A blog post on the Cooley M&A site discusses the “option to acquire” structure, which addresses both the needs of a target company to develop a product or business on the one hand and the desire by a buyer to identify growth opportunities on the other.

“In an option to acquire transaction, the buyer agrees to pay the target an option fee in exchange for the exclusive option to acquire the target for a fixed price during an option period subject to certain conditions and agreements that are set forth in a fully negotiated and executed acquisition agreement,” the post explains. “As part of the arrangement, the parties may also enter into a collaboration agreement covering certain development activities of the target during the option period, with the achievement of the developments functioning as milestones to the buyer’s ability to exercise its option to buy. The collaboration agreement is usually separate from the option and acquisition agreement. Sometimes, the specific terms of the option may also be set forth in a standalone option agreement that is separate from the acquisition agreement.”

While options to acquire are fairly common in the medical device and life sciences industries, the option also provides attractive opportunities for funds and companies in other industries as well, as a way to get an inside track on new technology, the firm writes.

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Contractual provisions for liquidated damages, indemnification, or other limitations on liability are a few of the most commonly used “damage control” tools, points out Theresa Y. Kananen for Arnall Golden Gregory LLP.

“In too many cases, however, drafting errors transform the very provisions intended to provide for clear-cut remedies, or clear-cut limitations on remedies, into sources of prolonged and expensive litigation,” she writes.

She lists and discusses three of the most common pitfalls to avoid when using one of these “damage control” provisions in a contract, including liquidated vs. actual damages, indemnity clauses and conspicuous limitations.

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Contract drafting is one of those subjects that just doesn’t get the attention it deserves, write Edward J. Hansen and Christopher C. Archer of Morgan Lewis, in the firm’s Sourcing@MorganLewis blog.

“Contracts for complex sourcing deals are problematically big and often written in a style that doesn’t speak to the people who should be reading them,” they write. “The language may be great if the reader is a judge, but there is a very small probability that a judge will ever see the contract. So, the challenge is to write a contract that can work for a judge but that primarily works for a business user.”

They offer some of their favorite tips for drafting a readable contract.

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The Court of Appeals in North Carolina recently confronted the question of what happens when a contractor and subcontractor, having gone back and forth on a few contract terms while the sub is performing work, reach the end of the project – or at least the end of the sub’s work – without an agreed contract form. Stan Martin discussed the issue in a recent article posted on Commonsense Construction Law’s blog.

“Parties who allow the schedule to control performance without resolving the paperwork could find themselves in a mess, particularly if the back-and-forth on contract terms never stops,” Martin writes. “The sub is unhappy about not being paid, and the GC is unhappy about what it perceives to be a less-than-friendly forum. (Or maybe the GC simply wants the sub to bear the inconvenience of the 100-mile or so trip between counties.) And the court will have to sort out the mess, at a greater cost than either party wants.”

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A new article published by Ken Adams, president of Adams Contracts Consulting LLC, explains how to reduce the chances of the confusion that results when a judge or litigator without a grounding in the subject analyzes ostensibly ambiguous contract language.

The article is posted on Thomson Reuters’ Legal Solutions Blog.

“A problem with resolving disputes over ambiguous, or allegedly ambiguous, contract language is that ambiguity is a complex topic—it arises in different ways, many of them far from obvious. So when a judge or litigator without a grounding in the subject analyzes ostensibly ambiguous contract language, confusion often results,” he writes.

His article cites some examples of courts resolving disputes over the meaning of contract language in ways that don’t make sense, including how the Second Circuit Court of Appeals invoked a principle of interpretation that’s markedly at odds with English usage, how the Third Circuit Court of Appeals opted for an unreasonable interpretation of an or, and how the Federal Circuit misanalyzed the phrase at least one of X and Y.

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Timeliness is critical when submitting claims to the government, or any contracting party, for that matter — public or private, writes Brian Dobbs for Bass, Berry & Sims PLC. But, as a ruling in Kellogg Brown & Root Services, Inc. v. Murphy demonstrates, the law does not compel contractors to bring claims prematurely. The key is recognizing when the claim has ripened and the clock has begun to tick.

Dobbs writes that Kellogg Brown & Root Services filed a claim with the Army to recover costs associated with a subcontractor’s work on a dining facility in Iraq. The Army denied the claim and KBR appealed to the Armed Services Board of Contract Appeals. On the Army’s motion, the Board dismissed the claim, finding the six-year statute of limitations under the Contracts Dispute Act (CDA) had expired.

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ContractRoom has posted a free eBook on Building a Transformative Contract Management Practice that can be downloaded.

