Contract and Commercial Law – The Law and Policy Blog

How Trump is misusing emergency powers in his tariffs policy

10th April 2025

A good way to commentate is to start with a puzzle: something that does not make sense – or at least does not make sense at first glance.

And one puzzle about the tariff policy of Donald Trump is why he as president is devising general United States trade policy himself, by a sequence of what can only be called decrees.

This is a puzzle because the constitution of the United States expressly provides that trade policy is for Congress.

Article I of the constitution provides that Congress is “to regulate Commerce with foreign Nations”.

The same Article also provides that Congress is to have the final word on imports and exports – though that provision is framed in terms of it not being for the individual states to have the final word:

“No State shall, without the Consent of the Congress, lay any Imposts or Duties on Imports or Exports, except what may be absolutely necessary for executing it’s inspection Laws: and the net Produce of all Duties and Imposts, laid by any State on Imports or Exports, shall be for the Use of the Treasury of the United States; and all such Laws shall be subject to the Revision and Controul of the Congress.”

Neither the so-called “commerce clause” or the “import-export clause” mentions the presidency having any role in trade policy.

And if you look at Article II – which provides for the powers of the presidency (and is the Article beloved by exponents of presidential power) – you will not not see mention of trade or commerce there either.

But there he is, conducting trade policy on a whim, by decree.

There he is, not imposing tariffs on one particular foreign nation, but recasting the entire tariff policy of the United States in respect of almost every country in the world – and the only exceptions are the ones he chooses.

How is Trump able to do this, when the constitution so plainly says that it is for Congress to set international trade policy and not the presidency?

This is the question to which I have set out an answer over at Prospect – please click and read here.

In essence, Trump is able to do so because he is (mis)using old emergency legislation passed by Congress, which was not designed for the purpose of setting general trade policy and has never before 2025 been used for this purpose (or even used to impose tariffs on another country, let alone every country).

And Congress is letting him do so.

As such, this tariff policy is not so much an example of presidential power, but of congressional impotence.

This is not an instance of Trump running with a power provided for the presidency by Article II and running with it as far as possible.

It is instead an example of him reaching over to Article I and stealing a power expressly allocated to Congress.

In essence: the way this is being done is as follows.

A statute from 1977 enables a president to take measures in the event of an emergency – that there is an “unusual and extraordinary threat”.

Once the president formally declares an emergency, the president can then put in place measures – measures which are defined (if defined at all) in the most general terms.

Before 2025, it would appear that the 1977 Act was used regularly by president but only against particular individuals and to impose particular sanctions.

As such, it in a way made sense for this Act to be used in the way it was.

But in 2025 came this executive order.

This executive order – really a decree – contains this extraordinary passage:

“I, DONALD J. TRUMP, President of the United States of America, find that underlying conditions, including a lack of reciprocity in our bilateral trade relationships, disparate tariff rates and non-tariff barriers, and U.S. trading partners’ economic policies that suppress domestic wages and consumption, as indicated by large and persistent annual U.S. goods trade deficits, constitute an unusual and extraordinary threat to the national security and economy of the United States. That threat has its source in whole or substantial part outside the United States in the domestic economic policies of key trading partners and structural imbalances in the global trading system. I hereby declare a national emergency with respect to this threat.”

The rest of the decree (which should be read in full) sets out how this “threat” has come about since 1945 – indeed the decree contains a potted (if one-sided) history of post-war international trade.

In summary the deficits are structural and they have been in place a long time.

In other words: the deficits are usual and ordinary.

Words like “unusual” and “extraordinary” can have wide and expansive meanings.

But – logically – however wide the meaning of a word can be expanded, it (normally) cannot include its own antonym.

Unusual cannot mean usual.

Extraordinary cannot mean ordinary.

But here Trump is formally declaring that the usual and ordinary trading conditions of the United States “constitute an unusual and extraordinary threat to the national security and economy of the United States”.

And that is an unusual and extraordinary thing for a President to do with emergency legislation – or at least it should be.

What Trump is doing is that easy.

Regardless of the constitution expressly stating regulating trade is a matter for Congress, Trump can simply declare an emergency and so take it upon himself to recast the tariff policy of the United States with almost every country in the world.

In any sensible polity, this constitutional expropriation would face instant challenge.

The legislature would instantly check the executive, either by mechanisms within the statute or by repealing the law outright.

The judiciary would also check the executive, by ruling that acts outside the scope of the statute were outside the legal powers of the executive.

These would be the checks that would balance the overall constitution of a polity where the executive misused – abused – power provided to it by legislation.

But in the United States the separation of powers currently means little or nothing, because those powers are aligned.

A Republican majority in both houses of Congress is complemented by a conservative majority on the Supreme Court.

And so, in the current circumstances, the United States may as well not have the separation of powers at all.

Indeed, it may as well not have a written constitution, for all the good it is doing at the moment.

Once rulers get a taste for emergency powers they tend to carry on using them.

And if a polity has a compliant legislature and a deferent judiciary, there is little or nothing that can limit the executive’s use – misuse, abuse – of emergency powers.

