The most dangerous terms of a contract — the terms in the “boilerplate” — are often ignored and overlooked, writes Brad N. Mondschein in an article published on Pullman & Comley LLC‘s website.

“Because similar boilerplate language is included in all contracts, many parties ignore the language as unimportant ‘legalese’ that has no real effect on the contractual relationship and is only understood by lawyers,” he writes. “While there is boilerplate language that is standard and is looked at only in passing (such as the ability to sign the contract in counterparts or the fact that changes to the contract must be in writing signed by the parties), technology contract boilerplate language has become increasingly complex and important to the relationships of the parties.”

Read the article.

Arbitration agreements are evaluated on a case-by-case basis, writes Vanessa L. Goddard, of counsel with Steptoe & Johnson.

While many are still disfavored, they are more likely to be upheld if they are not unconscionable, she writes in an article posted on the firm’s website.

“The procedural component of the unconscionability analysis usually deals with the formation of the agreement itself. This includes the characteristics of the parties (e.g., age, literacy, sophistication), the manner and circumstances under which the contract was executed, and whether terms of the agreement are hidden or complex, among other things.  The substantive component looks at the unfairness of the agreement,” according to the article.

She provides some tips that make arbitration agreements more likely to be upheld by courts in the employment context.

Read the article.

So-called “smart contracts” are science fiction realized, write Professor Michael Mainelli, executive chairman of Z/Yen Group and principal advisor to Long Finance, and Bob McDowall, an Associate of Z/Yen. Executable pieces of code stored on a mutual distributed ledger for future execution bind people and payments to actions and outcomes, they explain in their article published by CoinDesk.

In their article, the authors discuss challenges facing blockchain-based smart contracts and make recommendations for how they can be best used in the short term as they mature.

“Most critically, the implementation of the contract requires no direct human involvement after the smart contract has been made a part of the distributed ledger, which makes these contracts “smart,” or autonomous. The code automates the “what if this happens” element of traditional contracts,” according to the article.

Read the article.

Encouraged by consumer groups and trial lawyers, federal regulators are pushing for limits on arbitration provisions in consumer contracts, writes George Calhoun in IfrahLaw’s FTC Beat.

“At its core, the debate is about whether companies may compel consumers to arbitrate rather than litigate disputes and – perhaps more significantly – bar consumers from class action remedies as part of the arbitration requirement,” he writes.

“We will not be surprised to see some companies restrict their consumer offerings or increase prices to account for these new rules.” the article continues. “If you work in American business, we urge you to take notice of these changes and review how to protect your company from undue litigation in future contracts.”

Read the article.

Photo by Jay Greinsky

Donald Trump’s campaign for the Republican presidential nomination rests on the notion, relentlessly promoted by the candidate himself, that his record of business deals has prepared him better than his rivals for running the country. But an examination of legal maneuvers around a 46-story luxury Trump condominium-hotel in Lower Manhattan provides a window into his handling of one such deal and finds that decisions on important matters like whom to become partners with and how to market the project led him into a thicket of litigation and controversy, writes Mike McIntire for The New York Times.

The buyers of some units asserted that they had been defrauded by inflated claims made by Trump, his children and others of brisk sales in the struggling project. Contrary to his claims that he rarely settles litigation, he and his co-defendants settled the case in November 2011, agreeing to refund 90 percent of $3.16 million in deposits, while admitting no wrongdoing.

A separate lawsuit claimed that Trump SoHo was developed with the undisclosed involvement of convicted felons and financing from questionable sources in Russia and Kazakhstan, the report states.

Read the article.

Just days after the city of Dallas filed an R-rated defense of the City Council’s vote to ban Exxxotica from the city-owned convention center, the porn expo has fired back that Dallas officials knew exactly what they were getting when they took the porn expo’s $28,080 last year, writes Robert Wilonsky for The Dallas Morning News.

