The Fifth Circuit has affirmed an order compelling arbitration, despite the fact that the parties seeking to compel arbitration were not signatories to the relevant arbitration agreement, according to a post on Carlton Fields’ Reinsurance Post.

Jason Brost explained that the case involved a real estate sale contract that contained an arbitration agreement under which the parties agreed to arbitrate any disputes “in accordance with the Comprehensive Arbitration Rules and Procedures administered by J●A●M●S/Endispute.”

The plaintiff claimed that the defendants in the case induced the buyer to enter into the 1998 agreement based on the false premise that he would get a properly constructed home. The defendants, who were non-signatories to the agreement, moved that the arbitration clause be enforced.

The appellate court found for the defendants.

Read the article.

Nearly $4 million in fees are at stake in a California Supreme Court fight between a big law firm and a big client over broad advance conflict waivers the firm used in its client engagement letters, according to Bloomberg Law.

Reporter Joyce Cutler explains that Sheppard Mullin Richter & Hampton LLP was “disqualified from representing J-M Manufacturing Co. Inc. in a $1 billion qui tam action because the firm concurrently represented one of the hundreds of defendants in an unrelated matter. The state appeals court held the advance conflict waiver J-M gave Sheppard Mullin didn’t absolve the firm of its duty to tell J-M about the specific conflict once it came to light.”

The question for this case of first impression is whether a law firm needs to tell a sophisticated client about a specific conflict when it arises, or whether the firm can instead rely a boilerplate advance conflict waiver in the client’s engagement agreement.

Read the Bloomberg article.

Morgan Lewis authors, writing in the firm’s Tech & Sourcing blog, discuss how patent, copyright, and trade secret ownership works in the United States if there is no agreement in place to allocate these rights.

Striking an interest provision from a draft subcontract wasn’t enough to keep a party to the agreement from being required to pay interest, according to a review of a Missouri case by Jane Fox Lehman in Pepper Hamilton’s Constructlaw blog.

When the general contractor later failed to pay the subcontractor, the sub sued and won a verdict that included prejudgment interest at the rate of 9 percent pursuant to Missouri law. The general contractor appealed.

Lehman explains the outcome: “The court held that it could not consider the stricken interest provision because it was extrinsic evidence. ‘The rationale,’ it explained, ‘is that the writing excised from the agreement, whether by way of striking, erasing, or simply transferring the agreement to a new piece of paper without the stricken language, is not part of the agreement between the parties.’”

Because the parties had failed to reach an express agreement on an interest rate, the trial court’s ruling was upheld.

Read the article.

When considering entering into a non-disclosure agreement between two commercial entities, the first question to ask is whether it is necessary for either party to be disclosing confidential information, writes Kathleen Wegrzyn in Foley & Lardner’s Manufacturing Industry Advisor blog.

She writes that the best way to protect your confidential information is to not disclose it at all, if it is not necessary for the transaction.

But “when entering into an NDA, a party should carefully consider the scope of the definition of ‘Confidential Information,’ pay close attention to the non-use and non-disclosure provisions, include a confidentiality period and a provision providing for the return of the Confidential Information, and ensure that no terms other than those related to confidentiality are included in the NDA,” according to Wegrzyn.

Read the article.

Trademark licensing disputes can present thorny issues at the intersection of contract and trademark law, warns an article in the
Dorsey & Whitney LLP blog TheTMCA.com.

“And when the dispute involves the Trump brand for residential buildings, the adjudication of rights and obligations under a trademark license agreement can become national news,” write Sandra Edelman and Dan Goldberger.

In Residential Committee of the Board of Managers of 200 Riverside Boulevard at Trump Place Condominium v. DJT Holdings LLC, the court held that the 200 Riverside Building was not required to use the Trump name on the façade of the Building.

The court agreed with the Condo Board that there are “no obligations or requirements in the license agreement for the building to carry the name ‘Trump’ on it in perpetuity.”

Read the article.

eSignLive by Vasco has published a paper discussing how to mitigate legal risks of electronic signatures and increase enforceability by leveraging e-signatures when moving business processes online.

The paper can be downloaded from the company’s website at no charge.

The ESIGN act, recognizing the legal validity of electronic signatures, has been in effect for over 10 years. It governs the minimum requirements for legal electronic and digital signatures. Moving business process online and leveraging e-signatures is not entirely without risk.