What has already happened has been pretty significant – a 1977 Act has been used for Trump to recast the entire trading policy of the United States.

Similarly Trump invoked the Alien Enemies Act of 1798 – even though Congress has not declared any war – and has used it to deport humans to an industrial-sized prison in another country.

The only limits to what Trump and his circle want to do with emergency or wartime legislation seem to be set by their own imaginations.

The extent to which emergency or wartime legislation is already being put is alarming.

And it thereby is not especially alarmist to say that the current presidency may use – misuse, abuse – other emergency and wartime legislation, because they can, and nobody will stop them.

The Prospect article was published before Trump caved a little on tariffs.

Some of the more onerous tariffs were suspended for a period.

But think about this.

Something which was necessary because of “an unusual and extraordinary threat to the national security and economy of the United States” suddenly became unnecessary.

What Trump described in his decree as “an unusual and extraordinary threat to the national security and economy of the United States” had not itself changed – though stock and other market conditions certainly had changed.

Yet suddenly the most onerous of the emergency measures to be rushed into place were not needed.

The most obvious explanation is that what he described as “an unusual and extraordinary threat to the national security and economy of the United States” was not an unusual and extraordinary threat at all.

If it were still such a threat, then he would not have so casually suspended the measures supposedly necessary to meet that threat.

Trump and his circle’s taste for emergency and wartime legislation is a bad thing.

And it can only get worse, despite him caving on some tariffs.

This is not a strong, robust presidency using to the full its designated powers under Article II of the constitution.

This is a presidency taking powers allocated elsewhere in the constitution and misusing and abusing those powers – with the support or forbearance of Congress and the courts.

And this is the real emergency.

***

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How Trump’s tariffs can be a Force Majeure event for some contracts

7th April 2025

And why it depends on what a particular contract says

This morning we said “Hello!” to Force Majeure.

As as the second Trump presidency runs out of constitutional law topics for legal pundits, it now moves onto contract law.

(Soon it will be, no doubt, moving onto insolvency law and civil emergency law.)

The reference to Force Majeure was in this Guardian live blog news item:

The Reuters news report mentioned is here.

That report says:

“Pittsburgh-based Howmet said in the letter to customers that it has declared a force majeure event, a legal practice that allows parties to a contract to avoid their obligations if hit by unavoidable and unpredictable external circumstances.

“Howmet will be excused from supplying any products or services that are impacted by this declared national emergency and/or the tariff executive order,” Howmet wrote in the letter.”

When this news broke, some pundits earnestly opined on whether Trump’s tariffs were indeed a Force Majeure event or not.

But their opinions on this have no weight, unless they have actually seen the Force Majeure clause in the relevant contract (as well as the contract as a whole).

For a Force Majeure event is whatever the parties to a contract agree it to be.

And the consequences of that Force Majeure event is also what the parties to a contract agree it to be.

Some contracts have wide Force Majeure provisions, some have narrow ones, some have none at all (and I have even seen one with two such provisions, contradicting each other, in a Frankenstein monster set of terms and conditions which had been cobbled together by thoughtless copy-and-paste over years).

So let this blog try to explain what Force Majeure means in contract law.

To start with: a contract is the means by which two or more parties agree how a transaction is to be carried out.

Many – perhaps most – contracts are simple: you want to buy a chocolate bar and somebody sells it to you, ownership of the confectionery going one way, and cash going the other.

But as contracts become more complex, the parties agree more provisions: what happens if a party does not pay? what happens if the chocolate bar is not delivered? And so on.

The more important or complicated (or, frankly, expensive) a transaction, the more of these allocations of risk are agreed between the parties.

Until you have pages and pages of clauses and clauses covering various possible situations.

In this way, many contracts do not exist for when a transaction goes well – indeed the terms and conditions are then soon forgotten.

The contract instead exists to regulate the consequences of a contract going badly. The parties – or a court – can then look at what was agreed and say: this is what the parties agreed what would happen in this eventuality.

But.

A contract cannot cover all possible eventualities.

Some events that could affect the ability of a party to carry out their obligations are unforeseeable or outside the reasonable contemplation of the parties

Other events are simply outside the risks which the parties could reasonably allocate in that particular contract.

What then happens if and when such an event occurs?

Well.

Unless the parties have agreed otherwise, the effects of such an external event would be left to general contract law.

In England, that would usually be the aspect of contract law known as Frustration – which really should have this name because it is a frustrating area of law.

In essence, it may be uncertain what will happen when court applies the doctrine of Frustration.

And so the parties in most complex contracts agree not to leave it to the courts, and they instead agree what would happen next in the event of such an event.

These provisions are usually called Force Majeure clauses.

A Force Majeure provision typically is comprised of two parts.

The first part of a Force Majeure provision lists the events what the parties agree would be Force Majeure events. Usually these include “Acts of God” and natural disasters, as well as riots and rebellions, and so on.

But some lists go on to include many possible events outside the control and/or reasonable contemplation of the parties.

