When dealing with contracts, new relationships, or even old ones a little extra scrutiny upfront can save significant amounts of money in the long-run, warns Jennifer McKevitt, writing for Supply Chain Dive.

“While some contract disputes can be settled easily, others erupt once bankruptcy enters the picture. Such was the case between GM and Clark-Cutler-McDermott (CCM), a longtime supplier of GM parts including acoustic insulation and interior trim,” she explains.

She discusses the case, in which CCM claimed to be losing $30,000 per day as a result of damaging contracts initiated by GM.

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Peter C. Vilmos of Burr Forman writes in an article published by JDSupra Business Advisor that contractors have several reasons to require that their high-level employees (e.g., C-Level) enter non-compete agreements.

“Non-compete agreements, or non-competition agreements, are contracts into which an employer and an employee enter that restricts the work the employee can perform for another company when the employee’s tenure at the employer company ends,” Vilmos explains. “Typically, it’s illegal to intentionally restrain trade; however, some states allow employers and employees to voluntarily enter into agreements with future employment restrictions.”

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A new JPMorgan Chase & Co. a learning machine  called COIN, for Contract Intelligence, is parsing financial deals that once kept legal teams busy for thousands of hours, according to a Bloomberg report.

The company uses the technology to interpret commercial-loan agreements that formerly consumed 360,000 hours of work each year by lawyers and loan officers. The software reviews documents in seconds, is less error-prone and never asks for vacation, writes Hugh Son.

“Made possible by investments in machine learning and a new private cloud network, COIN is just the start for the biggest U.S. bank,” Son explains. “The firm recently set up technology hubs for teams specializing in big data, robotics and cloud infrastructure to find new sources of revenue, while reducing expenses and risks.”

Read the Bloomberg article.

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Determine Inc. has posted a complimentary on-demand webinar titled “Getting Global in Your View of Contracts.”

The webinar features Tim Cummins, CEO of the International Association for Contract & Commercial Management. Other speakers are Kal Patel, senior director CLM Professional Services of Determine, and Constantine Limberakis, vice president of product marketing with Determine.

On its website, Determine says the webinar discusses what impacts the coming year will have, including how best-in-class companies use contract management to prepare for the increased volatility of an ever-changing global business environment.

The webinar covers:

• Changes impacting contract management and improving collaboration
• Addressing what organizations have done to pave the path for change
• The role technology plays in managing uncertainty

Watch the on-demand webinar.

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Contract Logix has published a research study, “Contract Management at Manufacturing Companies: Roles, Tools, Challenges, & Obstacles,” and made the study available for downloading.

On its website, the company says the study involved 550 contract management professionals across multiple segments of the manufacturing industry.

It covers:

• The management tools they most often use to manage contracts
• The most frequent challenges in contract management
• The biggest obstacles to obtaining a purpose-built solution for Contract Lifecycle Management (CLM)
• And many more insights about the roles and responsibilities of those who handle contracts at manufacturing companies

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New York-based Hogan Lovells is contemplating using blockchain technology to execute Smart Contracts, reports Eastern Daily News.

The story refers to reporting by The Wall Street Journal, which says the law firm is reviewing how this technology can eliminate many of the manual steps required to execute legal contracts. “This will have a positive impact on the firm in that it will be able to cut down its operation costs and at the same time be able free up lawyers’ time,” writes Peter Ngigi.

He continues: “Smart Contracts are technical in nature and hence will require lawyers who are professionally qualified and at the same time with the technical expertise to understand the code within the contract and figure out how they can work together.”

Read the Eastern Daily News article.

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Under California law, a provision of a contract found to impose a penalty is unenforceable as a forfeiture and contrary to public policy, explains Giselle Roohparvar of Miller Starr Regalia.

“The characteristic feature of a penalty is the lack of proportional relation between the forfeiture compelled and the damages or harm that might actually flow from the failure to perform under a contract,” she writes in the article posted by JD Supra Business Advisor. “Whether a contractual provision is an unenforceable penalty is a question of law subject to judicial determination. When parties are not careful, they risk having a bargained-for condition in their contract struck down as an unenforceable penalty.”

