Are Secret Agreements Enforceable in Florida Real Estate Deals?

– Florida law looks to section 542.335 of the Florida Statutes to determine the enforceability of restrictive covenants, including confidentiality agreements.
– The party seeking to enforce the restrictive covenant must prove each element of their cause of action by a preponderance of the evidence.
– In order to pursue a claim for breach of contract, the plaintiff must establish a valid contract, a material breach, and damages.
– The recent Rauch appellate court decision sets forth the boundaries of enforceability for confidentiality agreements in real estate transactions and brokerage agreements in Florida. – The confidentiality agreement in the Rauch case was considered a restrictive covenant under Florida law.
– The purchaser did not breach the confidentiality agreement because she did not disclose any confidential information.
– The court determined that the confidentiality agreement was indefinite in time, but used its authority to narrow the provision to the length of the listing agreement, finding no violation occurred. – The appellate court held that the trial court properly relied on section 542.335 in its decision.
– The original broker failed to meet its initial burden of proof that the restriction was reasonably necessary.
– The Court held that statutory requirements for restrictive covenants are essential elements, not affirmative defenses.
– The Rauch decision limits the use of confidentiality agreements and other restrictive covenants in real estate transactions.
– It establishes that the statutory requirements are essential elements of a claim for breach of the covenant.
– The party seeking to uphold or enforce the restrictive covenant is responsible for pleading and proving these elements.
– Florida courts will construe these restrictive covenants to be the least restrictive as possible.
– The Rauch decision emphasizes the need to consult an experienced attorney when incorporating a confidentiality agreement or other restrictive covenant into a transaction.

https://www.jimersonfirm.com/blog/2021/10/confidentiality-agreements-restrictive-covenants-enforceable-florida-real-estate-transactions/