The porn expo’s response is in response to a March 25 Dallas filing, which claimed Exxxotica’s organizers misrepresented the amount of nudity and sexually oriented activity that would take place during Exxxotica’s first event at the Kay Bailey Hutchison Convention Center last August. “As far as Dallas’ attorneys are concerned, broken promises to keep women (mostly) clothed trump Exxxotica’s allegations that the City Council trampled its First Amendment rights when it voted to ban the event two months ago,” reports Wilonsky.

U.S. District Judge Sidney Fitzwater will hear Exxxotica’s motion for a preliminary injunction on April 18.

Read the article.

By Mark Perkins
Perkins & Associates, LLC

In any instance involving the tragic loss of life or serious injury in commercial truck collisions, extensive discovery is required and one of the critical areas focuses on proof of hours of service violations. It then focuses on how the proof of chronic violation of hour of service safety regulations can provide the basis for proof not only of negligence, but punitive damages against the company and driver.

Where the driver’s log and grid show 3.5 hours driving time, but shows a route of 300 miles being covered, one can conclude:

• The driver has lied about the time he spent driving, or
• The driver was flagrantly speeding throughout his route (a truck obeying speed limits on highways will average 50 miles in an hour).

If a driver shows a 24-hour period of duty and begins with “driving” as the first entry, the driver has probably cheated on listing his duty time. It usually takes from 30-60 minutes for a driver to report to duty to the yard, get all of his paperwork, inspect his load, and perform the required inspections on his rig.

Where a driver logs 11 hours of driving time for the preceding 24-hour period and fails to get or log 10 solid hours of “off duty” time before resuming duty and driving, all of his driving for the following day is illegal and in violation of the safety regulations set forth in 49 C.F.R. 395.3.

Time and location of sequential fuel receipts can be important in showing the impossibility of compliance with the hours of service regulations in 49 C.F.R. 395.3.

Plaintiff’s attorneys investigating hours of service are suspicious that hours of service have been violated and records of driver’s duty status have been falsified until proven otherwise. In evaluating and defending claims for trucking companies, the defense attorney needs to THINK like his opponent.

Review and careful analysis  of the following documents helps cross reference criteria to check for validity or invalidity of driver’s duty hours:

1. Driver’s log as required by 49 C.F.R. 395.8 for the day of the collision.
2. Driver’s logs for defendant driver for the 6 months preceding the collision in question.
3. Graph Grid required by 395.8 (g) for that day and for the 6 months preceding the collision.
4. Records of automatic on-board recording devices required by 49 C.F.R. 395.15 for the day of the collision and the 6 months preceding.
5. All payroll, or payment logs, or records for that driver for the time period, including the collision and 6 months prior thereto.
6. All W-2’s for the driver in question for the withholding period, which includes the collision in question, and all reporting periods for 6 months prior thereto.
7. All fuel receipts incurred from the time the truck left the carrier’s premises until the time of the collision.
8. All Bills of Ladings and manifests pertaining to property transported and/or delivered from the time the truck left the carrier’s premises until the time of the collision.

The reason plaintiff’s attorneys ask for six months of logs is because of the belief that driver and company’s violation of hours of service regulations fall into a pattern. Examination of the logs and data for the prior 6 month period may  reveal those patterns. Where such patterns exist, an argument will be made of flagrant disregard of safety regulations, which “needlessly endanger” the general public (for those familiar with the “reptile theory” the phrase “needlessly endanger” is common).

The following post was written by a plaintiff’s attorney and is common refrain among plaintiff’s counsel:

49 C.F.R. Part 395 protects the public from the hazard of fatigued drivers operating huge trucks in their midst.  The hours of service regulations have been written from the blood of innocent citizens massacred by huge trucks at the hands of drivers impaired from fatigue.  Where a driver and carrier intentionally violate the safety regulations designed to guard against fatigue, they have shown a conscious disregard for the safety of the public using our highways.  Where such a fatigued driver has caused injury or death, the driver and carrier have acted with conscious and reckless disregard for the life and safety of the public on the highways.  This conduct justifies a punitive damage award against them, in addition to compensatory damages.

