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How Avenatti is Making the Wrong Argument in NDA Breach Case


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3/27/2018
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To be sure, the Stormy Daniels (a/k/a Stephanie Clifford) case, where President Trump's personal attorney, Michael Cohen, has threatened Ms. Clifford with $20 million in damages for breaching her contract, and violating the confidentiality agreement is a very politically charged case. 

But that doesn't mean we can't apply cool logic and legal reasoning to test the strength - and wisdom (or the lack thereof) - of the respective attorneys' legal arguments - at least those that have been advanced through the media.

By way of background, the claims can be summarized as follows:

The Relevant Facts of the NDA Agreement

Leading up to the 2016 election, Ms. Clifford received a one-time payment of $130,000 in exchange for her signature of a confidentiality, or non-disclosure agreement (in legal shorthand, "NDA"),  whereby she agreed not to discuss her alleged affair with then-candidate Trump on threat of $1 million per violation of the agreement.

Ms. Clifford then has gone on to discuss - publicly - her alleged affair with Mr. Trump, on several occasions, and across different news outlets.

Cohen/Trump's Claim

Mr. Cohen's breach of contract claims are fairly simple and straightforward:

1) Ms. Clifford signed a confidentiality agreement;

2)  Ms. Clifford was paid for her agreement to keep their (alleged) relationship confidential; and,

3) Ms. Clifford broke that agreement.

Avenatti's Claims

As is now well known, Ms. Clifford's attorney, Michael Avenatti, has asserted that the agreement never became binding on Ms. Clifford because the other side did not sign the agreement.

But is his argument right on the law?

How Avenatti is Making the Wrong Argument in This NDA Case

In New York, as well as several other jurisdictions, the mere fact that an agreement wasn't countersigned does not inherently invalidate the agreement. That is why, in my view, Avenatti is clearly making the wrong argument.

A far better legal argument (again, in my view), points to a fourth element that is normally required of a plaintiff in a breach of contract action, namely, that the plaintiff must prove that they did not breach their end of the agreement (for more on this topic, see "How to Prove a Breach of Contract Case in New York").

In this case, Avenatti could argue that since President Trump's camp publicized their version of his relationship/the lack thereof with Ms. Clifford, they themselves had breached the confidentiality agreement, which means that Ms. Clifford could no longer be held to her end of the agreement.

While I am not saying that this second argument would ultimately carry the day, it certainly seems like a far stronger legal argument than the one currently being advanced by Ms. Clifford's attorneys, which I believe would be dead on arrival in most courts.



Category: Breach of Contract

Jonathan Cooper
Non-Compete, Trade Secret and School Negligence Lawyer

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