Contract Management: From Business Controller to Business Enabler

Deal Key Meaning Contract Hot Deals Or AgreementTim Cummins, President & CEO of  the International Association for Contract & Commercial Management, discusses the ongoing evolution of commercial contract management in a podcast posted by Determine Inc.

He says the future of contracts will be far more versatile and adaptive, with technology and dynamic processes driving the way organizations structure.

He has seen a dramatic increase in senior executive interest and awareness of the potential that contracting holds. More and more organizations are recognizing that misalignment is stunting their ability to be flexible, agile and creative, Determine says on its website.

Listen to the podcast.

 

 

 




When Smart Contracts are Outsmarted: The Parity Wallet “Freeze” and Software Liability in the Internet of Value

The recent Parity wallet “freeze” provides yet another example of a coding vulnerability in a smart contract (rather than a flaw in the underlying blockchain or cryptography) resulting in an exploit that compromises cryptocurrency worth millions, according to Proskauer Rose LLP’s Blockchain and the Law.

Wai Choy and Pengtao Teng write: “It again highlights some of the pitfalls of insecure code in the context of digital assets and raises questions regarding the extent to which software developers can be held liable to its users for losses suffered due to those oversights. As blockchain-related software that serve as storage vaults for digital assets continue to proliferate, it will be interesting to see how industry standards and the existing software liability regime in the U.S. and other jurisdictions evolve to reflect the critical role of secure software in the ‘Internet of Value.'”

Read the article.

 

 




The Eighth Circuit Raises the Bar for Would-Be Indemnitees

The U.S. Court of Appeals for the Eighth Circuit issued an order dealing with indemnification for prior settlements, and it could have a hugely beneficial impact on potential indemnitors, including sellers of mortgage loans as well as insurers, reports Bilzin Sumberg in its Mortgage Crisis & Financial Services Watch.

The appellate court affirmed a lower court’s ruling that, when an insured seeks indemnification for settlements that encompassed both covered and non-covered claims, the insured must present sufficient evidence to establish with reasonable certainty the value that the settling parties attributed to the covered claims, explain Philip R. Stein and Shalia M. Sakona.

They discuss the background of the case, the limitations on using expert testimony to establish allocation, and the application of the holding to the mortgage industry.

Read the article.

 

 




Is Your Service Contract Protecting Your Company? 9 Essential Clauses that Limit Fallout Damage

Gabriela Smith, writing for Nearshore Americas, discusses several key standard clauses that should be included to make a contract strong and reliable.

“As lawyers, we constantly encounter less than ideal scenarios day in and day out when parties – for whatever their reasons – fail to sign a good contract, or even sign a contract at all,” she writes. “However, having a good service contract that is tailored to the particular situation can be one of the best decisions that a company can make.”

She discusses recitals, payment terms and timing, commissions, law and venue, work product, confidential information, termination, assignment, and modification and amendment.

Read the article.

 

 

 




Appellate Court Tosses $2.9M Judgment in Breach of Contract Case

Houston civil trial lawyer John H. Kim, founder of The Kim Law Firm, and attorney Tim Rothberg persuaded a Texas appeals court to drop a $2.9 million judgment against energy clients High Cotton Holdings LLC and Ranger O&G Operating LLC last week, according to a post on the website of Androvett Legal Media and Marketing.

The Texas 4th Court of Appeals in San Antonio found that the lawyer retained by the two energy companies prior to The Kim Law Firm filed an agreement in a breach of contract lawsuit without signing it, and failed to keep the companies apprised of court events. Due to those actions, both High Cotton and Ranger were not served with the complaint or made aware of the $2.9 million default judgment.

The 4th Court of Appeals reversed and rendered the judgments and remanded the case to state court for trial on the merits.

Read the article.

 

 




Webinar: Contractors and the New Era of Cyber Compliance

Washington Technology will present a complimentary webinar on Jan. 25, 2018, to discuss new compliance requirements for securing government data contractor networks. The webinar will begin at 2 p.m. Eastern time.

Speakers for the one-hour event will be Ron Ross of NIST; Maria Proestou, CEO of Delta Resources; and Susan Cassidy, partner, Covington & Burling.

Government and industry experts will:

  • Offer advice and guidance on what contractors should be doing to ensure compliance.
  • Provide insights on best practices in areas such as training, risk management and planning for in the future.
  • Help to prepare attendees for meeting this requirement and maintaining compliance for their government customers.

Register for the webinar.

 

 




Earning Trust in Contract Negotiations

Dennis Garcia, an assistant attorney general of Microsoft Corp., offers a collection of best practices that all lawyers can embrace to help earn trust during the contract lifecycle.

“In our rapidly changing and highly competitive legal and business environments, earning trust is more important than ever—especially during contract negotiations as that may be the first opportunity for parties to work with each other,” Garcia writes for Bloomberg Law.