A bill approved by Congress on  Dec. 3, 2015 calls for a Federal Motor Carrier Safety Administration study on truck drivers’ long commutes and the safety hazards they present.

The $305-billion Fixing America’s Surface Transportation Act requires that  the U.S. Department of Transportation agency to track workforce commutes of two hours or more and provide an analysis of them in 18 months.

The section of legislation inserted into the potential new law is a direct result of the crash that almost killed former Saturday Night Live cast member Tracy Morgan. It states:

“Section 5515 requires the Administrator of the FMCSA to conduct a study on the safety effects of a motor carrier operator commuting more than 150 minutes. On June 17, 2014, a tractor-trailer struck a van near Cranbury, New Jersey, killing one person and injuring several others. According to the National Transportation Safety Board, the truck driver had been awake more than 24 hours at the time of the crash. In addition, the Georgia-based driver had driven 12 hours overnight to his job in Delaware before starting his shift. The study shall address the prevalence of long commutes in the industry and the impact on safety.”

If you’re a trucking defense attorney and you don’t evaluate the case like a plaintiff’s attorney would, you are not providing diligent representation.

If   you’re a trucking company or insurance company and you get offended by your legal representative diligently looking for problems and thinking like his opponent, you need to get over it. Your defense attorney is trying to help your company survive and thrive in this litigious society.  Be grateful that your legal counsel is a looking for problems. It’s better to know in advance than to be surprised.

Mergermarket has released its Global M&A roundup for the first quarter (Q1) of 2016, including its league tables for legal advisors.

A few key findings include:

• Tax inversion targets, traditionally coming from the Pharma, Medical & Biotech sectors, now appear to be shifting toward other sectors such as Industrials & Chemicals, in a bid to scale up to +$100bn conglomerates. US-based Johnson Control’s US$ 16.2bn bid for Ireland-based Tyco International was the top deal for that sector, and one which also looks set to benefit from Europe’s more favorable corporate tax rates as compared to those of the US. The Tyco/Johnson Controls transaction comprises 73.8% of Q1 total outbound value into targets in the Industrials & Chemicals sector (US$ 21.9bn)
• Law firm Skadden Arps Slate Meagher holds on to the number one spot for deal value for another quarter while Kirkland & Ellis jumped to #2 from #5 in Q1 of 2015. White & Case made a big leap from ninth place in Q1 2015 to third this quarter
• Private equity buyout activity struggled to compete against strategic buyers in 2015, demonstrated by the average price paid last year being just US$ 640.2m compared to a strategic company spending on average US$ 902.8m. However, to date in 2016, the average offer price by a buyout firm has increased slightly to US$ 626.3m, while the average value by strategics has decreased to US$ 607.5m. The following months could provide even more opportunities for buyout firms to secure targets

Download the report.

William J. Kohler has joined Dykema’s Corporate Finance Practice Group as senior counsel in the firm’s Detroit office.

Kohler has held leadership positions at major corporations in the automotive industry throughout his career. Most recently, he served as Chief Legal Officer and Corporate Secretary of global automotive suppliers Dura Automotive Systems, LLC, and Global Automotive Systems, LLC, and previously was Vice President and General Counsel for the North and South American automotive operations of Johnson Controls, Inc.

In a release, the firm said he has advised some of the world’s largest automakers and suppliers. He has led some of the automotive industry’s larger and more complicated acquisitions and divestitures, negotiated specialized supply agreements involving the sale and purchase of billions of dollars in critical components, created key joint ventures, and established international operations and distribution networks. He has also led development of significant intellectual property arrangements, including technology licensing and joint development arrangements, and authored the article “Current and Potential Legal Issues Pertaining to Automated, Autonomous and Connected Vehicles.”