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eSignLive by Vasco will present a complimentary webinar titled “Digitize Your Business: Defining Your E‑Signature Requirements” on Wednesday, March 8, 2-3 p.m. Eastern time.

Guest speaker Craig Le Clair from Forrester Research will talk about the driving forces behind e‑signature adoption, both locally and abroad, and how to define e‑signature requirements.

This 60-minute presentation will address:

• The integrated components of a digital business

• What’s driving e-signature adoption in regulated industries

• B2E, B2B, and B2C e-signature use cases

• Defining key e-signature integration requirements

• Top e-signature evaluation criteria from your peers

All attendees will receive a complimentary copy of the recent Forrester report, Vendor Landscape, E‑Signature, Q4 2016.

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The recent California appellate ruling in Glen Provost v. Regents of the University of California sheds significant light on judicial views of written settlement agreements, writes Robert S. Luft in the JAMS ADR blog.

“For corporations, whether or not a settlement agreement can be enforced depends on who signs it. A corporation acts through its employees and agents and that raises the question of what employee or agent can bind the entity to Judgment enforcement.  This issue was partially answered in the Provost case.” Luft explains.

It’s best to err on the side of over qualification of a corporate employee representative to sign a settlement agreement to ensure it will be enforceable, advises Luft.

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Comprehensive due diligence review of any target company that performs government contracts should include evaluation of five broad categories relating to general business matters, Kimi Murakami writes in Part II of a report on Piliero Mazza‘s PM Legal Minute blog.

She discusses key issues to be considered when performing due diligence in M&A transactions for government contractors.

The topics include entity formation basics. registrations and permits, employee related matters, intellectual property related matters, and financial and other business related matters.

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Read Part I.

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Dentons has published the latest edition of its “Government Contracts Legislative and Regulatory Update,” a summary of the relevant changes that took place during January.

Highlights of the report include:

• President Trump orders regulatory freeze pending review
• President Trump’s executive actions and their impacts on the government contracting community
• FAR Council issues final rule prohibiting contracting with firms that require confidentiality agreements restricting disclosure of fraud or abuse

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Tolling agreements are a common feature of the energy industry. Through these agreements, a buyer will supply fuel to an electric generator and, in return, the generator will provide power back to the buyer, according to an article posted on the website of Hogan Lovells.

But a court recent ruled that such a tolling agreement, when entered into between companies that intended to merge, violated the Hart-Scott-Rodino Antitrust Improvements Act of 1976, leading to the imposition of significant financial penalties against the buyer.

“Parties that have or may have an interest in acquiring the other party to the agreement must be careful to avoid assuming beneficial ownership of the target before complying with the HSR Act’s reporting requirements if HSR notification would be required,” the article says. “Failure to do so may result in the tolling agreement being construed as evidence of gun-jumping and the acquiring person being subject to significant penalties of up to $40,654 per day for noncompliance.”

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Management’s standard response when an employee says they’re leaving the company is to walk that worker out the door immediately. But James Pooley writes on Orrick, Herrington & Sutcliffe LLP‘s website that the standard approach could put confidential information at risk.

“When you first learn of a departure, you are engaged in triage with two parallel priorities: find out what’s going on, and lock down the evidence,” he advises. “In most circumstances that may give you time for an initial meeting to get some details and perhaps try to turn the situation around. But you also have to be ready immediately to take actions that guarantee you get control over your data.”

Pooley provides a detailed exit interview checklist that covers possession of data and any restrictive agreements that will govern the departing employee’s behavior in his new job.

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The Ninth Circuit, in an unpublished opinion, has found that a contract, and therefore an arbitration clause within it, was unenforceable due to fraud in the inception, despite the fact that both parties had ample opportunity to review the contract in its entirety, reports Reinsurance Focus, a publication of Carlton Fields Jorden Burt, P.A.

“This result was required, the court found, because, assuming the allegations of the complaint to be true, the plaintiff did not know that by signing the contract it was agreeing to be a victim of defendants’ scheme,” writes Jason Brost.

