The Morgan Lewis Tech & Sourcing blog discusses a model agreement developed by the Clearing House as a voluntary starting point to facilitate data sharing between financial institutions and fintech companies.
The model agreement covers such provisions and concepts as flow-down obligations, data breach, liability, warranties and disclaimers, intellectual property, disclosure and consent, termination and suspension, and assignment.
Even if an errors and omissions policy contains a breach of contract exclusion, coverage may be available in a breach claim, depending on the circumstances and applicable law, writes Charles P. Edwards for Barnes & Thornburg.
Writing in the firm’s Policyholder Protection blog, Edwards discusses a recent court ruling involving coverage for a breach of contract claim brought against a corporate policyholder by one of its customers.
The article also covers two other similar cases.
A distribution agreement is a legally binding contract between a seller of goods and a distributor that outlines the details involved in the sale and transfer of goods, explains Regina Campbell of The Campbell Law Group.
“By having a distribution agreement, businesses save time and money by avoiding misunderstandings that affects the profitability of each party and preventing future litigation over disputes,” she writes in a post on Lawyers.com.
In the post, she discusses the mistakes, which involve not using a distribution agreement, attempting to distribute too much, too fast, failing to specify whether the agreement is exclusive, lack of termination clauses, and lack of renewal language.
Because Enterprise Resource Planning implementation and software licensing contracts are as complicated as the software itself, there are a number of key things for general counsel to keep in mind as they review these contracts, according to a post on the Taft Technology Insights blog.
Author Marcus Harris offers a guide to negotiating and drafting contracts for ERP software systems, discussing seven main areas where companies slip up most-frequently.
The areas include: specify the vendor as the expert, detail liability, define responsibility, put everything in the contract, watch out for contractual remedies, and have a mechanism for controlling scope.
A post on the Tech & Sourcing blog of Morgan Lewis provides a checklist of common workstreams to consider inn outsourcing and managed services transactions.
Authors Barbara Murphy Melby and Kevin P. Dermody discuss governance, planning, people and asset transfers, resource mobilization, operations, processes and documentation, infrastructure and security enablement, networks, change and communications management, and third-party contracts disposition management.
For the company that is outsourcing part of its business functions to a third party, reviewing existing third-party contracts for certain key terms is an important part of the outsourcing process, points out Morgan Lewis in a blog post.
Authors Barbara Murphy and Kevin P. Dermody discuss typical terms to focus on when reviewing the third-party contracts: contract expiration date/auto renewal provisions, third-party use rights and restrictions, assignment provisions, pre-paid expenses/annual fees, and termination rights/fees.
A post by Material Handling & Logistics offers 12 tips for a company to reduce legal risk while building a foundation for a long-term relationship with a new transportation provider.
Authors Martin Robins and Lauren Pittelli explain that “the contract is the beginning of your relationship with a transportation provider. A collaborative contracting process with shared goals and understandings, clear expectations and mutual obligations will reduce your company’s legal risk while building a foundation for a long-term relationship.”
The tips cover such topics as due diligence, enforcement practicalities, insurance, performance requirements, and more.
Image by Mitch Barrie
Gun manufacturer Remington Arms asked the U.S. Supreme Court on Thursday to overturn a ruling from Connecticut’s high court allowing the company to be sued by one survivor and the families of nine victims killed in the 2012 massacre at Sandy Hook Elementary School, reports Courthouse News Service.
The North Carolina-based company argued in a petition for a writ of certiorari that the 2005 federal Protection of Lawful Commerce in Arms Act shields firearm makers from liability in every circumstance when their products are used in acts of violence, reports Courthouse News’ Christine Stuart.
The Connecticut Supreme Court in May refused to strike arguments regarding the marketing of the XM15-E2S weapon, a type of AR-15 semiautomatic gun that killed 20 first graders and six educators in 264 seconds.
Read the Courthouse News article.
The Blockchain & Financial Services Blog of Frost Brown Todd features a discussion in which a court ruled that where a contract between a credit card processor and its sale agent had conflicting clauses, the clause should be read in favor of the sales agent, resulting in the credit card processor being liable for withholding residual payments.
Courtney Rogers Perrin writes about Infinity Capital LLC v. Francis David Corp., from the Northern District of Ohio.
The ruling offers a lesson in contract drafting and the need for clear, non-contradictory provisions, as well as enforceable damages clauses, according to Perrin.
Some companies, hoping to prevent negative online consumer reviews, include clauses in form contracts stating that bad reviews are prohibited and punishable by fines. However, the Federal Trade Commission seeks to protect U.S. consumers and ensure fair competition and business practices, according to a post on the website of Ryley Carlock & Applewhite.
The FTC’s Consumer Review Fairness Act states that such gas clauses are illegal and void in form contracts.
Companies should treat such gag clauses in past contracts as void, and essentially should ignore negative reviews from a relatively few consumers, the authors advise.
A contract with an express end date means what it says, writes Glenn D. West for the Global Private Equity Watch of Weil, Gotshal & Manges.
