A decade-long construction defect battle involving a South Padre Island, Texas, luxury condominium complex damaged during Hurricane Dolly has been resolved in a take-nothing defense win secured by attorneys of the West Mermis law firm for the general contractor, G.T. Leach Builders.

The condominium developer, Sapphire, initially sued its insurance brokers for negligence for allowing the builder’s risk insurance policy to expire, leading to claims for extensive damage to the Sapphire condominium project from the 2008 storm. Nearly three years later, G.T. Leach and several of its subcontractors were added to the $30 million lawsuit.

The trial team, led by Lawrence J. West, presented evidence proving that the developer’s allegations of multiple breach of contract claims were unsupported, according to the firm. They demonstrated that the contract contained express provisions that prevented the Developer from recovering the $30 million it was demanding.

Read details of the case.

A recent unpublished Michigan Court of Appeals opinion provides some guidance with respect to the architect’s and engineer’s common law duty when processing pay applications, according to a post on the website of Clark Hill.

Jeffrey M. Gallant and Scott D. Garbo explain that the court held that the owner of a construction project could not maintain a professional negligence claim against the architect for failing to adequately review payment applications.

“While you may only have a contract with one of many project participants, Michigan courts continue to elaborate on the potential obligations owed to all other participants, including architects, engineers, contractors, subcontractors, owners, and lenders,” they write.

Read the article.

Blockchain technology is now being used to build tools and infrastructure that help lawyers draft contracts, record commercial transactions, and verify legal documents, reports Jasmine Ye Han in an article for Bloomberg Law.

She writes about the increased efficiency and uniformity blockchain can provide in contracting, its used in other legal documents, the skills and role of lawyers in blockchain, and the challenges ahead for the technology.

Read the article.

Glenn West, writing in Weil, Gotshal & Manges LLP’s Global Private Equity Watch, writes about a case in which a cut-and-pasted forum selection clause from an unrelated contract made its way into the wrong document.

The cut-and-pasted text declared that “any action pertaining to this agreement shall be the State of Illinois.” When the plaintiff sued the defendant in Florida, where the defendant’s headquarters were located, the defendant moved to dismiss on the basis that the contract required choice of Illinois as the forum.

The Florida appellate court said that mandatory forum selection clauses mean what they say, even when what they say was the result of a supposed cut and paste error. Accordingly, the case was dismissed for being filed in an improper forum.

West sees the ruling as good news for the careful transactional lawyer and bad news for those who fail to draft a bespoke clause.

Read the article.

Pepper Hamilton LLP’s Constructlaw blog discusses an Ohio case in which a plaintiff sued a building company and attempted to have the arbitration clause in a construction contract declared unenforceable.

The contract identified the builder in the case by a name that was a fictitious name for a similarly named company and was not registered with the Ohio secretary of state, writes Emily D. Anderson. The trial court denied plaintiffs’ motion to invalidate the arbitration clause.

The appellate court agreed with the trial court, observing that the builder did not initiate the action but was merely defending it.

Read the article.

Recent technological developments like artificial intelligence (AI) are now helping companies overcome many of the challenges to contracting, points out Beverly Rich in an article posted in the Harvard Business Review.

“The use of AI contracting software has the potential to improve how all firms contract – and it will do so in three ways: by changing the tools firms use to contract, influencing the content of contracts, and affecting the processes by which firms contract,” she writes.

She adds that – right now – AI contracting tools may offer the most value to companies with large volumes of contracts by reducing time spent in review and drafting. But as the technology develops, it will one day be useful to all firms.

Read the article.

A recent ruling  is a powerful reminder that the broad freedom of contract that Delaware law accords entities such as LLCs offers both the promise of great latitude to contracting parties and the threat of serious pitfalls for parties that fail to carefully protect their interests in the agreement, according to a post on the website of Cadwalader, Wickersham & Taft.

The decision also underscores the limits on an implied covenant breach claim under Delaware law.

The authors offer some takeaways from the ruling, discussing in detail:

• The implied covenant of good faith and fair dealing as applied in Delaware does not operate to rewrite contract simply because regretful plaintiffs wished they had negotiated a better or different deal
• The negotiated, mutual waiver of fiduciary duties narrows the already slim chance a Delaware court will apply the implied covenant of good faith and fair dealing
• Waiver of fiduciary duties, conditioned on a sale to an unaffiliated third party, granted the board unfettered discretion to determine the marketing and structure of the company’s sale
• Plaintiffs offered no reason to believe defendants’ conduct frustrated their reasonable expectations
• The court highlighted certain conduct that may be sufficiently egregious to implicate the implied covenant in similar situations

Read the article.

An agreement between two parties involved in an international contract may involve a mechanism, known as the “home country” provision, that provides that the party initiating arbitration must sue the other party in its home country.