(Once when I was acting for HM Treasury I was told – somewhat fairly – by the other party in a contract negotiation that the UK joining the Euro could not be a Force Majeure event as it would be in control of the UK government.)

Sometimes the clause will (also) provide a defintion of what would constitute a Force Majeure event.

The second part of a Force Majeure provision, which is sometimes overlooked in practice, is what then happens in the event of a Force Majeure event.

Sometimes it is that certain specific obligations do not need to be performed, sometimes it is that the entire contract falls away. Badly drafted provisions can inadvertently mean that parties can get away with not paying anything from before the Force Majeure event.

It all depends.

When a lawyer says “it all depends” that lawyer should be able to instantly, if challenged, say what the dependencies are.

And with a Force Majeure clause, it should depend on what the parties have agreed such an event to be, and then what will happen.

In practice there are two common problems when a party seeks to invoke a Force Majeure clause.

The first problem is such clauses are often not properly reviewed before an agreement is signed. This is because such clauses are seen as boilerplate, copied over from on contract to the next, without any proper consideration. “There is a a Force Majeure clause,” it is thought, “no need to actually read it as long as it is there. Next.”

The second problem is such clauses cannot and should not be read in isolation. I have known one case where an attempt to invoke a Force Majeure clause was defeated by the extensive flowery recitals to a contract setting out what the parties did envisage. (Whoopsie.)

Other Force Majeure clauses do not cohere with (and sometimes even contradict) provisions dealing with the effects of termination, and this causes all sorts of problems.

No Force Majeure clause is an island.

And so: can Pittsburgh-based Howmet (or anyone else) declare a Force Majeure event?

Can Howmet be “excused from supplying any products or services that are impacted by this declared national emergency and/or the tariff executive order”?

It depends.

It depends on what the parties agreed would be a Force Majeure event at the time the contract was entered into.

It depends on what the parties agreed what would happen in the event of a Force Majeure event.

It depends on how well drafted the Force Majeure clause is, and how it sits within the contract as a whole.

And it depends on whether this really is a sensible thing for a party to a contract to invoke.

In one way, Trump raising tariffs was an entirely foreseeable event.

It is one thing – maybe the only thing – he has never lied about.

Whether this is enough to release business form their existing contractual obligations will depend on the contract.

But it certainly should be enough to get business anxiously checking their existing contracts.

And who knows, it may mean that parties will put more thought into Force Majeure clauses in future.

***

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Making sense of what is happening in the United States

18th February 2025

How can we make sense, from a constitutionalist perspective, of what is currently going on in the United States?

Perhaps it cannot make sense, perhaps it is senseless – and so there is nothing more to be said.

Or perhaps one day we can look back at what is happening, with glorious hindsight, and see that it makes perfect sense.

Perhaps.

This post, however, is an attempt to make some sense of what is happening, based on currently available information.

First, there is not – yet – a constitutional crisis in the United States, though it seems from the outside that the United States is very close to one.

Yes, there is conflict – but constitutions exist to regulate conflict. It is only a constitutional crisis when a constitution fails to resolve that conflict: when tensions harden to contradictions, which in turn can even prompt civil discontent and even violence.

And yes, there seems to be defiance by the executive of court orders, though the picture here is not clear. There are court skirmishes and filed appeals, and it may be that the apparent defiance is bluster and not reality. It is too soon to tell.

But if the executive branch deliberately and openly (and brazenly) defy the orders of a federal court then, yes, that would be a crisis. It would be a serious contradiction the outcome of which is not clear. Such a crisis may not lead to civil strife, but it would still be an unstable, unpredictable situation.

Second, it would appear that an attempt is being made to avoid Musk having any legal responsibility for what this DOGE entity is doing:

It will be (grimly) fascinating to see how this somewhat desperate tactic works out in court.

One would hope that such a tactic should fail before any objective judge looking at substance of matter, but it may work before partisan Trump appointed judges. ‪

And we should remember that Musk is no legal tactician or strategist, let alone 4D chess player when it comes to the courts.

He got himself in legal knots in his attempt to withdraw from buying Twitter, which he was then legally obliged to purchase:

And he could not even arrange his own pay-rise in the company he actually controls:

This is not masterful legal strategy or tactics, just loudly confident, well-resourced legal blundering.

Curiously Trump is a lot more legally cautious than Musk, and Trump is instinctively good at avoiding (evading) legal responsibility under a general air of plausible deniability.

Yes, he has not always succeeded – and he has criminal and civil findings against him – but these are very few compared to the sheer number of legal threats he has faced in his political and business careers.

Think about how he managed to get out of almost all the cases against him about 6 January 2021 – from impeachments to federal prosecutions.

Think about how he has always avoided personal bankruptcy – despite his many business failures.

One suspects Trump would never have ended up having to buy Twitter against his will because of legal blunders.

This reckless/cautious distinction is one key difference between Musk and Trump.

One suspect that after all this, Trump will deftly survive/avoid the legal consequences of DOGE shenanigans, and Musk and his cronies will not.

