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.

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.

In an article for Bloomberg Big Law Business, Wiley Rein LLP’s Kirk Nahra details the top-10 U.S. and international developments in 2018 that companies must be aware of to ensure an effective information security program.

Nahra writes that “it is clear that privacy and data security has moved from an issue impacting primarily healthcare and financial services companies, to an issue that affects, in large and small ways, virtually every company across the globe. These issues affect litigation, mergers and acquisitions, product development, research, corporate strategy, business partnerships, and, in some way most activities of most companies.”

His article covers the European Union’s new General Data Protection Regulation, Privacy Shield and other data transfer obligations, non-EU data transfer programs, cybersecurity, breach litigation, FTC and Office for Civil Rights enforcement, and the role of the states.

Read the Bloomberg article.

Fortune is reporting that Southwest Airlines agreed to pay $15 million to settle nationwide antitrust litigation by passengers who accused the four largest U.S. carriers of conspiring to raise fares by reducing seating capacity.

The Dallas-based carrier denied wrongdoing but said it settled to avoid the cost and distraction of further litigation.

The remaining defendants, including American Airlines Group, Delta Air Lines and United Continental Holdings, have not settled.

The report says Southwest agreed to help plaintiffs with their suit against the other three.

Read the Fortune article.

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.

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.

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.

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.

Reed Smith LLP will present a webinar offering a look back on celebrity data discovery law in 2017 and how it affects you and your organization.

The one-hour complimentary event will be Thursday, Dec. 14, 2017, at 2 p.m. Eastern time.

Presenters will be U.S. Chief District Judge Joy Flowers Conti (W.D. Pa.), e-discovery authority and Reed Smith partner David Cohen, noted entertainment lawyer Michael Kump of Kinsella Weitzman Iser Kump & Aldisert, and join Relativity’s David Horrigan.

Objectives are:

• What you should—and should not—do if you or your client suddenly become a news or social media celebrity
• Understanding your legal obligations to preserve evidence for litigation
• Knowing the potential pitfalls with data sources, including audio files and text messages
• Learning ways to protect and avoid waiving the attorney-client privilege

Register for the webinar.

HousingWire will present a complimentary webinar on digital mortgages on Thursday, Dec. 14, 2017, at 11 a.m. Pacific time / 2 p.m. Eastern time.

Anyone who cannot watch the presentation in real-time can register to receive a recording of the webinar afterwards.

eSignLive by Vasco will sponsor the event.

“With emerging alternative lenders aggressively entering the market, traditional banks and lenders are looking to the digital mortgage as a competitive advantage,” HousingWire reports. “While originators have successfully automated the initial stages of the mortgage application and disclosure delivery process with electronic signatures, they haven’t fully digitized the entire mortgage workflow. With the help of eClosing and eVaulting platforms however, the “holy grail” of the digitization of complex mortgage transactions is now at arm’s length.”

Topics will include:

• How and where the industry is adopting eMortgage technology
• Legal and regulatory requirements
• E-apps, e-disclosures, e-closings, e-vaulting… where you should start
• Implementation options for a phased transition
• A live demonstration

Register for the webinar.

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.

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.

Contract drafters sometimes confuse governing law clauses and jurisdiction clauses, according to a post on the website of Wilk Auslander.

Karen A. Monroe and Olga Larionova explain those clauses are related but are not the same. There is a greater likelihood of confusion or overlap in the context of international contracts, versus domestic contracts.

Their article presents a sample governing law clause, as well as a sample juristiction/forum selection clause for dispute resolution by courts and not by arbitration.

Read the article.

Image by Mike Kalasnik

With the holiday shopping season approaching and bankruptcy proceedings underway in federal court, Toys R Us went to its creditors in November with an unorthodox request, The Washington Post reports. To boost sales, the insolvent company asked: Let us pay out millions of dollars in bonuses to our top executives.

Under the plan, which has been approved by a bankruptcy judge, the company will pay 17 executives about $14 million in incentive bonuses, as long as the company hits its target of $550 million in earnings. It must hit a minimum of $484 million in adjusted earnings before any bonuses are awarded.

“Attorneys for the company argued in court papers that the bonuses would help encourage executives to focus on driving up sales as the holidays approach,” the Post‘s Derek Hawkins reports.

Read the Post article.

Johnson & Johnson and Bayer AG are responsible for a woman’s injuries tied to the blood-thinning drug Xarelto and must pay almost $28 million in damages, jurors concluded in the companies’ first loss at a trial over the medicine.

Bloomberg Technology reports that the plaintiff said she took Xarelto, sold by J&J’s Janssen Pharmaceuticals unit, for more than a year before being hospitalized in 2014 with gastrointestinal bleeding she blamed on the drug.

