Pete Davidson’s NDA
Reports indicate that Pete Davidson, the famed SNL comedian, recently forced attendees at his show to sign a non-disclosure agreement (NDA). The NDA states that attendees “shall not give any interviews, offer any opinions or critiques, or otherwise participate by any means or in any form whatsoever (including but not limited to blogs, Twitter, Facebook, Instagram or any other social networking)” related to Davidson’s performance. Violating the NDA would result in damages in excess of 1 Million dollars.
Is the NDA Enforceable?
So if an attendee were to violate the NDA by posting an opinion or critique on social media would they be liable to Pete Davidson? Most likely not. An NDA is a contract and therefore follows the general rules of contract law. Subsequently, simply because an NDA provides a provision does not necessarily make it valid in a court of law. Hypothetically, if Pete Davidson were to sue an attendee of his show, the attendee can most likely hold the NDA invalid because of lack of consideration for signing the NDA with no meaningful choice.
No Consideration For the NDA
In order to be a legally binding agreement, a contract needs to have consideration. Consideration is a benefit which is bargained for/ negotiated between the parties. It can be a payment or a promise to do something in return. Here, while the payment to see the show might be consideration, such consideration is limited to Pete Davidson’s performance only. That is, the attendee is agreeing to pay for Davidson’s performance — not for any proprietary information that Davidson may decide to reveal.
Let’s dig in a little deeper.
Conventionally, in relation to an NDA, consideration/ benefit of disclosure by one party and the promise not to disclose the information is enough to form a binding agreement. This is because the benefit of learning someone’s proprietary information is negotiated by a promise of non-disclosure. In other cases, a monetary value is paid as consideration in return of the other party’s promise of non-disclosure.
However, here, the ticket holder is paying Davidson and in return Davidson is performing the show. The act of paying and promise to perform is the benefit bargained for between the parties, and therefore this forms a binding agreement. The attendee has received no benefit to keep the information secret. Particularly, when the attendee paid for the ticket they had no expectation of receiving proprietary information from Davidson. Davidson was free to choose the content of his performance on his own volition and free will.
No Meaningful Choice
Now, Davidson would most likely argue that he had offered a refund to anyone who refused to sign the NDA. He would argue that once he informed attendees his intention to disclose proprietary information, there acceptance of receiving such information is consideration for the NDA.
Such a defense can only be valid if Davidson had mentioned the terms of the NDA at the time of selling the ticket — customers could have made an informed decision. However, based on the comments on Facebook, attendees received an email related to the NDA only an hour before the concert. Reasonably, this is not enough time for the ticket holder to make a meaningful informed decision. Most likely, people were already on their way to see the show and learned about the NDA while entering the premises. Realistically, they did not have a choice to deny the terms of the NDA while they already took the effort of going to see the show. Furthermore, there is no indication that Davidson offered any compensation for the attendee’s loss of time, travel expenses, etc. had they refused to sign the NDA.
Thus, at least from a text book perspective, this is a case of an unenforceable NDA.