The standards for determining when a party waives its right to arbitrate through participation in litigation have never been uniform among the circuits or easily applied writes John Lewis in BakerHostetler’s Employment Class Action Blog.

He discusses the recent Fifth Circuit opinion in Forby v. One Technologies, L.P., which illustrates the difficulty of applying the “prejudice” requirement in a consumer fraud and unjust enrichment class action.

In reversing a district court ruling, the appellate court highlighted some analytical problems that apply equally in the employment law context.

Read the article.

Like all contracts, operating agreements — which are celebrated for allowing business partners to freely define their relationship by contract — can be amended and modified, according to a post in The LLC Jungle.

Author Kevin Brodehl discusses a recent opinion from the Supreme Court of New York that illustrates how the process of amending an LLC’s operating agreement can sometimes be used to gain the upper hand in a dispute between members.

The case involves a majority of members amending the operating agreement to remove the manager and escalate capital calls.

Read the article.

The end of the year brings an onslaught of China Employer Audits, and with those audits comes an onslaught of China employment law questions, writes Grace Yang in the Harris Bricken China Law Blog.

She discusses some of the most commonly asked questions on China employment contracts and provides short answers to each of them.

The issues include using an English version of contracts, contract templates provided by Chinese labor authorities, termination of signed China employment contracts, open-term contracts, offer letters, and the need to review contract templates.

Read the article.

In an ABA Journal column, Bryan Garner explores the curiosity of “busts”—the prevalence of contractual provisions, sometimes perpetuated in deal after deal, that make no literal sense at all.

“That they exist at all is something of a marvel. After all, you’d think that transactional lawyers would adopt a protocol of reading and rereading each contract that goes out the door,” he writes. “Given that critical thinking and close reading are prized habits for lawyers, contradictory or outright nonsensical provisions should be exceedingly rare. Alas, they’re not.”

Garner discusses the dangers of flawed forms and word swaps, such as mixing up “lessor” and “lessee.”

Read the article.

When contracting with outsourcing firms, there is often a lot of dissatisfaction with the outcomes, says Kate Vitasek, a consultant and University of Tennessee faculty member. And that is because companies don’t get the contracting part correct.

She is quoted in a report in the Supply Chain Digest.

“Vitasek says she and other researchers at the University of Tennessee have uncovered a better, more user-friendly way of getting to a sound sourcing agreement,” according to the report. “That insight came after studying some of the most successful outsourcing agreements from such companies as Procter & Gamble, Microsoft and McDonald’s, in research funded by the US Air Force that lasted almost a decade.”

The article lists five rules for successful outsourcing contracts.

Read the article.

An arbitrator’s failure to disclose his longstanding business relationships with one of the parties requires setting aside the arbitration awards, the U.S. District Court for the Southern District of Texas ruled, according to Bloomberg Law.

Reporter Brian Flood writes that Patrick Long, part of a three-member arbitration team, heard a contractual dispute over joint oil and gas operations between OOGC America LLC and Chesapeake Exploration LLC. But the court found that Long lied when he “claimed that he did not have professional or social connections with the parties or witnesses.”

“In reality, Long was a long-time business partner of Yong Siang Goh, the board chairman of FTS International Inc., an affiliate of Chesapeake Exploration,” Flood writes. “In addition, Long failed to disclose that he had represented FTS as a lawyer, that FTS’s deputy general counsel was a former partner at his law firm, and that his law firm had employed Goh’s daughter.”

The court vacated the awards.

Read the Bloomberg Law article.

Paper Software will present a complimentary webinar on Contract Tools, an add-in for Microsoft Word, that analyzes, proofreads, formats, reviews, and navigates contracts for legal departments and firms.

The webinar will be Tuesday, Dec. 18, at 1 p.m. Eastern time.

On its website, Paper Software says Contract Tools analyzes a document for such elements as provisions, defined terms, cross-references, and more. Analysis takes about two seconds or less for most contracts, and the software updates its analysis instantly.

The process takes place on the user’s personal computer, rather than on a remote server, the company says.

Register or get more details.

The Texas Supreme Court has held that the discovery rule delayed the running of the statute of limitations on behalf of the holder of a recorded right of first refusal to purchase mineral interests, reports the Energy & the Law blog of Gray Reed & McGraw.

Gray Reed partner Charles Sartain explains: “The trustees sued the Tregellases for buying the minerals without allowing the Trust to exercise its ROFR, contending that a contract was formed when they sued more than four years after the Tregellases’ purchase; the suit was their acceptance of the right to purchase the minerals, they said.”

The appellate court held that the trust suffered an injury when the minerals were sold, but the discovery rule delayed limitations.

Read the article.

A discussion on the Troutman Sanders website addresses the current state of the law governing a key link to remote contracting — hyperlinks — with the goal of advising how to successfully incorporate by reference separate contract terms using hyperlinks for purposes of contract formation.

“In a series of recent decisions, courts are developing an increasingly consistent view of what is required to successfully incorporate contract terms by reference using hyperlinks,” write Alan Wingfield and Troy Jenkins. “This emerging consensus focuses on four elements: labeling of the hyperlink; the location and prominence of the hyperlink; the accessibility of the information hyperlinked; and the consumer’s assent.”

They discuss those four elements and offer a list of rules to do and another list of methods to avoid.

Read the article.

The first in a series of posts on royalty calculation and payment from Morgan, Lewis & Bockius focuses on issues related to defining the relevant scope of royalty calculations in an agreement.

“While the specific terms governing a royalty will vary based on numerous factors, including the nature of the products and the underlying licensed materials and the contemplated commercialization structure, many concepts are useful across the board.” according to the post’s authors, Mike Pierides and Eric J. Pennesi.

