Relying on “basic principles of contract law,” the Supreme Court has held that an unaccepted settlement offer and offer of judgment under Rule 68 are “legal nullit[ies]” that have no effect on whether a live controversy remains between the parties, according to an analysis written by BakerHostetler’s Jacqueline Matthews and Rand McClellan and published on JDSupra.com.

The case is Campbell-Ewald Co. v. Gomez, No. 14-857.

“The upshot of the Court’s decision is that a defendant cannot moot a putative class action by merely offering full relief to the named plaintiff on his or her individual claims,” the authors write. “The Court, however, expressly left open the question of whether payment of full individual relief could moot the case.”

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A couple of words here or there in a contract can make a huge difference, particularly when those words relate to what happens if there is a breach or some other dispute between the parties, writes Shep Davidson in Burns & Levinson’s blog, The In-House Advisor.

He discusses the case of Family Endowment Partners, L.P. v. Sutow.

That case involved a lawsuit that resulted in a $48 million award to the plaintiffs in a ruling issued by an arbitrator. Part of the award included triple damages. Davidson explains how some simple changes in the contract could have avoided much of the defendant’s loss.

Read the article.

A fired contingent fee attorney can’t enforce a provision in his fee agreement requiring a client to pay the lawyer 20 percent of his eventual recovery if the client changes counsel, a divided Pennsylvania Superior Court declared Jan. 5, reports Bloomberg BNA.

“Enforcing the termination provision would penalize the client for exercising his absolute right to end the attorney-client relationship, Judge Kate Ford Elliott said in the majority opinion. In this situation, Elliott said, lawyers are limited to recapturing the reasonable value of their services, but that award can reflect the extent of the lawyer’s contribution to obtaining the client’s recovery,” the report explains.

“Just as a lawyer may not charge an exorbitant fee or place a ‘no termination’ clause in the contract or assert a vested interest in a client’s claim, a lawyer may not penalize a client for discharging him or her,” Elliott wrote.

Read the article.

There are few reasons a court will treat a contract it as if it never existed at all, and those limited reasons center almost exclusively on a widely pervasive misdeed that is difficult to detect, such as resume fraud, writes Jennifer B. Rubin of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo.

“Resume fraud is not, of course, limited to educational credentials,” she adds. “Title and salary inflation abound as well as falsified job experience.  Setting aside the moral discussion, the question is whether fraudulent credentials provide a basis for annulling an employment contract.”

She explains that the key to having a court grant an annulment and permitting the employer to avoid any contractual promises made to the employee based on the fabricated credentials is that the criteria at issue be material to the employer.

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ContractRoom has published a discussion of the use of predictive agreement in the purchasing or procurement process.

“Past data is used to help improve the procurement and contracting processes so agreement can be reached more quickly and predictably,” the article says.

The process not only ensures less time will be spent in the procurement process and negotiation, but also that a fairer price (and conditions) will be agreed upon, it continues.

Read the article.

eSignLive has published a white paper that’s designed to help secure the enforceability of electronically signed contracts and agreements.

“Today, businesses of all sizes are moving their customer transactions to the web. As the adoption of electronic signature technology grows, so does the number of e-signature solutions in the market,” the company says on its website. “Because these solutions are all ‘ESIGN/UETA compliant,’ you may think they will all provide the same level of enforceability in the event of a dispute. This is false.”

“Using an electronic process to capture a customer’s signature provides stronger evidence than is possible with paper and more importantly, has been proven to reduce the risk of legal disputes. But what exactly is “electronic evidence”? What are the best practices for capturing and archiving all the digital fingerprints that customers leave when they transact with you online? How can this evidence help enforce e-contracts? And how can you use it to avoid going to court altogether?”

The white paper, which can be downloaded, presents the recommendations of three legal experts: Pat Hatfield and Greg Casamento, partners at Locke Lord LLP, and Frank Zacherl, litigator and partner at Shutts & Bowen LLP.

Download the white paper.

Winston & Strawn has compiled a list of more than 20 major news developments involving contract settlements and ongoing contract negotiation during the final month of 2015.

The list is published on Lexology.com.

Read the article.

The recent problems experienced by Finish Line should be instructive to all users and providers of technology products and services, according to a report posted by FisherBroyles LLP.