The court cited a California Court of Appeals decision for the proposition that it was enough that defendants, as the party drafting the contract, drafted the contract “‘in such a way as to not apprise’ the other party of its intentions.”

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In a pun-laden opinion, the Eleventh Circuit Court of Appeals affirmed a district court’s ruling that the Kardashian sisters Kim, Kourtney and Khloe could not rely on the doctrine of equitable estoppel to compel plaintiff Kroma Makeup EU, LLC to arbitrate its claims, reports TheTMCA.com.

Those claims involved allegations of trademark infringement and tortious interference with contract.

As the court put it, “there is a wrinkle in this case:  the arbitration clause which the non-party to the agreement is seeking to enforce is explicitly limited to disputes between the parties.”

TheTMCA.com reports:

The Eleventh Circuit first clarified that although federal law generally governs arbitration agreements, the “issue of whether a non-signatory to an agreement can use an arbitration clause in that agreement to force a signatory to arbitrate a dispute between them is controlled by state law,” and that the parties “agree that Florida law controls on that issue.”

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It’s important for parties entering into any significant economic transaction to have written contracts. This is especially true for construction projects which are, by their nature, complicated, writes Jason T. Strickland for Ward and Smith, P.A.

A contract on a construction project sets forth the parties’ obligations to each other and determines how risks will be shared or divided on the project.

Strickland explains the value of having a written construction contract, rather than simply an oral agreement. Then he discusses risk shifting, parties to a construction contract, key elements of a construction contract, consistency, flow down and tiers, and industry forms.

Read the article.

Comprehensive due diligence review of any target company is imperative when determining whether to buy another company, writes Kimi Murakami for Piliero Mazza.

“Layer on the fact that the target company has government contracts then several unique issues must also be critically evaluated when performing due diligence. Failure to do so could result in a significant loss in value of the target – and its contracts – after the acquisition has closed. What follows is a list of certain key issues that should be analyzed when engaging in due diligence review of a government contractor,” she explains in an article in the firm’s PM Legal Minute blog.

The article covers subjects such as set-aside contracts, pending proposals, security clearance, import/export issues, oci issues, subcontracts, non-us buyer, and novation.

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A family business’ significant commercial relationships are usually reflected in written agreements, writes Michael P. Connolly in Murtha Cullina LLP’s Family Business Perspectives blog. But who is authorized to sign those agreements and to bind the company to the terms?

“Typically, a company’s management will have actual authority to sign agreements,” Connolly explains. “However, the company may give the impression to third parties that other employees (for example, purchasing agents, account managers and IT personnel) that those employees have ‘apparent’ authority to sign contracts relating to their areas of responsibility and thus bind the company to agreements. It is therefore important for family business owners and management to clearly instruct their employees and agents – and to communicate to third parties – as to whether those employees or agents are authorized to sign contracts and other important documents on the company’s behalf.”

Connolly describes a recent court decision that highlights the confusion and potential for liability that can arise when an employee signs a document on a company’s behalf without express authority to do so.

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With international and domestic supply chain contracts, there is little or no room for error. according to an article posted by a team of lawyers at Foley & Lardner LLP.

“While some supply chain contracts incorporate negotiated provisions in the form of a letter agreement or long-term agreement, many supply chain contracts rely on standard purchase order terms and conditions. This can result in contracts of considerable value and corresponding high risk receiving  little attention from in-house or outside counsel,” they write.

They offer advice on how to manage supply chain contract risk, supply chain contracting in light of regulatory changes, and international contracting.

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Attorney Barbara Dunn O’Neal and Lance Ewing, executive vice president Global Risk Management & Client Services at Cotton Holdings Inc., recently discussed some of the basics of contract drafting when they spoke at a meeting of professional meeting planners.

MeetingsNet.com reported on their presentation, including a discussion of some of the basic terms used in contracts.

The speakers also discussed the importance of updating contracts and insurance related to meetings.

And they wrapped up with “the drone horror story.”

Read the article.