“The end date for a contract without an express end date, or one that purports to continue indefinitely, or even forever, may in fact be subject to early termination, or have an implied end date, depending on the particular approach of the courts of the state governing that particular contract,” he adds.
He discusses a recent Minnesota Supreme Court decision, Glacial Plains Cooperative v. Chippewa Valley Ethanol Co., LLLP, in which the court held that a long-term agreement to supply grain to an ethanol plant, which did not otherwise contain an end date, did “not unambiguously express an intent to form a contract of perpetual duration, and [was] thus a contract of indefinite duration [that] . . . is terminable at will upon reasonable notice once a reasonable time has passed.”
The overwhelming majority of contracts and purchase orders are fulfilled without a major issue, but contractual limitation on liability can have significant impact for a business, warns Glen W. Price of Best Best & Krieger.
He discusses the two types of limitation of liability.
“The first limitation is on the type of damages you can claim if there is a breach of contract. The most common damages to be waived or limited in contracts are indirect or consequential damages and lost profits,” Price writes.
The second type of limitation on liability he discusses is a dollar limitation or cap.
Reuters reports that a federal appeals court has determined that Amazon is not liable for facilitating the sale of a defective product manufactured by another company.
It’s the second time in just three weeks that courts have found Amazon not be liable for the defective products of their suppliers.
Reuters’ Alison Frankel reports that the 6th Circuit held in Fox v. Amazon that Amazon cannot be held responsible under state product liability law because it was not the seller of the defective product – even though the product was advertised on Amazon’s platform and Amazon shipped and collected payment for it.
Eric D. Mulligan of Hudson Cook, LLP writes about a case that illustrates the importance of drafting a contract that will avoid questions of interpretation by making the terms clear and apparent from the face of the text.
The case involves the default on a mobile home retail installment contract. The purchaser returned the home to the vendor with $40,000 left on the contract. Then the company sold the home for $53,000 and did not return the surplus to the buyer.
The Montana Supreme Court found that the terms of the release did not end the parties’ debtor-creditor relationship, and the purchaser was allowed to retain a surplus.
Greenberg Traurig offers a wide-ranging discussion of commercial contracts in a post on the Lexology website.
Using a question-and-answer format, the post covers such commercial contract topics as: contract formation, statutory controls and implied terms, limiting liability, payment terms, termination, subcontracting and assignment and third-party rights, disputes, and remedies.
Reuters is reporting that a group of U.S. state attorneys general are investigating Expedia Group and hotel chains like Hyatt Hotels Corp and Marriott International Inc for alleged violations of antitrust law in online travel booking, according to a court filing.
“The filing in a state court in Utah relates to a dispute originally filed in Texas in which Travelpass accused the hotel chains last year of agreeing with each other, and with online travel groups like Expedia, to not advertise to consumers who searched for another company’s hotel,” according to the report.
Court documents name the hotel chains Hyatt, Marriott, Caesars Entertainment Corp and Choice Hotels International Inc.
Facing an onslaught of lawsuits and a criminal investigation, Boeing announced the appointment of a newly created czar to oversee all legal matters arising from two deadly crashes of 737 MAX jetliners, reports The Seattle Times.
J. Michael Luttig, 64, a former federal appeals court judge who has served as Boeing’s general counsel since 2006, is now the new counselor and senior adviser to Boeing Chairman and CEO Dennis Muilenburg and the company’s board of directors, according to the Times Steve Miletich.
Dozens of lawsuits seeking monetary damages have been filed against Boeing in U.S. courts, alleging negligence on the part of the company. Statements indicate Boeing plans to take an aggressive stance in responding to civil allegations and any potential criminal accusations.
Read the Seattle Times article.
Entering into a clearly drafted lease agreement at the outset of the relationship helps to set expectations, which minimizes the possibility of disputes over how the lease should be interpreted, writes Eric J. Remington for Ward and Smith.
The article lists some of the issues that can often result in disputes in commercial leases.
It also examines a recent opinion that addresses insurance and liability clauses and provides guidance on how courts should interpret insurance and liability provisions in commercial leases.
Many considerations go into drafting appropriate audit rights, including the types of services that the customer is receiving, and the industry in which the customer’s business operates, explain Anastasia Dergacheva and Katherine B. O’Keefe in Morgan Lewis Tech & Sourcing blog.
“In many cases, the customer is the auditing party and the service provider is the audited party, but there are situations where the roles will be reversed,” they write.
The article provides an overview of several key issues to consider when drafting audit rights for services agreements.
Expert Webcast will present a complimentary webinar roundtable titled “The Role of Financial Experts in Commercial Litigation.”
The event will be Tuesday, March 26, 2019, 1-2 p.m. Eastern time.
Speakers will be Dan Boland of Pepper Hamilton, Jeff Litvak of FTI Consulting, Clara Chin of FTI Consulting, and Alex Kasan of DelMorgan & Co.
Anyone who wants access to the replay of the webinar may indicate that preference in the last field of the registration form.