The Indianapolis specialty retailer acknowledged a problem with deployment of a new warehouse and order management software system. Stores sales dropped 5.8 percent due to the disrupted supply chain issues that failed to maintain adequate inventory to meet demand in its stores. And the company replaced its CEO.

Such situations often result in major litigation between customer and vendor, and often claims by shareholders of the customer, the report says.

It lists concerns that should be addressed by customers and vendors when drafting such agreements.

Read the report.

The typical reinsurance contract arbitration involves a tri-partite panel of arbitrators, with each party appointing an arbitrator and a separate process governing appointment of the third arbitrator (known as “the umpire”),” according to a white paper published by Sidley Austin LLP and available on Lexology.com.

Most arbitrations run smoothly, the paper says, but “arbitrators should be ready for the exceptional case, which can be occasioned by another arbitrator or counsel. The remedy for rogue behavior may rest within the panel, or it may require judicial intervention. Judicial relief can be hard to come by, given the procedural and substantive hurdles to be cleared; but the truly egregious case has a way of catching a court’s attention.”

The article examines some examples of panel breakdown and how they have been addressed.

Read the white paper.

The law you choose to govern your contract may not be the law that governs the applicable statute of limitations for claims arising under or related to that contract, writes Glenn West in Weil, Gotshal & Manges’ blog, Global Private Equity Watch.

“Standard choice of law clauses do not in fact choose all of the law of the chosen state; many unknowingly only choose some of that law and that part of the chosen law may only apply to claims in contract but not in tort,” he writes.

The bottom line, West says, is that “unless your choice of law clause specifically states that the statutes of limitations applicable to claims arising under or related to the contract are also governed by the contractually chosen law, the statutes of limitations applicable to the claims governed by the chosen law will be the applicable statutes of limitations of the forum state where the claim is made.”

Read the article.

While Statements of Work (SOWs) have been, and will continue to be a major part of the professional services framework, they can sometimes be a major barrier to properly scoping, estimating, completing, or even performing the work correctly, reports ContractRoom.

“Even the most liberally written SOWs contain limiting parameters such as budgeting and task descriptions, which often send these documents into an awkward Change Request process which may or may not happen favorably,” the article says.

The article lists the top four scenarios where businesses can benefit using automated (negotiation and) contract management software, especially in the statement of work process (automating statements of work).

Read the article.

The Consumer Financial Protection Bureau has proposed prohibiting application of pre-dispute arbitration agreements to class litigation involving certain consumer financial products, according to a report published by Carlton Fields on its website.

“Citing concerns that such agreements ‘effectively prohibit’ class litigation and prevent consumers from obtaining remedies for harm caused by providers of consumer financial products or services, the proposal would apply to most products subject to Bureau oversight,” the report says.

“The Bureau’s proposal would prohibit inclusion of arbitration clauses that block class action claims in contracts with consumers for credit cards, checking and deposit accounts, prepaid cards, money transfer services, certain auto loans, auto title loans, small dollar or payday loans, private student loans, and installment loans.”

Read the report.

In the day-to-day operations of a company, the distinction between owned IP rights and in-licensed IP rights can easily get lost. But what happens if a licensor files for bankruptcy? Will an in-license protect the licensor’s right to continue to use the IP rights? Jason M. Rodriguez and Jessica M. Pelliciotta, associates with Morgan Lewis, discuss those issues in an article published by The National Law Review.

In the article, they lists contract drafting points that can help protect the licensee’s IP rights in the event of a licensor’s bankruptcy.

They also offer a sample provision to use in drafting.

Read the article.

Writing a comprehensive software contract is challenging, especially when you’re dealing with a large, complex deployment, writes Paul Korzeniowski in a commentary published by InformationWeek.

“Crafting comprehensive requirement documents, monitoring the licensing terms, and being aware of potential gotchas will help ensure a contract works for you, your business, and the vendor with which you’ve chosen to engage. It’s important for you to start the procurement process by outlining the desired features of a software system in a requirements document. Knowing which features are important to your business, and which are not, is vital to the process,” he explains.

The article describes how CIOs need to understand where potential contract potholes lie and steer around them.

Read the article.

An article by Stephen J. Bagge in the Carlton Fields PropertyCasualtyFocus blog describes an Eleventh Circuit’s ruling that provides persuasive language for applying contractual liability exclusions under D&O policies to alleged business torts that are related to or dependent on the existence of contractual liability.