This paper outlines the top six legal risks to be aware of, and how to prevent fraud, repudiation and increase admissibility and compliance when executing transactions digitally.

The company says a well-designed process, supported by electronic signature technology, can actually reduce the legal risks and increase the enforceability of e-transactions compared to paper processes.

Download the paper.

SecureDocs has introduced NDAworks, which is designed to help companies manage non-disclosure agreements.

The company says on its website that NDAWorks helps manage the signing, tracking and storing of a company’s NDAs from a central, secure location.

By utilizing agreement templates, built-in electronic signature, and custom document tagging, a legal team can save time and remain in control of every single NDA issued by the organization, the developer says.

The company is offering a free 14-day trial.

Learn more about NDAworks.

Gauri Prakash-Canjels, Ph.D. has joined Litigation Economics, LLC as a principal in its Washington, DC office.

In a release, the firm said Prakash-Canjels has worked on more than 150 cases, including intellectual property, antitrust, breach of contract, natural resource damages, personal injury and other matters. She is a seasoned expert and has served as an expert in federal and state courts as well as mediation and the Federal Trade Commission hearings, according to the firm.

Prior to being a principal at Litigation Economics, Prakash-Canjels was a consulting director at Brewer Attorneys and Counselors (formerly, Bickel and Brewer). She was a managing director and founding member of GreatBridge Consulting, Inc. Prior to founding GreatBridge Consulting in 2012, Prakash-Canjels was a principal at The Kenrich Group, a national business and litigation consulting firm.

Her background includes academic, corporate, economic consulting, and non-governmental organization positions.

Michelle E. Litteken of PilieroMazza PLLC writes that releases have proven to be the double-edged sword of government contracting.

“In some cases, a release can prevent a contractor from successfully submitting a request for equitable adjustment or a claim to the Government,” she explains. “At the same time, a prime contractor can use releases to its advantage—requiring a subcontractor to sign releases during performance and at contract closeout. These releases can be used to easily defeat subsequent subcontractor claims if a dispute arises. Contractors should be familiar with releases in both contexts and use this knowledge to make releases work to their advantage.”

Read the article.

The language in a forum selection clause is critical if you want to ensure that potential litigation takes place on your “home court,” writes Shep Davidson in the Burns Levinson In-House Advisor blog.

“Indeed, as the defendants in Genis v. Campbell recently learned, having a less than all-encompassing and precise forum selection clause can lead to unintended results,” he writes.

Defendants in that suit tried to invoke a forum selection clause in a license agreement and in an employment agreement that would have kept the litigation in Ohio, but the plaintiff prevailed in having the case processed in Massachusetts. The Superior Court found that the suit seeks redress for alleged misappropriation of intellectual property, not covered by the two agreements.

Read the article.

Because there is no single definition of what circumstances are force majeure, parties to a contract must agree upon what will be considered force majeure for purposes of that contract, advises Elizabeth A. Whitman for Whitman Legal Solutions, LLC.

Writing in the Whitman blog, she says that the parties should work with their attorneys to determine what types of circumstances should be listed given the nature of the specific contract.

“Parties to a contract generally agree that it isn’t fair to require performance of a contract in accordance with its terms if certain uncontrollable or extraordinary situations arise.  Therefore, many contracts include in them what are known as ‘force majeure clauses,’ which relieve all parties to a contract from performing under certain extraordinary circumstances,” she explains.

She lists some examples of conditions that might be included in a definition of force majeure.

Read the article.

In an important new en banc opinion, the Fifth Circuit has abandoned its historic criteria for determining whether a contract relating to servicing oil or gas drilling on navigable waters is controlled by maritime law in favor of a “simpler, more straightforward test,” reports Duane Morris LLP.

Jospeh J. Pangaro writes that courts in the Fifth Circuit historically applied a six-factor test to determine whether a contract is governed by maritime law, as articulated in Davis & Sons, Inc. v. Gulf Oil Corp..

“Taking the lead from the Supreme Court’s ruling in Norfolk Southern Railway Co. v. Kirby, 543 U.S. 14 (2004), the Fifth Circuit departed from the six-factor test used in cases like Davis & Sons in favor of a new, stream-lined two-pronged test to determine whether a contract like the one at issue was maritime in nature,” Pangaro writes.