Third, the three key legal protections for Trump’s administration may not apply to the civil (not criminal) liability that may be triggered by what DOGE is doing:

- - Presidential pardons do not apply to civil liability – if Musk and others involved with DOGE are sued, no presidential pardon will help them.
  - The recent Supreme Court ruling giving the president a certain immunity from criminal prosecution similarly does not apply to civil matters.
  - Control of the Department of Justice will not help when matters fall to be determined by the federal courts – not all of which are (yet) dominated by Trump appointees.

The civil exposure – from being sued rather than being prosecuted – of those involved in DOGE would seem eye-wateringly high.

All sorts of contractual, proprietary, data and other rights of individuals appear to have been freely disregarded.

And on the face of it, the presidential machine offers no protection from suit from those whose rights have been breached.

No wonder Musk and others are now trying to distance themselves from legal responsibility for DOGE.

And fourth, and to return to an old theme of this blog: the legal form of a constitution – codified, “written” or otherwise – offers no protection in and of itself when key political actors care not for constitutionalism.

(Constitutionalism is when those with political power accord with organising rules and principles despite partisan or personal advantage.)

There is no formal impediment to determined unconstitutional behaviour.

The real problem is how one gets politicians – and voters – to care about constitutionalism.

And that is a problem which has no obvious answer.

***

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The paradox of the Billionaires saying that Court Orders have no value, for without Court Orders there could not be Billionaires

11th February 2025

Those saying that Orders of the Court can be freely defied should be careful what they wish for

Imagine a billionaire, and imagine then their billions being somehow, unlawfully confiscated.

These unlawful confiscations could be in terms of their physical possessions being taken away; or titles to their real property being transferred to someone else; or the transfer away of monies in bank accounts and trust funds; or the titles in intangible property, such as intellectual property rights, being fraudulently assigned; or their contractual entitlements being wrongly nullified; or whatever.

Imagine whatever the species of wealth, it was by some unlawful means no longer to be the wealth of the billionaire.

What is the poor billionaire to do?

The billionaire would contact their lawyers, and the lawyers would then take legal actions; if needs be, the lawyers would apply to the Courts for remedies and sanctions, so that the unlawful confiscations are ceased and desisted from, and the property returned, and so on.

Whatever the species of wealth, there will be some legal means for the billionaire’s lawyers to seek legal redress form a court of competent jurisdiction.

And so in each and every case, the lawyers will be seeking an Order of the Court.

And not only would the lawyers be seeking an Order of the Court, they would be expecting that the Order of the Court would be respected and would be enforced.

The wealth of any billionaire (or of anybody else) is ultimately a bundle of legal rights – in contract, in property, in trusts, and so on.

It is because these rights are enforceable that the wealth exists and accumulates. Unless the legal rights are enforceable, there simply is no wealth.

And any enforceable legal right usually means ready access to an Order of the Court.

But.

If Orders of the Court have no inherent value – that it is open for others to freely disobey the Orders of the Court – then what ultimately depends on Orders of Court becomes suddenly precarious.

Therefore those – billionaires and others – who say that Orders of the Court can be freely defied, on a pick-and-choose basis should be very careful for what they wish for.

For without compliance with Orders of the Court, there cannot be any billionaires.

***

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Why Donald Trump is not really “transactional” but anti-transactional

4th February 2025

A contract lawyer’s perspective on how Trump uses deals and deal-making

Contract law is (for me) the most exciting and satisfying area of law.

(Constitutional law and criminal law and media law are all very interesting in how they regulate real life activity, but only contract law is exhilarating. I once read Patrick Atiyah’s extraordinary Introduction to the Law of Contract in one go on a long plane journey, and the same author’s The Rise and Fall of Freedom of Contract is one of the best intellectual histories ever published.)

And so it is from a contract law perspective that this post looks at the question of whether Donald Trump, the businessman-turned-President, is “transactional” in his political approach.

This is certainly what many pundits are saying:

Are these pundits right?

Has this new conventional wisdom hit upon something?

From a contract law – and contract lawyer’s – perspective, Trump is not “transactional”.

Indeed, he is the opposite of transactional: he is instead anti-transactional.

A transaction is a two-way process, an exchange where a party agrees to do a thing in return for another party agreeing to do a thing.

To use old-style language, a transaction is a bargain, an exchange of promises.

And for the business people concerned in a commercial transaction, that contract has sanctity. So if a party does not comply or even breaches the contract there are remedies which are intended to place the injured party in the position they would have been had the agreement been properly performed. Often these are “money” remedies, but sometimes they can be injunctions or other court orders.

The court will enforce what the parties had agreed, for the agreement is the thing.

But for Trump, the agreement is not the thing.

An agreement is there to be opportunistically repudiated, and not to be performed.

An agreement offers an opportunity to gain leverage, for a new negotiation. for a new exertion of power.

This approach has also been spotted by one acute British observer:

For Trump, notwithstanding his ghost-written book The Art of the Deal, deals are not an art but about artfulness.

For Trump, a hire is only of any use so long as they can then be “fired”.

Transactions are just there for suckers.

