Civil Code 1671(b) provides in pertinent part: "...a provision in a contract
liquidating the damages for the breach of the contract is valid unless the party seeking to invalidate the provision establishes that the provision was unreasonable under the circumstances existing at the time the contract was made."
As can be seen from the code section, using a liquidated damages clause in an NDA opens the door to an argument over whether or not the amount of damages was "unreasonable under the circumstance existing at the time the contract was made."
Since no one typically uses liquidated damages language in a California NDA, it doesn't seem particularly useful, except as a means of scaring the other party into staying clear of a breach of contract. So, I don't know that I would necessarily take the language out. I would simply want the UTSA language "in."
FYI: I'm a California lawyer, if it makes any difference to you.
Hope this helps.
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