In his article, the author discusses the new test.

Read the article.

In a post at Construction Law Musings, Melissa Dewey Brumback writes about updates to the American Institute of Architects standard form contract documents.

Dewey, a construction law attorney with Ragsdale Liggett in Raleigh, North Carolina, discusses the top 10 changes.

Those changes include differing site conditions, owner’s right to carry out the work, direct communication between the owner and contractor, contractor’s means and methods, notice provisions, notice related to evidence of owner’s financial arrangements, liquidated damages, dates of commencement and substantial completion, termination for convenience, digital data, and insurance

Read the article.

Contracting in the context of subcontractors, outsourcing, and privacy and security laws can be fast-paced, complex, and onerous, warns Katila Howard in Foster Swift Collins & Smith’s Biztech Law Blog.

“Like most contracts, complications do not typically arise until there is a breach. Furthermore, in the context of cybersecurity and outsourcing, the cost of a contractual breach can increase drastically depending on whether the incident occurred in the context of a security breach and the associated reporting requirements,” she writes. “Accordingly, drafting your own checklist and standard provisions that satisfy your company’s privacy and security requirements in advance can save time and money in the future.”

She provides a list of recommended subjects to cover in vendor agreements.

Read the article.

Fisher & Phillips LLP reports that a delivery driver for gig economy company DoorDash has been ordered by the 5th Circuit Court of Appeals to take his misclassification case to a private arbitrator instead of court pursuant to a valid arbitration agreement he entered into.

“The April 25 decision is a solid win for gig employers and could provide a template for how other similar businesses should structure their own arbitration agreements,” writes Richard Meneghello.

Delivery drivers for DoorDash are classified as independent contractors, but one driver filed suit, claiming wage and hour violations, and sought conditional class certification.

“If there is an agreement to arbitrate with a delegation clause…, we will consider that clause to be valid and compel arbitration. Challenges to the arbitration agreement as a whole are to be heard by the arbitrator,” the 5th Circuit said.

Read the article.

A federal district judge in Chicago has dismissed a non-compete case—at the pleading stage—finding that the non-competition covenant at issue was overbroad, as a matter of law, according to Winston & Strawn.

The firm’s post says that the judge ruled because the covenant restricted the employee from taking any position with another company that engaged in the same business as the employer, without regard to whether that position was similar to a position the employee held with the employer, or was otherwise competitive with the employer.

The case is Medix Staffing Solutions, Inc. v. Dumrauf.

Read the article.

A former client of Perkins Coie and Bracewell has filed a malpractice suit against the two firms, claiming they led it into a contract that failed to protect its interests in a deal with Morgan Stanley.

Above the Law explains that plaintiff Electron Trading wanted to license its technology for spread trading — which allows investors to buy and sell securities simultaneously in an effort to capture price difference between financial instruments — to Morgan Stanley. Electron wanted the deal to include language limiting Electron’s liability for third-party intellectual property claims and maintaining their right to sue Morgan Stanley in the event of a contract breach, writes Kathryn Rubino.

The final agreement, however, did just the opposite, Electron claims.

Read the Above the Law article.

It is easy to skim over contracts’ insurance provisions or simply defer to risk experts, but there are a few questions that should be considered during the next review of the insurance section of a contract, advises Morgan, Lewis & Bockius LLP.

The article by Michael L. Pillion and Jessica M. Pelliciotta discusses four such questions:

How do your indemnification and other risk allocation provisions interact with your insurance provisions?

What types of insurances and how much coverage should you require?

Will you know if there are changes to the insurance coverages?

Does your contract require the other side’s insurer to provide a waiver of subrogation?

Read the article.

The Antitrust Division of the U.S. Department of Justice recently announced a settlement of criminal charges against Knorr-Bremse AG and Westinghouse Air Brake Technologies Corp. for having maintained agreements not to compete for each other’s employees, according to Locke Lord.

Authors Stephen P. Murphy and Joseph A. Farside Jr. write that one executive went so far as to state in an email that no-soliciting was a “prudent cause for both companies” and that the companies would “compete in the market.”

In announcing the settlement, an assistant AG noted that the criminal complaint was part of a broader Antitrust Division investigation into agreements not to compete for employees, typically known as no-solicit or no-poach agreements.

Read the article.