise, having a clearly drafted contract can help the parties determine a course of action, and can avoid lengthy and expensive litigation in many cases.

One long-running lawsuit between Hallmark and Monitor Clipper Partners demonstrates the contention that can arise when a contract is violated. The suit centers on Hallmark’s assertion that Monitor Company Group was hired in 2001 to rework Hallmark’s business model. In 2005, Monitor Clipper Partners, a sister company of Monitor Company Group, acquired a competitor of Hallmark named Recycled Paper Greetings, Inc.

Hallmark claims that trade secrets were misappropriated by Monitor Company Group. A federal jury agreed with the greeting card giant, and recently awarded Hallmark $31.3 million in damages. The award represents the end of litigation between the parties.

This lawsuit underscores the importance that companies place on securing their trade secrets. It is often impossible to avoid contracting with outside companies for certain business services, but doing so opens the possibility for breach of confidentiality issues and other contract disputes to arise. When essential trade secrets are improperly shared with outside parties, staggering losses can result. Companies in Florida and elsewhere must aggressively defend against such acts in order to protect their business interests.

Source: Insurance Journal, “Jury Awards Hallmark $31M in Trade Dispute,” Nov. 21, 2012