He discusses several practices under the headings: actively learn about the other party, be empathetic, provide thoughtful rationales on contract issues, meet face-to-face, embrace smart risk-taking, don’t over-lawyer, little things mean a lot, small and empowered negotiating teams, always keep your cool, and post-contract signing.

Read the article.

 

 




International HR – Offer Letters and Employment Contracts

When a U.S. company decides to hire an employee in another country, the question of whether to send the applicant an offer letter inevitably arises, writes Samina Weil in the Fisher Phillips Cross Border Employer Blog.

“Sending an offer letter prior to the final contract is normal practice in the US. But this is not the case in other jurisdictions, and for good reason,” she explains.

She describes how some U.S. employment practices differ from those in foreign jurisdictions and how to approach the problems those differences can cause.

“Do not be tempted to send an offer letter (or seek legal advice before doing so), but have a contract drawn up for the position for which you are hiring and personalize it to the individual you want to hire,” she warns.

Read the article.

 

 




Defend, Indemnify, Hold Harmless – What This Contract Language Means for A/E Professionals

J. Brandon Sieg of Vandeventer Black LLP addresses the question of what is meant when a contract requires an architect or engineer to “defend, indemnify, and hold harmless” the project owner for specific (or not so specific) types of claims that might arise in the future.

Regarding duty to defend, he explains that: “If you agree to similar language in your design contract, then you are agreeing to hire the project owner’s lawyer to defend a lawsuit filed against the project owner.”

He also covers responsibilities that go with indemnification and “hold harmless.”

Read the article.

 

 

 




Vendor Risk Management as Applied to Fintech Contracts

Regulatory compliance is an area of fundamental concern – not only for strategic investors – but also for financial institutions contracting for services from financial technology providers, warns Adam Chernichaw, a partner in the New York office of White & Case.

“Where a financial institution classifies a product or service being procured as an ‘outsourcing,’ its vendor risk management (VRM) function will carefully scrutinise the proposed relationship,” Chernichaw writes. “The VRM function will usually take the position that regulators will look at the service provider as an extension of the institution. Accordingly, the institution is required to impose contractual obligations on the provider so that the provider acts as the institution itself would act when it comes to compliance.”

In his article he emphasizes the importance of parties to align on the contractual VRM requirements that will be sought by the financial institution, and whether the fintech provider can meet those obligations.

Read the article.

 

 

 




Choice of Venue Provision Upheld in Employment Contract

Employment contractForum selection clauses that are not adhesive will be interpreted independently of the court’s determination of the enforceability and validity of the contract as a whole, according to a post in Baker Sterchi Cowden & Rice’s Employment Law Blog.

Robert Chandler discussed the case of Reed v. The Reilly Company, LLC, in which the plaintiff, terminated by the Reilly Co., brought claims in Missouri. Reilly moved to dismiss, based on a contract provision stating that disputes must be brought in Kansas.

“Parties drafting forum selection clauses should exercise care to avoid contracts that are adhesive – i.e. agreements reached without a realistic opportunity for bargaining – and to choose forums which will be considered “neutral” and not overly advantageous to the party drafting the agreement,” Chandler explains.

Read the article.

 

 




The Importance of Attention to Risk Allocation Provisions in Contracts

A recent Indiana Court of Appeals decision illustrates the importance of having an overall risk allocation strategy in contracts where appropriate, and paying close attention to the language used to express that strategy, writes Christian Jones of Barnes & Thornburg.

In the post on the firm BT Policyholder Protection Blog, Jones writes that this is particularly when multiple contracts and parties are involved.

“This case illustrates the difficulty of coordinating risk allocation language across multiple contracts. [The insurer] might have attempted to pursue subrogation claims under any circumstances, but it seems possible that litigation might have been avoided if all of the contracts at issue had contained their own express waiver of subrogation clauses” Jones explains.

Read the article.

 

 




A Case Against One-Size-Fits-All Construction Contracts

Construction design planningForm documents published by the American Institute of Architects can sometimes be a one-size-fits-all approach often does not adequately protect the developer when issues arise on a construction project, according to a post on the website of King & Spalding.

Robert B. Garner and Peter A. Berg write that of the biggest problems a developer faces in using the AIA forms is selecting the proper form for its project.

“One of the biggest problems a developer faces in using the AIA forms is selecting the proper form for its project,” they explain.

“Without careful thought and modification to standard forms, developers can find themselves in a difficult position in a delayed and over-budget project, even if developers signed a contract with a ‘guaranteed maximum price.’ Project development requires detailed attention to all aspects of your latest construction agreement,” the authors write.

Read the article.

 

 

 




Download: The State of E-Signature Implementation

Esignature - contract -signingeSignLive by Vasco has made available a new report: “Forrester Report: The State Of E-Signature Implementation: Twenty-Five E-Signature Use Cases Show Adoption Trends,” which can be downloaded from the eSignLive website at no charge.

The Forrester Report examines 25 e-signature implementations across the United States and Europe with use cases for receivables, payables, various contracts, onboarding agreements, and travel bookings – uncovering trends in adoption, authentication, and business results.