Machine learning is a field of computer science that allows computers to recognize patterns and learn from them, the company says on its website. With machine learning algorithms are used to learn from and make predictions on data. Arthur Samuel, a pioneer of the tech industry with a background in electrical engineering, was the first one to label this field of computer science as machine learning and defined it as “Field of study that gives computers the ability to learn without being explicitly programmed” in 1959.

The book discusses how machine learning and Natural Language Processing could be applied to B2B contracting in the future.

Download the free eBook.

In an article posted on their firm’s website, Matthew T. Furton  and Julie L. Young, partners in Locke Lord, discuss some recent rulings on arbitration by the U.S. Supreme Court, particularly as they apply to insurance and reinsurance.

The questions and answers discuss why the court has taken on more cases involving arbitration, which arbitration cases are currently under consideration by the court, why it matters that the circuits are split as to whether to stay or dismiss an action after compelling arbitration, and what the current state of the “manifest disregard” standard is.

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Banks’ interest in smart contracts could lead them to beef up their legal departments in the near term, as the financial industry and regulators alike continue to wrestle with the implications of blockchain technology, writes Brian Patrick Eha of American Banker.

In his article Eha explains that “a smart contract is a piece of software that executes its terms automatically and encodes rules agreed upon by all parties. Smart contracts are decentralized — living on a blockchain — and transparent, viewable by all parties. They can be used to transfer value, and that transfer is triggered in response to certain events.”

“What if smart contracts were to catch on? Ideally, the code would be reusable in the form of templates, cutting down on legal busywork. Just not all legal work,” according to the article.

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Narrowly interpreting a policy’s breach of contract exclusion, a federal court judge in California ruled that the exclusion applied only to actual breaches of contract and that an alleged breach in the underlying complaint against the policyholder was insufficient to eliminate coverage, according to an article written by Amy B. Briggs, Christine Spinella Davis, Stephen T. Raptis,Robert H. Shulman and Susan P. White of Manatt, Phelps & Phillips, LLP.

Their article described the case:

A competitor filed suit against the insured, charging the policyholder with making disparaging comments so that its offer of employment would appear more attractive and “to solicit [the competitor’s] employees in breach of a written and implied contract.” The insurer rejected the policyholder’s request for defense, relying on a breach of contract provision in its commercial liability policy. But the court said the allegation was just that—an allegation—and not an actual breach of contract. Other policy exclusions used the term “actual or alleged,” the court noted, implying that the insurer knew how to include and elected not to use such language for the breach of contract provision.

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CIOs, CISOs, CTOs, and other risk and security professionals should familiarize themselves — or refresh their recollections — around Price and Payment, Proprietary & Confidential Info, Changes in Scope and Deliverables, Termination and Remedies, Disclaimers and Indemnifications, advises David Adler in CIO.

“Several obstacles affect and often limit successful negotiations in this area,” he writes. “The risk itself can be a moving target. For example, in the acquisition of an IT services subscriber base (regardless of industry), how will customer attrition, revenue projection revisions, and loss of key personnel affect the price paid (value)?”

“One way to prepare for and better engage in such negotiations is to develop a contract negotiation playbook,” he adds. “While each set of tactics and strategies will necessarily reflect the internal business rules of the individual company, the five areas discussed here should form a part of any playbook.”

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ContractWorks has published a complimentary white paper designed to aid in the selection and implementation of a contract management solution.

The company says it interviewed hundreds of companies and compiled a guide to help with the determination of what type of solution best fits a company’s needs and tips on how to find it .

The white paper covers:

1. A simple framework for understanding if you need a contract management solution.

2. How to understand your organizations goals and the corresponding contract management features that will have the greatest impact on your process.

3. Ways to narrow down your search for a solution.

Download the white paper.

The lawyer who struck a $100 million deal with Uber Technologies Inc. is being accused of greed by some of the drivers covered by the accord who want her bumped, reports Bloomberg News.

“She has single-handedly stuck a knife in the back of every Uber driver in the country,” Hunter Shkolnik, a New York lawyer who’s pursuing his own cases against the ride-share service, said Friday in a phone interview with Bloomberg. “The entire class was thrown under the bus and backed over.”

Shkolnik asked the San Francisco federal judge who presides over the class-action settlement to remove Shannon Liss-Riordan as lead attorney. He says she sold out her clients by accepting a payout for California and Massachusetts drivers that’s less than 10 percent of the value of their claims “while she walks away with $25 million.”

Liss-Jordan labeled the claims as “uninformed,” “untrue and malicious.”