“This is significant, in that plaintiffs are increasingly seeking insurance coverage for contractual disputes,” Bagge writes. “As the court’s opinion demonstrates, D&O policies are not intended to insure contracts entered into by insureds: that is why D&O policies routinely contain contractual liability exclusions.”

The case was Bond Safeguard Ins. Co. v. National Union Fire Ins. Co. of Pittsburgh, Pa., No. 14-15233 (11th Cir. Oct. 5, 2015), in which the plaintiff sought to recover payments it had made under certain surety bonds.

Read the article.

CobbleStone Systems, a provider of contract lifecycle management software, announced it has enhanced Docusign integration for Contract Insight Enterprise Edition. The latest version of Contract Insight Enterprise allows Docusign users to access additional DocuSign functionality within Contract Insight and provides a new interface for managing documents within DocuSign.

“CobbleStone offers industry-leading contract lifecycle management software which allows users to easily electronically sign contracts with multiple tools,” the company said in a release. “Our clients appreciate the ability to manage the full contract lifecycle from request, to approvals and eSignatures all with CobbleStone’s CLM. Our integration partnership with Docusign brings together our top contract software with Docusign’s leading electronic signature features via a seamless connection.”

The release continues:

CobbleStone Systems Corp. is a leader in user-friendly, enterprise contract lifecycle management software solutions. CobbleStone has been a best-of-breed vendor since 1995, provides the benefit of years of experience, is a Federal GSA vendor, is rated by Gartner, Forrester and Dun & Bradstreet, and offers one of the most feature-rich products on the market.

ContractRoom offers three rules of contract drafting that can help a business ensure that contracts will protect the business’ interests and avoid costly disputes.

One of the rules concerns the importance of simplicity, to avoid writing that can lead to confusion, litigation, and results contrary to the purpose of a contract.

Other rules involve covering all the bases, and the importance of using plain and effective language.

Read the article.

A recent case from the Massachusetts Superior Court presents a stark reminder that whether conduct is viewed as a “mere breach” or part of a deceptive or unfair course of conduct can be in the eye of the beholder, writes Shep Davidson in The In-House Advisor blog, published by Burns & Levinson LLP.

“In American Translation Partners, Inc. v. Lahey Clinic Hospital, Inc., ATP entered into a three-year contract with Lahey to provide interpreters to assist Lahey’s medical professionals in their interactions with non-English speaking patients,” he writes. The contract stated that Lahey would not hire interpreters who had worked for ATP within the past 24 months. ATP later sued, claiming Lahey had breached that rule.

The Superior Court wrote:

“Did Lahey intentionally breach the contract and did it do so to either punish ATP or to gain a financial benefit? Persuasive evidence will have to be offered that Lahey knew that it was likely breaching the Services Agreement but decided to do so anyway either as a lever in its ongoing contract negotiations with ATP or to simply reap unfair benefits. On this record, summary judgment in favor of Lahey must be denied.”

Read the article.

The enforceability of a confidentiality covenant in an employment agreement without time or geographical limitations may turn, at least in part, on how the information that may not be disclosed is defined, writes Paul E. Freehling in Seyfarth Shaw‘s Trading Secrets blog.

He describes a case involving a salesman for a medical device manufacturer, Orthofix, Inc. v. Hunter. The salesman signed a confidentiality covenant at the time he was hired, but years later he resigned and went to work for a competitor. The former employer sued him, but, because the covenant had neither temporal nor geographic limitations, the trial court invalidated the covenant and dismissed the breach of contract claim.  The appellate court reversed, holding that no such limits are required for a confidentiality agreement.

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​Much ado has been made over a North Carolina court’s ruling this past summer in RREF BB Acquisitions, LLC v. MAS Properties, LLC, 2015 NCBC 58, recognizing a cause of action for so-called “duty to negotiate in good faith,” writes Richard A. Prosser of Poyner Spruill.

“Undoubtedly, this is a noteworthy development in the law of contracts and a caveat for practitioners and their business clients,” he explains. “A closer consideration, however, reveals that the claim may not be as novel as it appears at first blush and the risk of unintended liability perhaps not as significant.”

He lists four relevant points for consideration.

Read the article.