The report covers:

  • The average implementation time for e signature projects
  • Reported ROI metrics from each project
  • Top challenges, from browser compatibility to user training
  • How solution flexibility mitigates complexity
  • Biometric authentication trends
  • Innovation in mobile signing

Download the report.

 

 

 

 




Software License Checklist for Licensees: 20 Issues to Consider

When entering into licenses for commercially available, off-the-shelf software products, it is common to use the “vendor’s paper” for contracting, according to a post on Morgan, Lewis & Bockius LLP’s Tech & Sourcing blog.

“Using the vendor’s paper does not mean that the contract shouldn’t be reviewed and negotiated to ensure that key issues are addressed,” point out Barbara Murphy and Eric J. Pennesi.

In part 1 of the article, they discuss license types, use within the enterprise and by third parties, divestitures and acquisitions, nonproduction use, the right to relocate or change users, use outside the United States, the obligation to support, rights to successor products, payments and escalators for renewal terms.

A link on the article takes the reader to part 2 of the discussion.

Read the article.

 

 




Third-Party Risk Management: Aligning Supplier Onboarding to Contract Onboarding

Determine, SIG and Protiviti have posted an on-demand webinar discussing best practices for initiating third-party risk efforts by improving the integration of supplier onboarding and contract management.

Organizations of all sizes and industries are wrestling with how to improve third-party risk management efforts, Determine says on its website. The challenge often comes from a disconnect between processes that are spread out among a wide number of stakeholders; supplier due diligence, ensuring contract compliance, monitoring, renewing or even terminating supplier relationships.

By aligning processes and technology for quick adoption, you’ll have the ability to easily connect the dots between suppliers and contracts and procurement processes, the presenters say.

Topics include:

  • Looking at issues around transition from onboarding to contract award
  • Addressing the challenges of defining a “contract owner”
  • Improving supplier and contract visibility in an environment of constant change
  • Preventing the onboarding of suppliers with expired certifications, or the renewal of contracts with non-performing suppliers

Watch the on-demand webinar.

 

 




Keep SaaS And Cloud Contracts Light On Specifics, But Heavy On Revenue Opportunities

Solution providers shouldn’t let long, tedious contracts get in the way of closing deals, advised lawyer Mark D. Grossman when he spoke at the Ingram Micro One conference.

His advise was aimed at users of SLAs, or service level agreements, for cloud-based processes.

CRN reports that Grossman said solution providers should design a “cookie-cutter” contract – one that can be used with multiple clients with little modification – to make the sales process much shorter.

Reporter Joseph F. Kovar writes that Grossman said the key to that is to keep as much of the contract as ambiguous as possible. “None of this is unethical or immoral,” he said. “Everything is agreed to … I want to help you close deals. Don’t get bogged down in legal terms.”

Read the article.

 

 




Drafting Matters: Do Your Non-Competes Bind the Correct Parties?

A federal court in Colorado recently upheld a franchisor’s non-competition provision despite that state’s strong public policy against non-competes, reports Alexander S. Radus on Fox Rothschild’s Franchise Law Update.

“The franchisor prevailed due to its thoughtful contract drafting and ability to effectively communicate the unique nature of franchising to the court,” Radus writes.

In the article, he describes the case and concludes that the decision illustrates why franchisors should ensure that their franchisees’ owners and key employees, especially those with access to confidential materials and training, sign non-competes in their individual capacities.

Read the article.

 

 




Assignment and Delegation in Contracts: Not Just Boilerplate

Although an assignment and delegation provision is often placed in the “miscellaneous” or “general” sections of commercial contracts, it should not be thought of as standard “boilerplate” language that never changes, according to the Tech & Sourcing blog at Morgan Lewis.

Authors Peter M. Watt-Morse and Christopher C. Archer provide an overview of some of the key issues that should be considered when drafting an assignment provision for commercial and technology agreements.

Some of the specific topics include “yes or no to assignment,” “assignment of entire contract vs. individual rights and obligation,” “notice and consent,” and “impermissible transfers.”

Read the article.

 

 




Is Non-Compete in Purchase/Sale of Family-Owned Business Enforceable?

Courts will generally enforce a non-compete agreement negotiated as part of a business sale as long as it is reasonable in geographic scope and duration, writes Michael P. Connolly in the Murtha Cullina Family Business Perspectives blog.

“What is reasonable will depend on factors such as the type of business being purchased, the pre-sale geographic reach of the business, and the consideration paid for the restriction on the seller’s future competition,” he explains. “Parties to a non-compete should therefore carefully consider these factors when drafting the agreement. The parties also should carefully define what type of ‘competitive’ conduct will be restricted.”

Connolly discusses the case of E.T. Products, LLC v. D.E. Miller Holdings, Inc., in which the United States Court of Appeals for the Seventh Circuit recently addressed the enforceability of non-compete agreements that had been negotiated in connection with a sale of a business.

Read the article.