The jury in Philadelphia on Tuesday ordered J&J and Bayer, which jointly developed the product, to pay $1.8 million in actual damages and $26 million in punitive damages.

“The companies still face more than 21,000 patent suits over Xarelto, which has been linked to at least 370 deaths, according to U.S. Food and Drug Administration reports. Patients have said that Xarelto can cause uncontrollable bleeding and that Bayer and J&J failed to provide an antidote. Some also claim the companies failed to properly warn about the drug’s risks,” according to Bloomberg’s Jef Feeley and Margaret Cronin Fisk.

Read the Bloomberg article.

For the sixth year in a row, the commercial litigation and intellectual property firm Ahmad, Zavitsanos, Anaipakos, Alavi & Mensing P.C., or AZA, is being recognized among the nation’s Best Law Firms by U.S. News & World Report and The Best Lawyers in America.

“Ahmad, Zavitsanos, Anaipakos, Alavi & Mensing is our go-to firm for any high-stakes litigation. They are smart, tough and effective,” one C-Suite client executive told the publications’ researchers.

Houston’s AZA is listed in the 2018 top tier of area metropolitan law firms for commercial litigation. The selection of Best Law Firms is based on a rigorous process that includes client and lawyer evaluations and peer review from other attorneys in the same practice areas.

Read details of the award.

Delegating a $12 million arbitration to accountants rather than lawyers in Apache v. YPF SA was the right call, writes Charles Sartain in the Gray Reed Energy & the Law blog. The problem was in the procedures and protections for a party believing the accountants got it wrong.

Sartain provides background: “Apache sold its entire business in Argentina to YPF for $700 million. The Sale and Purchase Agreement allowed for adjustments to the consideration based on a variety of factors. The parties traded accounting statements, and a dispute arose over a ‘Lock Box Working Capital’ amount and ‘Leakage.’ YPF contended that Apache owed $12 million.”

The parties submitted the dispute to KPMG, which found that Apache owned $98. million. Apache challenged the finding.

Read the article.

Firm fixed-price contracts seem like a simple concept in practice — agreements that do not allow for the modification of the contract price after award without an express agreement between the parties. But in reality, there is very little case law guiding the practical approach to these types of contracts, writes Marion T. Hack of Pepper Hamilton.

In her article on the firm’s website, she examines the definition of fixed-price contracts and cases in which the audit provision in the contract has been unsuccessfully used to assert claims for reimbursement and False Claims Act liability.

Read the article.

Thomas McVey, partner and chair of Williams Mullen’s International Practice Group, will lead a complimentary webinar on the latest International Traffic In Arms Regulations (ITAR) developments for government contracts executives.

The event will be Wednesday, Dec. 13, 2017, at 1 p.m. Eastern time.

ITAR is an important area of regulation for government contractors, the firm says on its website. This includes firms in the defense, technical services, information technology, cyber-security, military training and DOD-funded R&D fields. These requirements often apply even if a company is not engaged in any exporting activities – often just performing activities in the U.S. can trigger ITAR obligations. The stakes are high – violations can result in criminal penalties of up to 20 years imprisonment.

The program will provide executives a clear overview of the law and an update on important recent developments.

Who Should Attend: CEOs, CFOs, COOs, in-house counsel, compliance personnel, operations directors and contracts administrators

Topic outline:
• How do I know if my company is subject to ITAR?
• Is my company required to register under ITAR
• Requirements for ITAR-controlled technical data and software
• Controls on defense services and Technical Assistance Agreements
• Requirements for dealing with foreign national employees and other foreign individuals
• Obligations of second- and third-tier suppliers; subcontractors and vendors
• Are we subject to ITAR if we only perform services for U.S. government agencies?
• Contracts with foreign military organizations
• How to develop an effective ITAR compliance program
• Requirements under DFARS §225.79 and 252.225-7048
• Recent data security requirements
• What to do if you discover a violation

Time has been allotted for a brief Q&A for the speakers to address questions from the audience.

Register for the webinar.

Twenty-three Trump businesses including his Mar-a-Lago Club must retain records after they receive subpoenas from the attorneys general in Maryland and the District of Columbia as part of a lawsuit accusing the president of profiting from his office, Bloomberg reports.

A U.S. district judge granted the Democratic officials’ request to serve so-called preservation subpoenas, which require the businesses to retain documents but not to immediately produce them, accordingn to reporter Andrew W. Harris.

The AGs claim that the president’s continued ownership of his business empire allows him to make money from foreign and domestic governments.

Read the Bloomberg article.