Stormy Daniels signed a Non-Disclosure Agreement with Michael Cohen. There is a place on the agreement for the signature of “David Dennison,” who is probably Donald Trump. Mr. Dennison/Trump never signed the agreement. The NDA includes a liquidated damages provision. “Liquidated” damages simply means damages would be hard to determine, so the parties agree in the NDA itself what the damages should be. As Harry Litman explains, this liquidated damages provision represents an effort at pre-determining the amount of damages if Stormy violates the NDA. See CNN news report. The agreement provides that if she breaches the agreement, she would be liable for $1 million per violation. So, Michael Cohn has sued her for $20 million claiming she violated the agreement 20 times.
Yea, yea, whatever. Selecting such high amount shows bad faith on the part of Michael Cohen and Donald Trump. In any court in the country, anyone suing for $1 million or more better have a very good explanation for that figure. That high an amount suggests it was pulled out of the air. In every discrimination case that settles, the parties sign a settlement agreement. The settlement agreement often contains a non-disclosure provision, just like the one Stormy signed. Sometimes, but not often, the parties agree to a liquidated damages amount. The amount, at least in my experience, is never over $10,000. It just looks silly and amateurish to have an amount in six figures, much less seven figures.
The liquidated damages amount is intended as a guess-estimate regarding how much the damages would be. Otherwise, it would be exceedingly difficult to put a number to how a party has been harmed because the other party blabbed about the settlement. There may be no dollar value. So, generally, I personally oppose including a dollar value. For most of us who lack any notoriety, there is no monetary value to the harm caused.
No, as Harry Litman explains, this use of a million dollars is more “Bronx bluster” than actual legal argument. In 99.9 % of the court rooms in the country, the Trump/Cohen legal team would show themselves to be bullies or amateurs with that sort of a dollar amount. Mr. Litman tells her in his piece on CNN not to worry about the liquidated damages. I would tell her the liquidated damages provision helps her much more than it helps Mr. Cohen/Dennison/Trump. And, that does not even get into the issue regarding whether the agreement is binding. It may not be binding. Mr. Cohen can sign as a lawyer, but he cannot sign as a party. Only Dennison/Trump can do that.