Charles Sartain of Gray Reed & McGraw summarizes in a blog post the takeaways from a recent presentation two of the firm’s lawyers made recently on the use, control and ownership of water in oil and gas operations.

“Groundwater is privately owned by the owner of the surface estate,” he explains. “As with oil and gas, it is subject to the rule of capture. Landowners’ requests that the rule be modified in favor of the ‘rule of reasonable use’ have been rejected by the Texas Supreme Court.”

The post discusses the questions around ownership of produced water in the oil patch.

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For the company that is outsourcing part of its business functions to a third party, reviewing existing third-party contracts for certain key terms is an important part of the outsourcing process, points out Morgan Lewis in a blog post.

Authors Barbara Murphy and Kevin P. Dermody discuss typical terms to focus on when reviewing the third-party contracts: contract expiration date/auto renewal provisions, third-party use rights and restrictions, assignment provisions, pre-paid expenses/annual fees, and termination rights/fees.

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Nothing is more basic to private equity deal making than shielding the private equity firm and its funds from liability for the obligations of the fund’s affiliated acquisition vehicles and portfolio companies; and this certainly includes liabilities for breach of an NDA, points out Glenn D. West in the Weil, Gotshal & Manges Global Private Equity Watch blog.

The article discusses a case that distinguishes between affiliates entitled by the non-disclosure agreement that are entitled to receive confidential information and affiliates actually bound by the agreement.

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A Mississippi federal court denied a defendant’s motion for partial summary judgment in connection with a limitation-of-liability clause, according to a post on the Constructlaw blog of Pepper Hamilton.

Anthony Finzio writes that the Court also denied the defendant’s motion for reconsideration, concluding that the defendant had not carried its burden as the movant of demonstrating that the limitation-of-liability clause limited the plaintiff’s rights as a matter of law.

The case is DAK Americas Mississippi, Inc. v. Jedson Engineering, Inc. et al.

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Posting an arbitration section in your employee handbook may put an employee on notice of a company policy or “offer,” of which the employee could be said to be “generally aware,” but it might not, without more, establish that there is an agreement to arbitrate, pints out Gilbert A. Samberg for Mintz, Levin, Cohn, Ferris, Glovsky and Popeo.

There must be evidence of the employee’s acceptance, he explains in a post on the firm’s website.

He illustrates his point with a case from the Eighth Circuit, concluding: “An employer needs to be able to prove acceptance by each employee of an ‘offer’ of arbitration.”

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The U.S. Bankruptcy Court for the Northern District of California held that it has exclusive jurisdiction over the rejection of wholesale power-purchase agreements, reports Holland & Hart in an article written by Risa Wolf-Smith.

The court also found that the Federal Energy Regulatory Commission has no such jurisdiction and any determinations by FERC to the contrary would be void.

“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,” writes Wolf-Smith.

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Dan Harris, a founder of Harris Bricken and lead writer of the China Law Blog, discusses why he sometimes has to explain to  companies why he never does “template” manufacturing agreements anywhere in the world and why they should not want such an agreement.

The blog post includes part of an email a lawyer in his firm wrote to an international manufacturer, illustrating why an off-the-shelf manufacturing cannot work and makes no sense, even in a rush situation.

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A post on the website of Mackay, Caswell & Callahan discusses the basics of drafting contracts associated with Section 1031 exchanges.

The author explains that this section in the tax code allows taxpayers to use borrowed tax money to purchase more investment or business property.

The article covers the required elements in the exchange agreement, the differences between these agreements and qualified exchange accommodation agreements, assignability, the cooperation clause and release of liability, compliance with receipt requirements, and more.

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Three court cases reveal the importance of ensuring that contracts for an enterprise resource planning software system and other digital transformations be carefully negotiated, writes Marcus Harris in Taft’s Technology Insights blog.

It’s important to remove the possibility that a lawsuit over a failure can be blocked by seemingly harmless clauses that vendors and integrators insert as a matter of routine in their template agreements, he explains.

“Never sign the vendor’s or integrator’s template contract without negotiating and redrafting key provisions – even the boilerplate ones,” Harris advises. “Failing to do so may restrict your ability to sue for damages in the event of a failure.”

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On the heels of the Supreme Court’s recent pro-arbitration pronouncements, the U.S. Court of Appeals for the Eighth Circuit issued a reminder that, although agreements to arbitrate are favored under the law, arbitration agreements must still be contracts, writes Susan Fitzke for Littler Mendelson.

“In order to enforce an agreement to arbitrate, therefore, the employer must prove that a valid contract to arbitrate was created,” she explains. “This may seem self-evident, but in an era where some arbitration programs are contained only in employee handbooks or on-line, this is a point worth closer review.”

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The expiration of an oil and gas lease’s primary term does not necessarily release all non-producing lands, writes J. Mark Robinette.

“This can be so even when the lease contains a Pugh Clause. Typically, most leases contain savings provisions that extend the lease beyond the primary term when the lessee ‘continuously prosecutes’ drilling operations,” he explains.