There is nothing inherently weak in this anti-transactional approach: and indeed it has proved successful for Trump, both politically and commercially.

And, yes, he does deploy the rhetoric of “the deal”.

But this only makes him transactional in the same way an atheist going on about “God” makes them a Christian. There is instead a positive disbelief in the words and concepts being used.

And so each supposed agreement with Trump is a mere marker for the next use (and abuse) of leverage: few if any transactions will ever be transacted. Things will move on, there will be new exertions of power, and new things demanded.

For Trump, a contract, like Littlefinger’s chaos, is a ladder.

***

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The value of X – making sense of a re-branding, from a lawyer’s perspective

26th July 2023

Much – most – of the commentary about what Elon Musk is doing with the social media platform previously known as Twitter focuses on his personal role and decision-making.

But, as an intellectual exercise, let us de-personalise the matter and see what, if any, sense we can make of the re-branding of that particular platform.

And, for the sake of this post, let us assume the individual heading the platform to have the generic quality Y.

From the perspective of an information technology (IT) and intellectual property (IP) lawyer, a platform like Twitter is comprised of one or more things of value.

Sometimes the platform is rich in IT – there are processes and hardware and software which are distinct and significant and difficult to copy. Sometimes that IT can be protected by patents, or by another form of IP, or it can be a mysterious trade secret. Sometimes that IT is simply on a scale, or is configured in a certain way, that makes hard to impossible to duplicate.

With Twitter, this does not seem to be the case.

The IT for social media platform is not, shall we say, rocket science.

Message boards and micro-blogging are quite common and although Twitter may have many more users than other platforms, the value of Twitter is not really in its IT.

And in their different ways, the Threads platform (which is the property of Meta) and the Mastodon phenomenon (which is largely non-proprietary) show that rivals can produce a Twitter-like experience without the Twitter proprietary IT.

So if it is not the IT then perhaps the value is in the branding, which would be protected by trade marks and other forms of IP.

Even if the technology is commonplace, there would be value in the brand.

Twitter – and its associated words tweet (as a noun) and tweet (as a verb) – is part of the vernacular and popular culture.

The branding is well-known internationally.

A purchaser of or investor in Twitter could disregard and replace the IT completely and still have something of huge value in the brand.

And as long as the user experience was not affected, few would care or indeed notice.

Here Twitter has an advantage: it may not be rich in IT, but it is in IP – at least in respect of branding.

Regardless of the quality of the owner Y, it would be a very strange thing for an acquirer of or investor in Twitter to renounce the brand.

A third thing of value in a business is what can be called generally “goodwill”.

Here the word means the collection of non-tangible (and tangible) things that keeps a business in, well, business.

So a platform which had commonplace IT and, say, unimpressive branding can still be worth buying because of the quality of, for example, its workforce or leadership team, or because of the size and loyalty of its customer or user base or its relationship with advertisers.

Sometimes a company will be acquired just for such assets – regardless of its IT and IP.

Twitter, however, has lost most of its workforce and its leadership team, and many users and advertisers have been alienated.

Users and advertisers are going elsewhere, creating goodwill somewhere else.

To the extent that Twitter users and advertisers have been the focus of attention, it has been as things to exploit for short-term revenue rather than for long-term development.

The above list – IT/IP, branding/IP, and goodwill – is not exhaustive: technology and media companies are bought and sold, or invested in, for all sorts of reasons everyday.

Sometimes such companies, like football clubs, are bought for reasons that make no commercial sense whatsoever.

But when someone purchases or invests in technology and media companies one (or more) of those three things is usually the real target of the transaction.

And so what happens when a platform is purchased for an extraordinarily high amount of money which is (a) IT poor, (b) stripped of its valuable branding, and (c) alienates its users and advertisers?

What actually has been bought?

What is the value of such a company?

Well, now we know.

It is the value of X.

****

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NDAs and the Public Interest – a beginner’s guide for Matt Hancock and others

2nd March 2023

The publication this week by the Daily Telegraph of the WhatsApp messages of Matthew Hancock with several third parties was unusual and striking.

It was so unusual and striking that the first response of many was: surely there must be a law against this sort of thing.

And no doubt Hancock himself thought he was legally protected, having entered into (we are told) a Non Disclosure Agreement (NDA) with Isabel Oakeshott, the ghost writer of his recent book about his experiences as health secretary in dealing with the pandemic.

On available information, it appears the ghost writer has in turn disclosed the messages to the Daily Telegraph, and the newspaper then published a selection of these messages (we are told) without prior notice to Hancock or to any of the third parties with whom Hancock messaged.

The messages are certainly of interest to the public and, given the insights they provide into how government (and the media) dealt with the pandemic – especially in respect of what happened with care homes and testing – the publication of the messages can plausibly be said to be in the public interest.

This post now sets out the general law of England and Wales in respect of NDAs and the public interest, and it then will apply that general law to what appears to be the facts of this incident.

In doing so, I have not had sight of the actual NDA which was signed between Hancock and his ghost writer – and, as will become apparent, a great deal can turn on the terms of a NDA.