“In addition to his strong background in the automotive sector, Bill brings deep expertise on corporate governance and regulatory matters,” said Wilhelm E. Liebmann, Leader of Dykema’s Corporate Finance Practice Group. “He has ties to leaders in Washington, a good grasp of state and local economic development initiatives and has counseled a variety of clients on cross-border matters.”

“Bill’s résumé and years of experience working with automotive heavyweights make him a great fit at Dykema,” said Brendan J. Cahill, Director of Dykema’s Automotive Industry Group. “His background and experience will be a great value for our clients.”

Kohler received a J.D. from the University of Michigan and a A.B. from the University of Michigan Honors College. He also received an M.B.A. from Michigan State University.

Governments invest billions of dollars annually in automating government financial management, customs, and tax systems respectively. But aside from a few cases that are repeatedly quoted, there is little rigorous evidence of the impact of these investments on government efficiency and accountability to deliver services, reports Zahid Hussain, Lead Economist, South Asia Finance and Poverty group, for the World Economic Forum.

“An examination of the roughly 530 e-government projects funded by the World Bank in the past twenty years, for example, reveal that almost a third are unsatisfactory, and perform worse than a typical project,” the report says.

The conclusion is that digital technologies can indeed be transformative; but only if accompanied by “analog complements,” Hussain writes.

Read the article.

The Texas Plain Language law will mandate that auto finance contracts be written at an 11th-grade reading level by 2017, writes Nicole Munro of Hudson Cook LLP in an article published in Auto Dealer Today.

The Consumer Financial Protection Bureau already has a “know before you owe” program aimed at simplifying mortgage disclosures and a few states have had “plain language” laws on the books for awhile, but there has been no discernible move by other states to follow the readability route — until now, she writes.

“Requiring that documents be written in language an 11th grader can understand seems perfectly reasonable. Requiring that legal documents setting forth the rights and duties of parties to a transaction involving tens of thousands of dollars be written in 11th-grade prose? Not so much,” she writes.

Read the article.

Trump University isn’t the only Donald Trump endeavor that has landed in court, reports Mother Jones magazine.

“The tycoon has launched — or lent his name to — a slew of business ventures that have yielded frustrated customers and investors who have sought legal recourse. There are hundreds of lawsuits extending over 43 years that name Trump or one of his businesses,” says the magazine.

The report includes a list of some of those legal skirmishes that began when Trump joined his father’s business and continue through his run for the GOP nomination, such as Trump Management, Trump Tower, Trump’s Atlantic City casinos, Trump SoHo, Trump Baja, Trump Model Management, and more.

Read the article.

“Boilerplate” is standardized language used in common documents to reduce the time spent in negotiation and document preparation, explains Brad Reid, Senior Scholar, Dean Institute for Corporate Governance and Integrity at Lipscomb University, in an article published on the HuffingtonPost. He says it would be a mistake not to analyze boilerplate, because it may vary.

His article provides a brief and incomplete educational overview of some forms of boilerplate.

He covers such topics as choice of language provision, dispute resolution provisions, arbitration or mediation provisions, waiver of a jury trial, amendment and anti-waiver language, amendment and anti-waiver language, assignments and delegations, third party beneficiaries, force majeure, and more.

Read the article.

About a year after Erin Callan took over as C.F.O. of Lehman Brothers, the then-150-year-old investment-banking institution that turned out to be at the heart of the financial crisis, Callan downed a bottle of sleeping pills on Christmas Eve. It was also six months after Callan resigned from the firm under mounting pressure, and just three months after Lehman filed for bankruptcy, according to a story in Vanity Fair.

In a new book, she tells how she went from being one of Wall Street’s most powerful female executives to feeling like she was set up to take some of the blame for one of the biggest financial collapses in modern history.

She writes how she had been in the job for just three months when she alone was tasked with delivering financial results to investors spooked by Bear Stearns’ fire-sale to JPMorgan, for $2 a share, just two days earlier. Both Lehman’s president and CEO gave her the job of assuring investors that was not the case, the magazine article says.

