Stormy Daniels Settlement Agreement Raises Fascinating Remedies and Contracts Issues, in Addition to Election Law Issues

I’ve noted the potential campaign finance issues in potential hush money paid to porn star Stormy Daniels via Donald Trump’s lawyer Michael Cohen. There may be issues of excessive in-kind campaign contributions, or failure on Trump’s part to disclose a campaign expenditure.

But now Daniels has sued Trump and Cohen for a declaratory judgment declaring the contract is not valid or unenforceable. The complaint includes a copy of the original contract and side agreement. Among the issues I spot:

  1. The contract bars Daniels from releasing pictures, texts, or other information about the Trump affair. It includes a $1 million dollar per disclosed ITEM liquidated damages provision. This means that this is an automatic amount, rather than the calculation of damages, although the contract ALSO allows disgorgement of profits AND injunctive relief. Big questions here as to whether such a liquidated damages provision is legal under CA law (there’s a choice of law question here too), as a reasonable approximation of actual damages and not unconscionable.
  2. According to the complaint, the document was never signed by Trump, but the parties otherwise seemed to perform under the contract, including the delivery of money. Does this part performance save the contract? If it created an implied contract by conduct, which provisions are in the contract? Does it include the arbitration provision?
  3. Given the arbitration provision, does the court or the arbitrator get to rule on these motions? If the court kicks the matter to arbitration, some or all of the proceedings may not be available to the public.
Share

Comments are closed.