In a post on the American Medical Association website, AMA senior attorney Wes Cleveland discusses physicians’ letters of intent and when an attorney should be retained during the contracting process.

He explains that the letter of intent represents an effort for the physician and employer to be sure they’re on the same page on such issues as compensation, length of employment, benefits, responsibilities and more.

He also discusses binding versus non-binding agreements.

Read the article.

A recent New York case sheds some light on the use of contract clauses that cover cardinal changes in construction, according to an alert by Henry L. Goldberg for Moritt Hock & Hamroff.

The case involves a $5,320,000 subcontract for masonry on a project. In a dispute that arose during the project, the subcontractor alleged that the general contractor had interfered with its work and wrongfully deleted an excessive portion of the subcontractor’s work in material breach of the subcontract. In other words, in its defense it asserted the “cardinal change doctrine.”

“The standards for finding a cardinal change are imprecise; courts have wide discretion,” writes Goldberg. “What, in fact, is the ‘essential identify’ and ‘main purpose’ of your contract? Here, the court failed to find the subcontractor in breach for walking off the job.”

Read the article.

A Texas court of appeals ruled that “oil or gas” is not limited to “crude petroleum,” but includes refined petroleum products gasoline and diesel, according to Charles Sartain, writing in Gray Reed’s Energy & the Law.

The case involves a pipeline easement that allows a production company to transport oil or gas across the plaintiff’s property. The property owner contended that “oil and gas” referred to crude petroleum, but not refined products.

The court researched definitions of “oil” and “gas” and found that refined petroleum products “fell within the commonly accepted meaning of the terms oil or gas at the easement’s approximate date.”

Read the article.

The outcome of a suit involving a contract between a general contractor and a subcontractor hinged on an apparently missing apostrophe in the agreement, writes Keith Paul Bishop in the Allen Matkins California Corporate & Securities Law blog.

The provision reads: “Ten percent (10%) of Subcontractor’s contract amount shall be withheld and will be released 35 days after completion of subcontractors work.”

The subcontractor abandoned the job, but later argued that the reference to “subcontractors” (no apostrophe) must mean any subcontractor, not just itself.  Thus, it was entitled to payment of the retention when the replacement subcontractor finished the job, the original sub argued.

Read the article.

Peter M. Gillon, writing in Pillsbury’s Policyholder Pulse blog, discusses an important decision in the world of professional liability (including D&O and E&O policies).

He explains that the Seventh Circuit recently held that a “contractual liability” exclusion—i.e., an exclusion for claims “based upon or arising out of … breach of contract”—when inserted in a professional liability policy, that is, a policy intended to insure professionals for services they perform under contract, renders the coverage “illusory.”

He adds that the court concluded that the exclusion as written eliminated all coverage under this professional liability policy for the very kinds of claims the policyholder sought to insure—on its face, not just as applied to the particular claim.

Read the article.

The U.S. Court of Appeals for the Sixth Circuit held that employers cannot by contract shorten the statutory limitations period (i.e. the time period within which a claim must be brought) under Title VII, writes Fiona W. Ong for Shawe Rosenthal’s E-Updates.

Ong explains:

“In Logan v. MGM Grand Detroit Casino, the employee signed a job application containing a provision that established a six-month limitations period for bringing any lawsuit against the employer and that waived any applicable statutes of limitation. The employee, 216 days after her resignation, filed a charge of discrimination with the EEOC, and after she received a notice of right to sue, brought suit in federal court. The employer moved to dismiss her lawsuit because it was not timely filed within the contractual six-month period.”

Addressing the issue for the first time, the court found  that contractual limitation in Title VII cases to be unenforceable.

Read the article.

Several court cases in 2019 dealt with (or are still dealing with) key issues faced by parties to commercial contracts, including contracts for technology products and services, writes Eric Begun in a post for King & Fisher Law Group.

The post briefly discusses four of those cases and their corresponding issues of contract assignment, representations and warranties, and data security.

Begun’s discussion of the four cases provides take-away lessons for each.

Read the article.

The 2019 Texas legislature enacted a new Property Code Section 5.152 to protect mineral and royalty owners from a certain species of fraudulent transactions perpetrated on trusting and/or naïve and/or out of state mineral owners, reports Charles Sartain in Gray Reed’s Energy & the Law blog.

The change is meant to address a scam in which someone “fronting for a company with a name similar to a reputable operator, would approach the owner with an oil and gas ‘lease’ of minerals or royalty that were already subject to an existing lease. Except that the lease was actually the sale of the mineral or royalty interest at a bargain price.”

The article lists the changes addressed by the new section.

Read the article.

The U.S. Court of Appeals for the Federal Circuit reversed a district court decision that retained jurisdiction over a breach of contract action, finding that the action did not sufficiently implicate issues of patent law and instead was simply a state law contract case for past royalties, reports McDermott Will & Emery via Lexology.

One of the parties to a case involving patents and royalties filed suit, alleging breach of contract and other equitable state law claims.

The defendant asserted counterclaims of breach of contract, fraud, negligent misrepresentation, restitution and breach of fiduciary duty. Both parties relied on diversity to establish subject matter jurisdiction.

Read the article.

D.C. Toedt III, writing in the On Contracts blog, offers some lessons for drafting representations and warranties in contracts.

He discusses a hypothetical case that involved the sale of a car, showing how the case could turn out differently, depending on whether the seller represented — or warranted — that the car was in good condition.

“If your client is being asked to represent and warrant some fact, then consider whether the client should only represent the fact, or whether the client should only warrant the fact,” Toedt writes in one of his drafting lessons.