For although NDA sounds as if it should be an acronym for a generic thing, there are many ways of framing a NDA.

NDA is not, in and of itself, a legal term of art, but instead a label of convenience.

To understand NDAs you must first understand what it means not to have a NDA.

If there is not a NDA between two parties there will still be the law of confidentiality.

(Technically, confidentiality is not law but what is called “equity”, which is a set of doctrines and rules which complement law, but I hope I may be permitted to call it law for the purposes of this post.)

Confidentiality usually works as follows: person (A) imparts information to person (B) and when that information has (i) the quality of confidentiality and (ii) been imparted so that it is plain that it is considered confidential, the courts will protect that confidential information when they can.

If tests (i) and (ii) are met then person (B) will be bound to keep the information confidential.

This means that if person (B) wrongly discloses that information to another, or misuses the information, then (A) can obtain an injunction against (B).

(A) can also, depending on circumstances, obtain another remedy against (B) such as an “account of profits” of the monies made by (B) in wrongly disclosing or misusing that information.

Generally, the law of confidentiality is about the remedy of injunctions.

This is because injunctions are the supposed means that confidential information can remain confidential: the cork is put back into the bottle.

So given there is already a general law of confidentiality, why do parties have NDAs?

There are many reasons.

First, NDAs can serve to identify and list the information which is confidential, so that there is no need to rely on the general test of whether the information has the quality of confidential information.

Second, the NDA will show beyond serious doubt that the parties were aware that the information was imparted on a confidential basis.

These two reasons supercharge the basic law of confidentiality so that the wronged party can show a court the two tests are met at law.

But there are other reasons why parties may want a NDA.

NDAs can provide the financial terms of the parties: in essence how much is being paid to the parties in respect of the exchange of information.

A strong NDA will also provide the financial consequences of what will happen if a party breaches the NDA, such as an indemnity or damages.

A NDA can also provide for the intellectual property position of the imparted information – for example, whether the receiving party also has a licence to use the information and for what purposes.

But.

Generally NDAs are signed as a ceremonial act of trust between the parties, a rite of passage.

Often people will ask for and sign NDAs without much consideration of their contents, so that they can progress with a commercial or media relationship.

NDAs also often suit both parties as a convenient shield, and a NDA can be used as the complete reason not to disclose something.

NDAs, however, are not magical devices.

They do not, in and of themselves as signed pieces of paper, stop an unwanted disclosure – especially if trust breaks down.

If party (B) wants to breach a NDA then there will often be little that (A) can do to stop them.

This is especially the case if (A) is not given notice of the breach.

For, as set out above, the law of confidentiality is generally about the remedy of an injunction.

And as injunctions are discretionary remedies of the court, they will not usually be granted if the court order would be futile or academic.

It would be too late to put the cork back in the bottle.

So if (A) cannot obtain an injunction to restrain publication or some other wrongful disclosure by B, what is there for (A) to do?

Well.

This will come down to the other terms of the NDA – and often with NDAs there will not be other terms.

Sometimes, especially when it is foreseeable that party (B) will breach the NDA, there can be financial terms that would deter (B) from doing so.

For example, there could be structured payments that would not be payable in the event of any breach.

Or there can be an indemnity against the costs of dealing with the consequences of a breach.

But often the NDA will be silent, for – as set out above – the NDA is usually a convenient shield or a ceremonial ornament.

And now we come to the public interest.

Even if (A) has been given notice of an imminent breach, if (B) pleads the public interest, then the court may not give (A) an injunction.

All (A) would then have, if they have been careful, would be other terms of the NDA.

The legal position was recently summarised by a judge:

“The modern (i.e. post-[Human Rights Act 1998]) approach as to the public interest defence is set out in the Court of Appeal’s judgment in Associated Newspapers Limited v HRH Prince of Wales […].

“The four main tenets can be summarised as follows:

“(1) There is an important public interest in the observance of duties of confidence since those who engage employees, or who enter into other relationships that carry with them a duty of confidence, ought to be able to be confident that they can disclose, without risk of wider publication, information that it is legitimate for them to wish to keep confidential (ibid at [67]).

“(2) The modern approach as to the circumstances in which the public interest in publication can be said to override a duty of confidence is whether a fetter of the right of freedom of expression is, in the particular circumstances, “necessary in a democratic society”. The test is one of proportionality: the court will need to consider whether, having regard to the nature of the information and all the relevant circumstances, it is legitimate for the owner of the information to seek to keep it confidential or whether it is in the public interest that the information should be made public (ibid at [67]).

“(3) It is arguable that a duty of confidentiality that has been expressly assumed under contract carries more weight, when balanced against the restriction of the right of freedom of expression, than a duty of confidentiality that is not buttressed by express agreement; but the extent to which a contract adds to the weight of duty of confidence arising out of a confidential relationship will depend upon the facts of the individual case (ibid at [69] citing Campbell v Frisbee [2003] ICR 141).

