contract-law
Are financial penalties common in job offers?
<p>I am in the EU and I recently got a job offer for a remote role from a games developing startup. A service provider agreement will facilitate the role. The contract however is full of very high financial penalties(tens of thousands of euros) on several breaches (of confidentiality or non competition f.e.). It also says that I will be liable to the full amount of any damage caused intentionally or due to gross negligence. Is this a common practice? I have worked on big corporations and I have never faced such clauses. Can this be a scam of any kind?</p>
<p>Please note the role is not for a manager/director level but rather for a base software developer level. Also the clauses are very generic and I do not have idea how these can materialize f.e. how can the company loose money so I can be liable for it.</p>

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<blockquote>
<p>The contract however is full of very high financial penalties(tens of
thousands of euros) on several breaches (of confidentiality or non
competition f.e.).</p>
</blockquote>
<p>I routinely write non-competition and non-disclosure agreements with such clauses, and see them in contracts written by others. They are called liquidated damages clauses and reflect the fact that proof of actual economic damages from a breach of confidentiality or prohibited competitive acts are difficult or impossible to prove.</p>
<p>This isn't particularly uncommon.</p>
<blockquote>
<p>It also says that I will be liable to the full amount of any damage
caused intentionally or due to gross negligence.</p>
</blockquote>
<p>This sounds like the term may actually benefit you. The default rule is that you are liable for the full amount of any damage caused by your acts which are negligent, grossly negligent, reckless, intentional, or in bad faith. This clause seems to be exonerating you from liability for simple negligence.</p>