A post of the website of Skadden, Arps, Slate, Meagher & Flom explains that “proponents of such clauses say they provide a disincentive to elevate disputes because a party will be reluctant to go to the other side’s home country. Though they are not widely used in large transactions (and are not recommended in arbitral literature or by arbitral institutions), they are occasionally present.”

The authors discuss two cases that illustrate that “home country” arbitration clauses may prove cumbersome to administer in practice and may result in unintended consequences for the parties.

Read the article.

By Eric Begun
King & Fisher Law Group

As confirmed in a very recent Wall Street Journal article, the legal impacts and effects of using emojis and emoticons in business and workplace communications and dealings are growing. For attorneys, contract professionals, and business executives and teams discussing, negotiating, and communicating about technology, business, deals, and transactions, the use of emojis (pictographs) and emoticons (punctuation marks, letters, and numbers) should be a concern.

Depending on the circumstances, using an emoji or emoticon to respond to another party’s email or message may have the same effect as if precisely crafted words had been used. Unless the author of the email or message is careful, casually sending a 👍, :-), 👌, or ☺ in response to an email putting forth a proposal or offer to do business may be the same as stating, “I agree to your terms.” At a minimum, replying to a message with an emoji may convey contractual intent. Bottom line, before using emojis or emoticons in emails and other communications, it is critical to consider how they may be received or interpreted.

The use of emojis clearly is on the rise. In its November 2016 report, Emogi reported that 2.3 trillion messages incorporating an emoji would be sent in 2016 – and the report did not include the use of emojis in emails. In addition, the Unicode Consortium recently announced that 157 new emojis have been added in 2018, bringing the total number of standard emojis to 2,823. As more of the business world adopts technology to communicate, it becomes more important for business leaders, procurement and purchasing professionals, and others to be mindful of their use of emojis and emoticons in emails, texts, and other message formats. To those businesses and companies that have “careful communications” policies, has your policy been updated to address the use of emojis?

Aside from general contract concerns, the use of emojis has and will increasingly impact parties’ legal rights and obligations. This includes in the areas of labor and employment, promissory estoppel, jury instructions, and criminal cases. According to research by Santa Clara University law professor Eric Goldman, for the set of reported cases that he was able to identify as mentioning “emoji” or “emoticon” over the 2004-2016 period, over 30% of the cases were from 2016, and nearly 50 were from 2015 and 2016.

And, if you needed another reason to be overly cautious when using emojis and emoticons in correspondence and communications, be aware that the true meaning attributed to any particular emoji may be vague, at best, or non-existent, at worst. Moreover, the form and appearance of the emoji you send may not be the same as the form and appearance seen by the recipient. In addition, different cultures, generations, and geographic regions interpret emojis differently. (The most confusing emoji? It’s 🤗.)

The reality is that emojis are easy to use and can be fun and communicative. They are, and will continue to be, used in emails, texts, and communications between and among business parties, their advisors, and others. Just be sure to 👀 before you 🏃.

In addition to maintaining general policies prohibiting sexual harassment, employers may choose to implement workplace romance policies outlining permissible and prohibited conduct concerning dating among co-workers, points out Ashley Robertson Parr in a web post for Nexsen Pruet, LLC.

“Companies often prohibit relationships between employees in supervisory/subordinate roles, given the inherent issues that arise,” she writes. “Other companies disallow relationships between employees and clients/vendors. Another option is to require employees to inform management of workplace relationships. Regardless of the specifics, such policies should reference the company’s anti-harassment policy and remind employees how to report unwanted conduct.  In addition, employers must be diligent in making sure that the policies are enforced fairly and without a disparate impact.”

Her article covers implementing policies addressing workplace relationships, what love contracts are, and the fact that love contracts are not cure-alls.

Read the article.

Amending agreements is a common practice with managed service providers (MSPs) and companies involved with software licensing and companies that provide professional services, according to a blog post on the website of Kirkpatrick Law.

Even the best agreements can require amendments based on changes in law, technology, and the products or services provided.

The post discusses some examples of ways to amend contracts, including delete and replace, from and to, and a revised agreement.

Read the article.

A case heard by the National Labor Relations Board discusses the law concerning the legal duty to reduce a collective bargaining agreement to writing, and then sign it, according to a post on the Proskauer Labor Relations Update.

Partner Mark Theodore explains:

“Among other things, a signed agreement serves as an absolute bar to employees filing a decertification petition during the term of the agreement (with some timing limitations), while an unsigned agreement does not bar such a petition. A signed agreement also, obviously, is more easily enforced as it signifies to the entire world that this is the deal, and that the parties signed it after evaluation of its terms.”

Read the article.

In what appears to be a first-of-its-kind ruling, the District Court for the Southern District of New York recently concluded that a federal district court has the authority to vacate an arbitrator’s class certification award based on the due process rights of absent class members, according to a post on the website of K&L Gates.

The ruling involves the long-running Jock v. Sterling Jewelers, Inc., in which the district court and the Second Circuit Court of Appeals have rendered multiple decisions addressing the proper role of a court in reviewing an arbitrator’s authority to determine whether parties have agreed to class arbitration.