Read the article.

ContractWorks has published a new legal tech guide titled “Choosing SharePoint or Contract Management Software,” which can be used for identifying the type of software legal teams need most based on specific business objectives.

The guide is available from the company’s website at no charge.

It includes such information as:

• The different business problems that SharePoint and contract management software are designed to address
• Specific strengths of each type of software
• Scenarios where SharePoint and contract management software can be used together

Download the guide.

Restrictive covenants in employment agreements and employee benefit arrangements will be enforced in appropriate circumstances, but parties should be aware of varying standards from state to state, warns Jonathan Orleans for Pullman & Comley.

Orleans, writing in a post for JDSupra, says that enforcement of noncompetes can be complicated. Sometimes statutes create exceptions, and sometimes exceptions are developed through caselaw.

While courts frequently comment that restrictive covenants are “disfavored in the law,” they can be enforced if they meet certain standards.

Read the article.

Bloomberg Law reports that a former Hershey Co. intellectual property lawyer can’t proceed with a suit alleging he was discriminated against when the company terminated him by saying it was eliminating his position, but then hiring “a younger, African-American woman” for the same job, the Middle District of Pennsylvania said.

Kurt L. Ehresman, a 52-year-old white man, worked as Hershey’s senior counsel for global intellectual property until Hershey told him it was eliminating his position, writes Bloomberg’s Blake Brittain. Ehresman said Hershey soon created a “Head of Intellectual Property” position and hired a younger black woman “to promote Defendant’s goal of diversity.”

The court found his claims were barred by an agreement he signed when he left the company.

Read the Bloomberg Law article.

A post on Gray Reed’s Energy & the Law blog discusses the question: Under Louisiana law, does the operator’s bad faith preclude recovery for the non-operator’s breach of a joint operating agreement if the operator caused the non-operator to breach the JOA but did not itself breach?

Charles Sartain summarizes the background of Apache Deepwater, LLC v. W&T Offshore, Inc., a conflict between parties to a joint operating agreement for operations on offshore deepwater wells.

The case was complicated by conflicting provisions in the JOA.

Read the article.

D.C. Toedt III, writing in the On Contracts blog, describes how  parties to a contract often circulate just signature pages to be signed, and the problems that can arise with that practice.

He also explains the importance of making sure that the signed version is identified (e.g., with a running header).

He analyzes a lawsuit that involved a former vice president of a company who sued to compel the company to give her the equity that she claimed was due to her under the “signed” agreement. But the parties, after sending revised drafts back and forth, had apparently signed signature pages for different versions of the agreement.

Read the article.

The China Law Blog has published part one of an expected series of posts setting out exactly what foreign companies should do (and not do) to protect their intellectual property in China.

The author, Dan Harris of Harris Bricken, tells the story of a prospective client who sought help because a Chinese manufacturer he was working with on a product started selling a new product that happened to have the same features and functions as the product the American developer had submitted to the manufacturer.

Harris’ firm told the prospective client not much could be done because the nondisclosure agreement with the manufacturer was worthless in China. And U.S. patents won’t provide much practical protection, either.

The firm’s lawyers explained that the developer would have been better off if he had an NNN agreement —non-use, non-disclosure, and non-circumvention — that would be enforceable in a Chinese court with jurisdiction over the Chinese defendant. .

Read the article.

A California Court granted a defendant’s motion to compel arbitration based on a duly formed and consented arbitration clause via a “clickwrap” agreement, despite the plaintiff’s argument that no contract was ever formed because the purpose of the contract was to facilitate the selling and distribution of marijuana, which is illegal under federal law.

A post by Womble Bond Dickinson describes a case in which the defendant was hit with a putative class action in California federal court claiming it violated the Telephone Consumer Protection Act.

The defendant’s terms of service, which were hyperlinked in the sign-up box, contained a clause providing for arbitration of disputes with a class-action waiver.

Read the article.

A new post on Global Private Equity Watch discusses the continued need for vigilance in the wording of forum of selection provisions in agreements.

Author Glenn D. West takes a look at a recent Delaware ruling on an anti-suit injunction attempting to prevent a suit being prosecuted in Texas.

The court granted the injunction against the Texas suit because the fraud claims would require construction and interpretation of the agreement.

Read the article.

Over the course of the past several years, several states have banned or severely restricted the ability of businesses to bind low-wage workers to post-employment restrictive covenants, points out a Seyfarth Shaw client alert.

“While such legislation trickled out over the last several years, 2019 has seen five additional states enact prohibitions on utilizing non-compete agreements for certain low-wage employees, with at least seven other states and the District of Columbia considering similar non-compete legislation,” write the authors, Justin K. Beyer and Daniel P. Hart.

Because these new laws and other developments in restrictive covenant law over the past year may require changes to a company’s template restrictive covenant agreements, companies should consider reviewing and revising their template agreements more broadly by the end of the year, the authors advise.

Read the article.

A recent case decided in the Court of Federal Claims serves as a stark reminder that any time a contract with the Federal government is amended or modified, the parties must pay particular attention to any release language contained in the amendment, or they run the risk of releasing potential claims that are unrelated to the modification, according to the Murtha Cullina Family Business Perspectives blog.

Mark J. Tarallo discusses the case of Meridian Engineering Co. v. US, a dispute a contested release and waiver of payments for the work at issue.

“Any release document (including releases with parties other than the government) should be narrowly drawn and clearly articulate those claims that are being released,” Tarallo advises

Read the article.