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The 9th U.S. Circuit Court of Appeals ruled in Ocean Beauty Seafoods v. Pacific Seafood Acquisition Company that the doctrine of equitable extension can be used to tack on a non-compete period to an employment agreement after the original period had run, according to an article by Michael Arnold and Robert Sheridan of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.

They write that the case illustrates what can happen when: “employee disregards a non-compete and joins a competitor; former company calls foul and initiates a lawsuit; parties fight it out, but by the time litigation has run its course, the non-compete period in the underlying contract has expired.”

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It is possible to be mistaken about the existence or terms of an agreement and for that mistake to thereby prove that no contract exists, writes Glenn West in Weil, Gotshal & Manges LLP’s Global Private Equity Watch.

As a general rule, being mistaken about whether you contracted, or what you contracted for, does not mean that a contract does not exist based upon the terms of the written agreement you signed. A party’s protestations that he or she did not understand the agreement, or believed it said something other than what it said, or that the words used in the agreement meant something other than what they are determined by a court to mean, will generally not be entertained by a court,” he wrote.

He discusses the case of Patterson v. CitiMortgage, Inc., which illustrates that “a unilateral mistake made by a party that is not made manifest to the other party will not be a basis for reformation because, absent knowledge of the mistaken belief, the other party is entitled to rely on the written agreement as manifesting the intentions of the otherwise mistaken party.”

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Contracts containing uniform terms and conditions are a common feature of modern commercial life, write James F. Bogan III and William D. Meyer of Kilpatrick Townsend & Stockton LLP.

“Consumers are oftentimes required to agree to such contracts in order to buy a good or service, and the contracts typically contain provisions that benefit the business/seller and limit the legal remedies available to the consumer/buyer. While the law generally favors freedom of contract and supports the enforceability of uniform terms and conditions, a recent case applying New Jersey law shows that a business could be exposed to liability – including as a class action defendant – for simply including certain types of limiting clauses in consumer contracts,” they explain.

In their article, they discuss the case of Johnson v. Wynn’s Extended Care, Inc., in which the 3rd Circuit Court of Appeals ruled that a consumer has a valid cause of action against a business where its service contract simply contains a provision waiving attorneys’ fees and splitting costs.

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Many couples sign prenuptial and postnuptial agreements to cover division of property and other assets in the event of a divorce — there are even cohabitation agreements for partners who are not married but live under the same roof, reports Observer.

A “love contract” is a customized set of lifestyle clauses that can be inserted into any prenup, postnup or cohabitation agreement.

“A different kind of love contract applies when the two parties not only live together, but work together,” the report says. “When the legal document is signed in an office setting, the co-working couple promises that their consensual attraction will not lead to distractions or conflicts of interest in the workplace.”

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Blockchain technology is gaining attention for its promise to enable value and asset transfer across a wide range of industries and use cases — and its potential to disintermediate financial institutions, remittance companies and lots of other transactional middleman businesses, according to a report written by Sue Troy, an editorial director at TechTarget. Smart contracts, meanwhile, work hand-in-hand with blockchain technology and have the potential to automate — and also disrupt — processes in many industries.

“Whereas a traditional legal contract defines the rules around an agreement between multiple people or parties, smart contracts go a step further and actually enforce those rules by controlling the transfer of currency or assets under specific conditions,” she explains.

She discusses sample use cases for the insurance industry, real estate, and supply chain.

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As general contractors take on more projects, they will likely find themselves working with new and unfamiliar subcontractors, warn James T. Dixon, P. Wesley Lambert, Amanda M. Leffler and Amanda P. Parker of Brouse McDowell.

“Whether parties are considering working with a new partner or simply re-evaluating existing relationships with long time partners, the parties should consider how to best allocate the risks associated with each project,” they write.

They discuss some of the key provisions contractors and subcontractors should understand when evaluating the risks allocated through subcontract agreements.

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The Federal Trade Commission (FTC) continues to aggressively enforce the antitrust laws, reports Melanie A. Hallas of McDermott Will & Emery.

“On April 27, 2016, the FTC took action against Victrex, plc and its wholly owned subsidiaries, Invibio, Inc. and Invibio Limited (collectively, Invibio) because of exclusivity terms in its supply contracts. The consent order requires Invibio to cease and desist from enforcing most of the exclusivity terms in its current supply contracts and generally prohibits Invibio from requiring exclusivity in future contracts. Invibio is also prohibited from using other pricing strategies, such as market-share discounts, that would effectively result in exclusivity,” she writes.

In her post, she explains that exclusivity terms that arguably have the effect of harming competition may raise antitrust concerns.

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