“(4) Thus, in essence, the Court must consider whether, having regard to the nature of the information and all the relevant circumstances, it is legitimate for the owner of the information to seek to keep it confidential or whether it is in the public interest that the information should be made public.”

Applying these four tests in the instant case, Hancock would say that as the messages had been disclosed to the ghost writer under a contract, this “carries more weight, when balanced against the restriction of the right of freedom of expression, than a duty of confidentiality that is not buttressed by express agreement”.

Hancock would also say there was an “important public interest in the observance of duties of confidence since those […] who enter into other relationships that carry with them a duty of confidence, ought to be able to be confident that they can disclose, without risk of wider publication, information that it is legitimate for them to wish to keep confidential”.

But.

The ghost writer would say “having regard to the nature of the information and all the relevant circumstances […] it is in the public interest that the information should be made public”.

Here the ghost writer would also be able to point to the material being supplied for a book on the pandemic, as well as to the contents of the messages.

The Daily Telegraph did not sign the NDA and so would not be bound by its terms.

Hancock’s remedies, if any, against the Daily Telegraph would be under the general law of confidentiality, or perhaps under the law of misuse of private information, data protection law, or even copyright.

But whichever way he framed the claim, he would face (in some form) a public interest defence.

The position of third parties with whom Hancock messaged, however, may be stronger.

And one expects the Daily Telegraph legal team has been very careful in respect of third party information it is disclosing from the messages.

The Daily Telegraph must have had very bullish and robust legal advice on the public interest.

They also felt confident enough in their public interest defence not to give Hancock notice of publication.

Hancock is today quoted as saying:

“There is absolutely no public interest case for this huge breach. All the materials for the book have already been made available to the inquiry, which is the right, and only, place for everything to be considered properly and the right lessons to be learned. As we have seen, releasing them in this way gives a partial, biased account to suit an anti-lockdown agenda.”

If Hancock sincerely believes that there is absolutely no public interest defence then presumably there is no bar to him seeking some form of legal remedy against either the ghost writer or the newspaper – for example to restrain publication of messages so far unpublished.

He could even seek to obtain an account of profits from the ghost writer or the newspaper if he believes they are acting uncocionably.

So far it appears that he may not take legal action, he also has said today (emphasis added):

“I will respond to the substance in the appropriate place, at the inquiry, so that we can properly learn all the lessons based on a full and objective understanding of what happened in the pandemic, and why.”

If he believes that, one may wonder why he published a book seeking to give his side of what happened before the inquiry.

NDAs are usually ornaments or shields.

Unless they are tightly drafted and prudently structured, they offer little protection in practice to an imparting party if the other party deliberately breaches the NDA without notice.

As such NDAs are often articles of trust.

And here is the paradox: given NDAs often depend on trust, they usually are not needed, and if there is lack of trust, then the NDA can make little difference.

On the available information, Hancock was naive to believe a NDA would give firm, still less absolute, protection against onward disclosure of the messages.

And on the available information, there does appear to be a public interest in disclosure to the public of the messages – at least to the extent that they show public policy making and implementation in action.

As Hancock himself has published a book which has been described as misleading based on the same material, then he may struggle to get redress in respect disclosures which expose his own misleading account.

We do not know what were the terms of the NDA – and so we cannot pass comment on whether the NDA was well drafted for its purpose or not.

But we can evaluate the wisdom of Hancock in thinking any NDA, on any terms, would protect him against onward disclosure of the messages by a counter-party willing to breach the NDA on the basis of the public interest.

It was a daft thing for him to do.

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Artificial Intelligence and how it will affect commercial lawyering (and legal blogging)

17th January 2023

Here is a thought:

imagine a ChatGPT browser extension that reads the Terms and Conditions agreement and flags anything that is non-standard

— Patrick Hsu (@pdhsu) January 16, 2023

Or, to perhaps put it another way: could Artificial Intelligence replicate, or even replace, the work of your normal contracts lawyer?

As someone who has spent over twenty years as a commercial lawyer (constitutional law is my interest, and contracts law my drudgery) I would say the answer is yes, and no, and but.

And as a coda, I will aver that those of us who write and comment on legal blogs may face a problem too.

Yes

The yes is a recognition that a certain amount of contracts law in practice is ploddery.

You have a standard form contract, and you read every clause, and you put all the clauses together.

Many standard clauses are what is called boilerplate – their effect, and often their very wording, are identical from one contract to another.

And even clauses which can vary from one standard from to another – payment arrangements, service levels, and key allocations of risk – do not vary very much.

In larger law firms, the task of reviewing, and even drafting, such contracts is given to junior lawyers, even trainees.

Many non-legally qualified contracts managers and procurement officers are better than many commercial lawyers in dealing with straightforward commercial contracts.

And so just as a text comparison program can identify differences between contracts better than almost any human, then a computer which has a bank of hundreds, if not thousands, of standard contracts would be able to identify standard and deviant clauses.

Such a computer may even be able to propose amendments to the deviant clauses so as to place the contract onto a more standard basis.

So, yes, some straightforward contracts reviews could be done by Artificial Intelligence.

