A post in the Burns Levinson In-House Advisor blog takes a look at the use of multi-tiered pre-litigation dispute resolution clauses in contracts.

Author Shepard Davidson writes that the theory behind such mechanisms “is straight-forward and quite laudable: if the parties can resolve a dispute without resorting to litigation or arbitration, they likely will save themselves a lot of pain, anxiety and, most of all, money. In reality, however, forcing people to engage in settlement discussions may actually cause one party or the other to lose substantive rights.”

He concludes that forcing parties to engage in a process that only can work if all of them want to participate seems unlikely to result in anything other than delay and added expense.

Read the article.

Two authors writing for Harvard Business Review present a case for companies adopting so-called relational contracts.

In a recorded discussion, Oliver Hart, Nobel-winning Harvard economist, and Kate Vitasek, faculty at the University of Tennessee, argue that many business contracts are imperfect, no matter how bulletproof you try to make them.

Their research shows that creating a general playbook built around principles like fairness and reciprocity offers greater benefits to both businesses.

Read the article.

A recent federal court decision reminds employers that an employee’s electronic acceptance of an arbitration agreement may not, by itself, be enough to prove that the employee has agreed to arbitrate, points out Stokes Wagner post.

In Shockley v. PrimeLending, the U.S. Court of Appeals for the Eighth Circuit recently affirmed the lower court’s decision to deny the employer’s motion to compel arbitration where the arbitration agreement was signed via the employer’s automated intranet system.

The author, Jordan A. Fishman, discusses the reasons that acceptance via intranet system was insufficient.

Read the article.

Because Enterprise Resource Planning implementation and software licensing contracts are as complicated as the software itself, there are a number of key things for general counsel to keep in mind as they review these contracts, according to a post on the Taft Technology Insights blog.

Author Marcus Harris offers a guide to negotiating and drafting contracts for ERP software systems, discussing seven main areas where companies slip up most-frequently.

The areas include: specify the vendor as the expert, detail liability, define responsibility, put everything in the contract, watch out for contractual remedies, and have a mechanism for controlling scope.

Read the article.

A post on the Tech & Sourcing blog of Morgan Lewis provides a checklist of common workstreams to consider inn outsourcing and managed services transactions.

Authors Barbara Murphy Melby and Kevin P. Dermody discuss governance, planning, people and asset transfers, resource mobilization, operations, processes and documentation, infrastructure and security enablement, networks, change and communications management, and third-party contracts disposition management.

Read the article.

A recent Delaware case serves as a reminder that a murky path to a signed agreement and lack of good record-keeping can lead to a finding of non-enforceable contracts, according to a post in the Taking Care of Business blog of White and Williams.

Authors Lori Smith and Gwenn Barney discuss a case in which an independent contractor for a company negotiated an arrangement to buy shares in the company. Although, both parties believed they had signed an agreement in 2007, because of the manner in which the drafts and signature pages were exchanged, the parties had differing understandings and recollections of what had actually been agreed upon.

The lack of any record trail, or “hard evidence,” in this case (other than the various drafts) made it difficult to find clear evidence of a meeting of the minds, the authors explain.

Read the article.

In Seyfarth’s fourth installment in its 2019 Trade Secrets Webinar Series, Seyfarth attorneys Kristine Argentine, Eric Barton, and Katelyn Miller focused on the enforcement of non-competes and how the difficulty of enforcement of these restrictive covenants vary by state, especially based on recent legislation in various states.

The post includes a link to the webinar for on-demand viewing.

It also includes a summary of takeaways from the discussion.

Read the article.

Contract damages can be a great thing in a China contract, but only if done right, according to Dan Harris, writing in the Harris Bricken China Law Blog.

He explains that the term “contract damages” refers to a contract provision setting out the damages for breach. In the standard commercial contracts his firm writes for clients, the agreements usually include a specific damage amount for certain (but not all) violations of the contract terms.

“The only constant is that we try to make the amount as high as we can, while at the same time erring on the side of keeping it low enough so that it will actually work to scare the Chinese company into not breaching the contract,” Harris writes.

Read the article.

A legal victory for Delta Air Lines this year is unique in that it is the first time that a court has determined that a business owes no obligation of privacy to a customer because its privacy policy explicitly disclaims any type of contractual relationship between the business and its customers, writes Sunrita Sen in the Frost Brown Todd fbtTech Blog.

The case involved a breach of contract claim over the data breach suffered by the airline in 2017.

A U.S. district judge dismissed the claim, agreeing with Delta that the Airline Deregulation Act preempted the plaintiff’s breach of contract claims.

Read the article.

A recent case from the National Labor Relations Board shows that American labor law, including principles that apply to collective bargaining agreements, is not always as straight-forward as basic contract law, points out Barnes & Thornburg in a recent post.

The contract included a clause setting “longevity pay increases” for workers who reached certain tenure milestones with the company.

“The employer and union were meeting to negotiate a successor contract, and the agreement expired in the interim,” explains David J. Pryzbylski. “Once the labor agreement expired, the company ceased offering longevity pay increases on grounds that there was no agreement in effect that provided for such increases.”

