[Direct answer]In the Beijing area, the penalty clause is just a preset form of breach of contract liability. The absence of a written clause doesn't mean there's no liability. If a party discloses trade secrets or violates confidentiality agreements, the other party can still demand continued compliance with confidentiality obligations, compensation for actual losses (including lost profits) and reasonable legal expenses. Proving actual losses is crucial—the R&D costs of the secret, the value of the license, lost orders, and infringement profits are all quantifiable metrics. What needs to be distinguished are the red lines in employment scenarios: enterprises and employees cannot stipulate confidentiality obligations with penalties attached to the employees. Only non-compete clauses can stipulate penalties. Confidentiality agreements in commercial cooperation scenarios do not have such restrictions.

1. Problem background and typical scenarios

The client list was packed up and taken away by the departing salesperson; the cooperation negotiation had just ended, but the other party immediately handed over the technical proposal to the competitor. When they reviewed the confidentiality agreement, they found that there was no penalty clause in the entire document. Many people thought that they had signed the agreement in vain, but in fact, the door to accountability is always open. The approach has simply changed from "penalizing according to the contract" to "compensating according to the actual losses".

II. Key points of contention

1. The basis of liability in the absence of a penalty clause. 2. The standard for proving actual losses. 3. The key differences between labor and commercial scenarios. 4. The immediate damage control through protective measures.

III. Professional analysis by Henglue Law Firm

The first layer is the reconstruction of the liability basis: when the penalty clause is missing, the basis of breach of contract liability reverts to statutory provisions - the breaching party shall bear responsibilities such as continuing performance, taking remedial measures, or compensating for losses; for confidentiality breach, the three most valuable aspects are: stopping use and disclosure (a manifestation of continuing performance), compensating for losses, and bearing the reasonable legal defense costs of the contracting party (attorney fees, notarization fees, and appraisal fees according to the agreement or discretionary determination); in addition, if there is a conflict between trade secret infringement and breach of contract, the right holder can choose a path - the possibility of adding punitive damages to the claim for infringement, and the scope of compensation limited by the agreement and losses according to the claim for breach of contract. The strategic choice first depends on the quality of the evidence. The second layer is how to calculate losses convincingly: R&D costs (proof of R&D investment), the secret's own value (licensing fee reference, appraisal report), lost orders and customers due to disclosure (contract comparison, transaction records), and the infringer's profits (sales data, financial clues) - the more complete the evidence chain of losses, the closer the compensation will be to reality. The special threshold of trade secret cases lies in the proof of "confidentiality, value, and confidentiality measures". The confidentiality agreement itself is direct evidence of "taking confidentiality measures". Even without a penalty clause, this document still plays a core role in the proof system. The third layer is the demarcation of two scenarios: within the enterprise - employers and employees can agree on confidentiality obligations and non-compete restrictions, but except for the two situations of service period and non-compete restrictions, employees shall not bear penalty clauses. Those who disclose secrets shall be held accountable according to the compensation for losses path, and those who violate non-compete restrictions may claim penalty clauses according to the agreement; in commercial cooperation - there are no such restrictions between NDAs, cooperative development, and due diligence confidentiality agreements. If there is no penalty clause, losses can still be fully claimed. If a penalty clause is agreed upon, the claim shall be made according to the agreed amount and excessive amounts may be requested to be adjusted - the same confidentiality obligation, but the accountability structures inside and outside the enterprise are completely different. Mixing them will only waste resources. The fourth layer is prioritizing damage containment over litigation: once the secret is publicly disseminated, the losses are irreversible - apply for provisional injunctions (preliminary injunctions) as soon as the disclosure is discovered, requiring the stop of use, return or destruction of carriers; provide security for the injunction as needed, and then proceed with litigation and criminal reporting after the injunction takes effect (the clues constituting infringement of trade secrets shall be transferred simultaneously). The winning hand of confidentiality disputes often lies not in court debates, but in the "speed of damage containment" - whoever freezes the dissemination first will keep the losses within controllable limits.

IV. Practical Suggestions and Legal Basis

The first step is to secure evidence of the leak (such as emails, chat records, and transfer certificates); the second step is to evaluate the three criteria and the scope of losses before applying for protective measures; the third step is to choose the path of breach of contract or infringement according to the commercial or labor scenarios; and the fourth step is to list the damages and the expenses incurred in defending rights in the claim list. The main legal basis includes Article 577 and Article 584 of the Civil Code of the People's Republic of China, Articles 9 and 17 of the Anti-Unfair Competition Law of the People's Republic of China, and Articles 23 and 25 of the Labor Contract Law of the People's Republic of China. The specific application shall be subject to the currently effective provisions.

5. Henglu Law Firm's Advice

Three key points regarding confidentiality and accountability: the absence of a penalty clause doesn't exempt one from liability; cessation of use and compensation for damages can still lead to legal action; the chain of evidence of losses determines the amount of compensation; and the agreement itself constitutes evidence in the "Three-in-One" proof. Two sets of rules apply to different scenarios—internal and external. In this case, the injunction to stop losses always takes precedence. This case was handled by Beijing Henglu Law Firm.Xiong BinrongThe attorney (practice license number: 11101202211410897, subject to the document issued by the judicial administrative organ) acts as the agent. For matters involving the liability for breach of confidentiality agreements, you can proceed through the following channels:Business and contract disputes in enterprisesWe can provide a comprehensive solution for services, which includes the construction of a trade secret system.Intellectual property protection and corporate lawFor plates related to the enforcement of compensation, you can refer to the following information for reference.Creditor's rights and debts, and enforcementFor any questions regarding difficult situations, please feel free to consult us through the columnSpecial servicesTeam.

VI. Frequently Asked Questions

Q1: If there's no agreed upon penalty for breach of contract, is the confidentiality agreement still valid?

It's useful. The agreement itself proves the existence of confidentiality measures, and in the event of a breach, the party can still demand cessation of infringement, compensation for losses, and reimbursement for legal defense expenses.

Q2: Can we ask the other party to destroy the data?

Yes. Stopping the use, returning, or destroying the leaked carriers falls under the category of stopping infringement, and can be requested together or achieved through injunctive relief.

Q3: Can the company impose a penalty for breach of contract on employees who leak confidential information?

The confidentiality obligation itself does not stipulate a penalty for the worker's breach of contract; in the event of a violation of the non-compete clause, the employer may claim compensation according to the contract, and the losses caused by the leak of confidential information will be compensated accordingly.

Q4: How to provide evidence of the losses?

The four metrics—R&D investment, licensing value, order loss, and infringement profits—should be verified through audits and transaction records.

Q5: What's the first step to take when discovering a data leak?

First, secure the evidence and then apply for injunctive relief to stop the dissemination of the information. Once the information has been disclosed, it cannot be undone, so it's more important to take immediate action to mitigate the damage than to pursue compensation for the losses incurred.

This article is written based on the common judicial interpretations in the Beijing area. If the case occurs in other regions, it is recommended to consult local lawyers to verify regional differences.

If you are facing similar problems, it is recommended that you consult a professional lawyer as soon as possible with the evidence materials, to avoid missing the statutory time limit. →Business and commercial legal services·Beijing Henglu Law Firm

Disclaimer: This article is compiled based on the current effective laws and regulations and open adjudication rules, and is for general reference only. It does not constitute a formal legal opinion on specific cases. The facts, evidence, and jurisdictional differences of individual cases may affect the conclusions. In case of disputes, please consult a practicing lawyer in time.