The K&L Gates authors explain that the Jock court determined that, absent an express class arbitration provision in each putative class member’s arbitration agreement, an arbitrator does not have the authority to bind absent class members to a class judgment—even if they signed the same form of arbitration agreement as the named plaintiffs.

Read the article.

Image by U.S. Coast Guard

A Steptoe & Johnson article takes a look at the way additional insured coverage under an insurance policy is analyzed when there is an underlying drilling contract limiting the additional insured coverage to the scope of the liability assumed in the service contract.

The article in The National Law Review discusses In re Deepwater Horizon, a Texas Supreme Court case that governs allocation of risk, assumed liabilities, and the granting of additional insured status in underlying service contracts, and the precedent the case established.

The article also considers some other cases that were litigated after the Deepwater Horizon case.

Read the article.

Determine Inc. has posted an on-demand webinar describing how real-life company challenges morph into ideas and concepts for contract management innovations and predicting what companies are looking for in 2018.

In the video, Tim Cummins, CEO of IACCM, Sean Delaney, vice president of sales at Determine, and Mike Behne, head of implementation at Determine, explore the issues that are top of mind and discuss exactly the role technology can play to exceed expectations.

Topics include:

• What prospects and customers are talking about in terms of pain points and wish lists
• How to leverage CLM to manage third-parties and mitigate risk
• How shared data and business processes solve business problems
• Industry trends and enterprise expectations in 2018

Watch the webinar.

More than one-third of the U.S. workforce is bound to their employers by a non-disclosure agreement, or NDA, according to a Harvard Business Review report this week, which cites figures from a research paper published last year in the Vanderbilt Law Review.

Amy X. Wang, writing for Quartz at Work, says the contracts have been steadily growing in both number and breadth as companies grow warier about competition and proprietary material.

She adds that the problem has spread to cover personal harassment, to the point that many have questioned whether NDAs can end up enabling abusers.

Read the article.

Above the Law examines a case in which a district court and a lawyer got into trouble with the 11th Circuit when the lower court took the lawyer’s advice not to apply the circuit’s ruling in a remanded case.

Kathryn Rubino explains that the dispute dates to 2011, when Winn-Dixie grocery store company sued more than 100 dollar stores for violating exclusivity provisions in their lease agreements. The 11th Circuit ruled in the appeal and sent the case back to the district court for application.

The problem arose when lawyers for the dollar stores persuaded the district court not to apply the ruling.

The judges singled out Troutman Sanders lawyer Brian P. Watt for statements urging the lower court not to follow the circuit’s mandate.

“Needless to say (or maybe not), a district court cannot amend, alter or refuse to apply an appellate court’s mandate simply because an attorney persuades the court that the decision giving rise to the mandate is wrong, misguided or unjust,” the panel said.

Read the Above the Law article.

Orly Lobel, writing in the Harvard Business Review, believes that nondisclosure agreements, or NDAs, chill competition, through expansive definitions of what must remain confidential and proprietary, reducing the ability of a discontent employee or an employee working in a hostile work environment to go elsewhere.

“Importantly, as recent studies show clearly, preventing workers from using their knowledge and skills beyond a single workplace is harmful not simply to the worker but to entrepreneurship, competition, and economic growth,” she writes.

Lobel believes that legislatures and courts should look toward imposing penalties on overreaching contracts and rendering any contract with unenforceable scope void in its entirety.

Read the article.

A Sixth Circuit ruling in a recent case shows that an employer’s notice of its institution of a mandatory arbitration policy or program is, without more, insufficient to compel an employee to arbitrate a subsequent dispute, writes Gilbert Samberg in Mintz Levin’s ADR: Advice From the Trenches blog.

He explains that something more is required in order to be able to infer the employee’s knowing assent to the new term of employment. The new “Employment Dispute Resolution Process” (EDRP) was promulgated after the plaintiffs had commenced employment.

Samberg writes that the appellate court “determined that the employer’s failure to notify the employees expressly that ‘they would accept the terms of the EDRP by continuing their employment’ was a critical omission, and thereupon held that the employees had not manifested knowing assent merely by continuing to work at FCA.”

Read the article.

eSignLive by Vasco has made available a new report: “Forrester Report: The State Of E-Signature Implementation: Twenty-Five E-Signature Use Cases Show Adoption Trends,” which can be downloaded from the eSignLive website at no charge.

The Forrester Report examines 25 e-signature implementations across the United States and Europe with use cases for receivables, payables, various contracts, onboarding agreements, and travel bookings – uncovering trends in adoption, authentication, and business results.

The report covers:

• The average implementation time for e signature projects
• Reported ROI metrics from each project
• Top challenges, from browser compatibility to user training
• How solution flexibility mitigates complexity
• Biometric authentication trends
• Innovation in mobile signing

Download the report.