They discuss fixed amounts vs. percentage of revenue, gross vs. net revenue, revenue from initial sales and renewals and add-ons, specific revenue exclusions, and discounts.

Read the article.

General Data Protection Regulation requirements might look like a new bureaucratic threshold for doing business in the European Union. But sooner or later, a strict regulation in this area is likely to occur in every country, points out Vladislav Nekrutenko in an article for IoT Evolution.

The acceptance of the California Consumer Privacy Act 2018 and the Brazil Personal Data Protection Law are good examples in this regard, he explains.

His article details some steps that can help a company fulfill its obligations in contracts with third parties and mitigate risks regarding third parties’ data misuse.

Read the article.

Image by Nick Youngson

Lowndes, Drosdick, Doster, Kantor & Reed takes a look at commercial leases that provide a right of termination to only one of the parties to the lease. such agreements raise the question: “Is this really a contract if one party can walk away at any time?”

The author, James E. Walson, provides a short answer: Unilateral termination rights without any limitation or condition render a contract illusory and make that contract terminable by either party. If, however, the contract places minimal limitations on the unilateral termination, even if not rigorous or burdensome, the contract is not illusory and will be upheld.

“When drafting unilateral termination provisions that require minimal conditions to their being triggered, one should be cognizant that some condition or burden must be placed on the terminating party so as not to void the entire agreement,” Walson writes.

Read the article.

There may be certain circumstances based upon specific policy wording in a commercial general liability insurance policy in which there is coverage for an insured-employer for its vicarious liability arising out of the intentional and excluded conduct of its employees, writes Jeff Collins in an article for Jones, Skelton & Hochuli.

He discusses a case in which the words “the,” “an” and “any” have been assigned significant importance in the case law, and are also at issue in cases examining other liability exclusions.

In the case, a  court held that the phrase “any insured” in an exclusionary clause means something more than the phrase “an insured.”

Read the article.

A long-term care facility can execute contracts with many different vendors including food product and service vendors, laundry and linen providers, IT companies, and others, points out a post from Poyner Spruill.

“Whether working for a single-site operator or a multi-facility system, a thorough review of all contracts and a careful consideration of the ‘what-ifs’ are crucial steps,” write the article’s authors, Christopher S. Dwight and Iain M. Stauffer.

They discuss eight key tips to help with the process, including defining the contract, contract intake, the review process, determining who has authority to sign the contract, the length of the term, termination provisions, dispute resolution and venue, and maintaining the executed copy of the agreement.

Read the article.

ContractWorks has published a new guide:  Contract Management Software for the Small Legal Team: Why It’s Not Just for the Big Fish Anymore, to navigate contract management options so the right solution can be found.

The guide discusses:

• How small legal teams are benefiting from contract management software
• How new solutions are designed to be easy and affordable
• How customization and cloud storage means there’s software for every legal department
• How automation, AI and machine learning can elevate contract management

Download the free ebook.

In a new post on the Arbitration Nation site of Stinson Leonard Street, Liz Kramer has collected four recent decisions in which courts have found the parties’ dispute over the scope of an arbitration clause is not covered by their agreement.

Kramer considers the question: “Is this the new arbitration resistance? Some kind of “scope-a-dope,” in which courts that don’t take kindly to arbitration can hold up their hands and say ‘I accepted that the arbitration agreement was formed, and that it was valid, but under state contract law, I interpret this claim as outside the scope.’”

Read the article.

If you don’t want your emails to be binding contracts, don’t sign them, or better yet, don’t write them in the first place, warns a post in the Ohio Real Estate Law Blog of Kohrman, Jackson & Krantz.

The case involved the attempted sale of a high-end residential property in Ohio. The buyers argued that the sellers had agreed by a series of email exchanges (electronically signed) to sell their home to the buyers and that the sellers breached that agreement.

An appellate court remanded the case, explaining: “Given the circumstances surrounding the parties’ email exchange and later discussions, including that other terms of the sale had yet to be agreed upon, an issue of fact exists as to whether the parties had a present intention to be bound at the time of the email exchange, or whether the parties did not intend to be bound until execution of the more formal contract.”

Read the article.

While a commitment letter in the real estate lending process fleshes out any issues or misunderstandings between the parties prior to the preparation of the ultimate loan documents, it is important to be aware of some potential pitfalls and issues that it can present, warns Benjamin Bruner in a Dickinson Mackaman Tyler & Hagen web post.

The post outlines some of the dangers that cause problems for parties to the contract and then discusses some fundamental terms  that a commitment letter should include for the protection of the bank.

Read the article.

TCPAland reports on a reversal of fortune: The Northern District of Alabama has officially been reconsidered and reversed itself on a contractual consent decision.

The court originally ruled that the plaintiff “could not unilaterally revoke her consent to receive debt-collection calls because she agreed to provide that consent as part of a bargained-for exchange.”

The court revisited some of the authorities surrounding its original ruling, and decided that it was wrong, and that a consumer may freely revoke contractual consent unless some term in the contract limits that right. explains Shane Micheil of Womble Bond Dickinson.

Read the article.

A recent post on Robinson+Cole’s Manufacturing Law Blog discusses a recent court decision that underscores the need for manufacturers to exercise caution when seeking to impose post-employment restrictions on key employees.

Author Matthew Miklave explains that manufacturers often seek to bind employees to such restrictions (non-compete, non-solicitation and confidentiality obligations) in order to protect customer lists, pricing information and other confidential or “inside” information which gives them a competitive advantage in the market-place.

The case, Oxford Global Resources, LLC v. Hernandez, is an example of why these agreements must be carefully drafted to be effective when needed.

Read the article.