The NLRB, however, found that a company generally must continue to offer employees the terms set forth under a collective bargaining agreement when it expires and while negotiations for a new contract are underway.

Read the article.

A recent ruling illustrates how courts will typically enforce a valid forum selection clause, absent a compelling showing of prejudice to the party opposing a lawsuit in the agreed-to forum, according to a post by Murtha Cullina’s Family Business Perspectives blog.

Michael P. Connolly explains that “while substantive disputes under an agreement may still arise, a forum selection clause at least may provide a measure of certainty from the outset as to the location of any future legal action. Without such a clause, a party to an agreement may be forced to litigate in a distant, inconvenient or otherwise unwanted location, which may ultimately increase the expense, disruption and risk in connection with any future lawsuit.”

Read the article.

ContractWorks has published a guide titled “The Contracts Checklist for M&A Due Diligence” and made it available for downloading from the company’s website at no charge.

“Reviewing the contracts and commitments of a target company is one of the most time-consuming and crucial components of a due diligence inquiry,” ContractWorks says on its website. “This guide serves as a non-exhaustive checklist of important contract types to consider during the M&A due diligence process.”

The guide covers:

• Contract due diligence pre- and post-transaction
• Categories of contracts that are important to review and understand
• Tips for getting started and ensuring success

Download the checklist.

Vice News recently reported on the technological revolution overtaking the world in transportation, distribution, food service, health – and legal.

The HBO VICE News special features LawGeex in its report on “The Future of Work.”

In a repeat of the AI vs. Lawyer competition — this time officiated by HBO’s Vice News — the LawGeex AI came out ahead again.

On its website, LawGeex displays a short clip showing how LawGeex performed better in both speed and accuracy.

Read more about the competition.

In a much-awaited and pivotal decision in the PG&E chapter 11 proceeding, the U.S. Bankruptcy Court for the Northern District of California held that it not only has exclusive jurisdiction over the rejection of wholesale power-purchase agreements, but that the Federal Energy Regulatory Commission has no such jurisdiction and any determinations by FERC to the contrary would be void, according to Holland & Hart.

“While the decision might not be surprising to most bankruptcy practitioners, the proposition that FERC has no jurisdiction over the breach or modification of a power-purchase agreement is not only shocking to energy practitioners, but contrary to well-established authority in the energy arena,” the firm said on its website.

Read the article.

Business owners often fail to carefully review the pre-printed sections of contracts to know what the contract actually says, warns Nancy Park in an article for Best Best & Krieger. The form may include terms that were not intended or conflict with the parties’ intent.

“Reading just the filled-in blanks for key monetary or timing terms may result in unintended consequences,” Park explains. “Also, the form user should beware that the party who drafted it may have included clauses favorable to that party. For instance, a broker-drafted form may include payment protections for that party, even though a buyer and seller are the intended actual signing parties to the contract.”

Read the article.

Morgan Lewis’ Tech & Sourcing blog has a new post that focuses on how customers in outsourcing deals handle the disposition of legacy third-party contracts—one of the thorniest and most work-intensive work streams—once diligence has concluded.

The post discusses commonly used disposition categories, factors to consider when applying the dispositions, financial impact, and postsigning changes.

Read the article.

A court recently ordered the seller of a car wash property in New Jersey to fully remediate previously undiscovered environmental contamination at the property in accordance with its contractual obligations, according to a post in the Riker Danzig Environmental Law Blog.

Jaan M. Hause explains in the post that “the seller could have more carefully crafted the language of the rider to limit its remediation obligations. Unfortunately for seller, the language in the rider obligating seller to remediate was extremely broad, and thus exposed seller to additional, costly liabilities that it did not intend to assume.”

Read the article.

By explicitly listing sexual harassment within the definition of “cause” for dismissal in an executive’s employment agreement, a company can avoid paying out hefty benefits to potentially bad actors, advises Ashley K. Pittman in Hutchison PLLC’s employment law blog.

“This can have a big impact,” she writes. “In addition to the direct economic effects and the ability to terminate someone to preserve and strengthen your corporate culture, your company can potentially avoid the public perception that the departing executive was somehow rewarded for bad behavior.”

Read the article.

ContractWorks has published a guide to recognizing, establishing, and monitoring the most important key performance indicators for corporate agreements.

“Using KPIs to Measure Contract Management Performance” is available for downloading from ContractWorks’ website at no charge.

This publication can provide guidance on creating effective KPIs for key contracting areas, discussing steps for successfully presenting objectives and KPIs, using KPIs to actively monitor SMART objectives, and discussing tips for getting started and ensuring success.

Download the guide.

The U.S. Chamber of Commerce and other business and employer groups have just submitted amicus briefs calling on the 9th Circuit to reconsider decisions that, in the views of these amici, eviscerate mandatory arbitration provisions, writes Alison Frankel in a Reuters report.

The briefs come in the wake of the 9th Circuit’s June 28 rulings in which plaintiffs claimed they couldn’t be forced into arbitration because they sought injunctions against corporate defendants.

The court found that because California’s policy of allowing consumers to pursue public injunctions does not specifically obstruct arbitration, it’s not precluded by the Federal Arbitration Act.

Read the Reuters article.