The thesis aims to analyze the application of the contractual penalty in connection with a duty of confidentiality agreed by professional parties. The legal focus is primarily on the Danish legal rules and the existing Danish law and secondly on the interpretation of the Draft Common Frame of Reference, while the economic focus is on the theory of law and economics and behavioral science. The thesis analyses the need for contractual protection of confidential information in excess of the legal protection provided by the Danish general law of contractual damages, with a focus on the nature of business confidence and defective enforcement by the judicial system. The law and economic analysis explores the rationales for a contractual penalty with regard to risk sharing and reliance decisions as well as to provide incentives in order to induce efficient ex ante investment and ex post trade and to prevent breach. The result is that a punitive penalty clause is efficient. The analysis of the existing Danish law in regard to a penalty clause with a punitive nature demonstrates that the conditions and amount of the penalty must be modified in order to be enforced by law, and that the Marketing law rule of due monetary consideration is insufficient to protect business confidence and to ensure efficiency. The starting premise of the Draft Common Frame of Reference is that a punitive penalty is enforced to a larger degree than by Danish law but it is contingent on the choice of forum. The theory of behavioral science is applied on the efficient utilization of the penalty and the findings on existing Danish law and the DCFR. The analysis demonstrates that the necessary legal modifications of the penalty are to a certain degree coherent with a de facto efficient penalty, when due consideration is taken to the decision maker’s cognitive biases and bounded rationality. The outcome is a concrete recommendation including a draft of a non-disclosure agreement.
|Educations||MSc in Commercial Law, (Graduate Programme) Final Thesis|
|Number of pages||116|