Standard form contracts are subject to special legal rules in case law and statute, especially when they are for business-to-consumer transactions, and so a store of contracts would not enough: external legal expertise can be necessary.

And being able to advise a client on whether a standard form contract will be in their commercial interests or not is not something Artificial Intelligence is likely to be able to do soon.

That is because assessing commercial risk in a particular situation is not a form of abstract calculus, for it requires an understanding of industry, business, economic, social and human factors.

And, of course, not all commercial contracts are on standard forms.

Certain transactions require bespoke contracts, dealing with the allocations of risk of a range of things that could go wrong.

In IT and media contracts, for example, there often needs to be an understanding of technological risks so that the legal risk allocations match and mirror what problems can happen in practice.

A well-drafted and hard-negotiated bespoke commercial contract is as much a work of cooperation, conflict and collective endeavour as you will find anywhere else in human activity.

But

There is a problem.

The good lawyers who can advise on standard and bespoke contracts can do so because of their apprenticeship in dealing with straightforward clauses in everyday contracts.

You do not have child prodigies in practical law: a practice takes, well, a lot of practice.

One reason for this is that contracts are not linear documents but complex instruments: each clause can and should relate to other clauses.

And the only way to master complex instruments is to understand how the elements of that instruments all fit (or do not fit) together in given practical situations.

(I have said before that legal drafting is akin to coding in making sure lines all work together.)

This means that if Artificial Intelligence replicates and then replaces the work of junior contract lawyers it is difficult to see how senior contract lawyers will gain their necessary experience.

Coda

Perhaps a better route for Artificial Intelligence would be to replicate and then replace the work of legal bloggers and their commenters.

Perhaps the blogpost above was written by Artificial Intelligence, and perhaps also some of the comments below will be too.

If so, then Artificial Intelligence can merrily create blogposts and comments, rendering us all redundant.

Brace brace.

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Law vs Lore

8th December 2022

When I decided to start a Substack I also had to decide what to call it.

I could not call it “law and policy” as that is the name of this blog.

Dear old folkloric wizard “Jack of Kent” is safely dead and buried.

And so I settled on “law and lore” as that put together two things which not only interest me but also are more closely connected than many people realise.

Let me explain.

Many of those reading this blog will not be lawyers and so have had little need to look up the raw black-letter texts of the law – in statutes, case reports and elsewhere.

Even those of you with the unfortunate affliction of being a lawyer, will not always have read the black-letter texts of every law about which you will have a view or an understanding.

And in society generally, a great deal of the law in practice is what people believe it to be – or should be.

“You cannot do that.”

“I cannot do that.”

“That is not allowed.”

“I have my rights.”

“Technically you are not allowed to do this.”

“Technically if you do this you don’t break a law.”

And so on.

Entire areas of law are, in practice, mini belief systems where people are confident about what the law is, free from ever looking it up: data protection, health and safety, consumer rights, Magna Carta.

And on the political plane, belief is (or was) a great deal of our uncodified convention: a general sense of balance and self-restraint.

This all fascinates me.

I have often wondered what an alien looking down would work out about our laws and legal system just by watching what people do and do not do.

Would such a Martian’s account correspond to what our legal texts say about the law?

And so my view is that to understand law in practice, one has to have an understanding of lore, which I see is helpfully defined online as “a body of traditions and knowledge on a subject or held by a particular group, typically passed from person to person by word of mouth”.

This is not to say that it is consciously invented: those with strong opinions about the law usually believe that they are actually correct.

Sometimes there is a close relationship between law and lore – in, for example, mercantile law, the practices of business folk often give rise to enforceable legal obligations.

And sometimes there are stark discrepancies: for example, data protection in practice often has no relationship with data protection as set out in law.

I would like to explore this distinction between law and lore more in future posts in particular areas.

Let me know if you have any ideas for subjects of such posts.

***

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A government should not be able to deprive people of possessions and property by mere ministerial diktat

3rd March 2022

Yesterday’s short post turned out to be rather popular, with a number of informed and insightful comments.

(Perhaps that is a hint that I should keep these blogposts succinct!)

The question puzzling me today is whether those clamouring for United Kingdom sanctions against oligarchs realise that it is not a good thing for the government to have summary powers to deprive individuals of possessions and other property.

When the government uses summary powers, say, to deport members of the Windrush generation, or to remove a person’s British citizenship, then liberal rightly are concerned.

Individuals have rights, and there are things no person or group may do to them, without violating their rights.

And if all individuals have rights, and oligarchs are individuals, then it follows that oligarchs have rights.

These rights may not be absolute – and property rights especially can be subject to interferences by the state.

But such interferences need to have a lawful and reasonable basis and follow due process.

And this is the same for oligarchs, as it is for anyone else.

That the government cannot just deprive people of possessions and property by mere ministerial diktat is not a bad thing in a liberal society.

And those who clap and cheer at the prospect of possessions and property being taken by the state without any lawful and reasonable basis, and without due process, should be careful what they wish for.

******

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Comments are welcome, but they are pre-moderated and comments will not be published if irksome.