In a post on his website, he provides a sample of this saving provision from the Producer’s 88 lease form.

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If a contract is too one-sided, it can be ruled illusory and unenforceable, warns Shepard Davidson in the Burns Levinson In-House Advisor blog.

That is exactly what happened to the defendant in McNamara v. S.I. Logistics, Inc. when it tried to enforce its contractual right to arbitration he writes.

In that case, the defendant sought to compel arbitration based on an agreement that  purported to grant the company the unilateral right to modify its terms without any prior notice to McNamara, a former affiliate.

The court found in favor of McNamara, finding that the agreement was illusory.

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A post by Material Handling & Logistics offers 12 tips for a company to reduce legal risk while building a foundation for a long-term relationship with a new transportation provider.

Authors Martin Robins and Lauren Pittelli explain that “the contract is the beginning of your relationship with a transportation provider. A collaborative contracting process with shared goals and understandings, clear expectations and mutual obligations will reduce your company’s legal risk while building a foundation for a long-term relationship.”

The tips cover such topics as due diligence, enforcement practicalities, insurance, performance requirements, and more.

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The United States Supreme Court has agreed to resolve a key issue in international arbitration agreements: whether the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards permits a non-signatory to an arbitration agreement to compel arbitration against a signatory to arbitration based on the doctrine of equitable estoppel.

A post on the Harris Bricken China Law Blog points out that the question has split the circuit courts, meaning that now the answer to the question depends on where in the United States the dispute is being litigated.

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Many employers have offices in multiple states, but want to have one form of employee agreement prohibiting solicitation of employees and customers, points out Dorsey & Whitney.

Because some state laws, namely California, may be too different to reconcile with other states, author Gabrielle Wirth considers the question: What sort of non-solicitation agreements work in California?

“In California, non-solicitation agreements are reviewed as contracts which prevent a person from engaging in a profession, trade or occupation which, with limited exceptions, are void under Business and Professions Code section 16600,” Wirth explains. “Thus, recent cases have held that an agreement between an employer and employee prohibiting the solicitation of customers is not enforceable unless tied to the employee’s use of trade secrets or some other legal duty owed by the employee.”

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The Blockchain & Financial Services Blog of Frost Brown Todd features a discussion in which a court ruled that where a contract between a credit card processor and its sale agent had conflicting clauses, the clause should be read in favor of the sales agent, resulting in the credit card processor being liable for withholding residual payments.

Courtney Rogers Perrin writes about Infinity Capital LLC v. Francis David Corp., from the Northern District of Ohio.

The ruling offers a lesson in contract drafting and the need for clear, non-contradictory provisions, as well as enforceable damages clauses, according to Perrin.

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Two recent court decisions dealing with mandatory arbitration agreements highlight why some manufacturers may gain by requiring pre-dispute employment arbitration agreements, writes Matthew Miklave for the Robinson+Cole Manufacturing Law Blog.

He discusses two federal court rulings favoring individual arbitration over litigation.

In one of the cases, the Second Circuit Court of Appeals reversed a lower court and found that a union labor contract which contained a clause requiring the arbitration of all disputes between the union represented employees and the employer prevented an employee from bringing an individual claim in federal court.

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In its Contract Corner feature, Morgan Lewis highlights considerations for drafting sublicense provisions in the context of an intellectual property license.

“A sublicense in the context of an IP license is any agreement where the licensee grants a third party rights to any of the licensed IP,” the article explains. “This provision is often overly broad, but can be tailored to include standard exceptions (e.g., ordinary course agreements with End Users, distributors, etc.) in order to avoid an overly broad definition and to make sure that the royalty calculations are clear.”

Authors Emily R. Lowe and Morgan Oksana Dudkewitz discuss sublicensing approval, compensation, termination, flow down, document control, and licensor-imposed sublicensing.

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Periodic review and maintenance of noncompetition and other restrictive covenants agreements is crucial to ensure employers get the maximum available legal protection from theft of their customer base and business opportunity, employee talent and confidential information, advises Akin Gump Strauss Hauer & Feld in a website post.

The article summarizes some of the recent and noteworthy state statutes concerning such agreements.

The article adds: “Even in states where there has been no statutory activity, changes in an employee’s job or the underlying competitive landscape can affect the scope of enforceability of noncompete agreements. Post-employment restrictions on working for a competitor or soliciting former co-workers or customers are contracts that must satisfy the usual elements of an enforceable agreement, including a valid offer, acceptance of the offer and consideration to support the parties’ agreement.”

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The Eighth Circuit recently ruled that an employee was not subject to the employer’s arbitration agreement, including a delegation clause. The agreement was contained in an employment handbook addendum, which was available to the employee electronically.

Henry Allen Blair, writing for Arbitration Nation, discusses the case in a post about the ruling in Shockley v. PrimeLending.

Blair cites the court’s opinion, which states that “[w]e are aware of no legal authority holding that an employee’s general knowledge or awareness of the existence of a contract constitutes the positive and unambiguous unequivocal acceptance required under Missouri law.”

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