“Since I was the sole presenter on the call, every public statement about Lehman that was part of the speech and the Q&A is totally attributed to me. Just me,” she wrote.

Read the article.

A legitimate fear among companies negotiating license agreements exists, and that is the fear of the license counterparty filing for bankruptcy, reports Christopher A. Ward and Cortney E. Mendenhall of Polsinelli PC.

“Given the business interruption that ultimately could occur as a result of a restructuring event, it is vital for practitioners to address bankruptcy or insolvency issues upfront during the negotiation of the license agreement,” they write. “This is especially true for licensees who often rely heavily, if not exclusively, on a licensor for significant aspects of their business.”

They discuss several negotiation and drafting tips that practitioners can utilize to help protect their licensee clients in the event of a bankruptcy filing under chapter 11, of Title 11, of the United States Code (the “Bankruptcy Code”) by the licensor counterparty.

Read the article.

Buying or selling a business is a detail-intensive ordeal, and one of the most crucial parts of the final sales agreement is the non-compete agreement, according to an article posted by Brad Denton of Denton Peterson, PC.

“A non-compete agreement is a contract where the seller agrees not to compete directly with the buyer within mutually agreed-upon parameters. Clearly, any potential buyer is obligated by common sense to have this agreement set in stone before completing a big transaction. If no non-compete agreement is in place, nothing prevents the seller from setting up shop next door with the same product right after the sale is finalized,” the article says.

He covers such topics as geographic limitations, time period restriction, blue pencil rule, step-down provisions, and selling businesses vs. employment contracts.

Read the article.

Now that Marco Rubio is out of the race, for the first time in U.S. political history, every presidential candidate — of both parties — supports at least states’ rights to do as they please with regard to marijuana legalization, according to a report in Rolling Stone.

Bernie Sanders, who pledges to end the drug war, is the most progressive on marijuana policy. And fellow Democrat supports states’ rights to legalize, but proposes to reschedule instead of deschedule cannabis, the newspaper says.

Donald Trump believes there should be more research on cannabis. Ted Cruz says he would not support legalization, but he believes states have a right to determine the legality for themselves. John Kasich also is opposed to marijuana use, but would defer to states’ rights, the report says.

Read the article.

A former vice president of the drugmaker that drew national criticism for raising the price of a parasite-fighting medication by 5,000% testified he was fired weeks after telling CEO Martin Shkreli the increase “was not justified,” reports USA Today.

The report says Howard Dorfman, also the former top lawyer for Turing Pharmaceuticals, told a Senate committee he joined managers who told Shkreli and other company officials that hiking the price from $13.50 per pill to $750 per pill “would have a severely negative impact on Turing’s business and reputation.”

Shkreli later resigned from Turing and now faces unrelated federal securities fraud charges.

Read the article.

An article written by Jeremy Andrews and Talia Taylor of DLA Piper highlights the key points to consider whether you are looking to terminate a contract or challenging an attempt to terminate.

The paper covers topics such as reasons to terminate, contractual termination, termination at common law, repudiatory breach, election, anticipatory repudiatory breach, affirming the contract, terminating the contract, termination notice requirements, and practical points.

“Can I terminate my contract? Does the other party have a right to terminate? These appear to be simple questions, but termination of contracts is a complex area of law,” the authors write.

Read the article.

Even though they are still largely theoretical, smart contracts are being hailed as a force that will disrupt a number of industries, write Mark Hines and Niklas Holmberg of Gowling WLG in a post on Lexology.com. However, only superficial attention has been paid to the impact smart contracts will have on contract law and the role of the law in determining where and how smart contracts will be used.

Their post provides an overview of smart contracts and how they work and identifies some of the areas of contract law that we expect will be the focus of jurisprudential change.

They explain smart contracts, blockchain technology, and the legal implications of smart contracts.

Read the article.