“Should you add or suggest a modification to a contract or lease when it is not to your client’s best interest? No? Never? The answer is Yes and here’s why,” writes Henry Pharr in Offit Kurman’s blog.

“In the process of negotiating a business transaction, many attorneys are left to ponder why their opposing counsel or his or her client did not suggest (or even demand) a contract term that is clearly to that side’s advantage or even failed to discuss an important concept that affects all parties to the agreement. As an advocate for the client, one might stay silent in order to preserve the benefit of the absence of such matters. Certainly, it is a ‘win’ for your client? And it won’t hurt your relationship with them to happily announce that the opposing party and his lawyer ‘left one out that will hurt them and help us!'”

“However, as an adviser to your client, and for their long-term benefit, there are many instances where leaving out a key substantive or procedural term will end up causing more problems than raising the subject and negotiating terms that both sides can agree to.”

Read the article.

“Legal documentation governing subscription credit facilities has certainly improved for both lenders and funds alike since the product first came to market. Funds have effectively negotiated for more flexibility where needed, and lenders have effectively negotiated for more protections where perceived risks may exist. However, as with many other corporate or financial transactions between two or more parties, and especially given the relationship-nature of subscription finance lending, provisions in legal documentation often get replicated from one transaction to the next, including errors and inconsistencies as a result of the fast-paced world in which practitioners find themselves or, in some cases, a failure to connect the dots. Thus, we are presenting a multi-part series on common mistakes, misunderstandings and oversights we have noticed throughout the legal documentation governing subscription credit facilities over the years,” write Holly Loftis and Mark Nesdill in Cadwalader’s Fund Finance Friday.

Read the article.

“The possibility of a cybersecurity incident—and ensuing litigation—is a fact of life for almost every business. Even companies that do not process or handle consumer information collect personal information about their employees that can be targeted by hackers or phishing scams or even inadvertently disclosed, exposing the company to potential liability,” warns Seth Harrington, Michelle Visser and David Cohen in Orrick’s blog.

“While eliminating cybersecurity litigation risk entirely likely is not feasible, recent cases do highlight some steps that companies seeking to reduce potential exposure to cybersecurity litigation can take:
(1)  Recognize that pre-incident statements about the company’s cybersecurity measures can be used to sustain deception-related claims.
(2)  Assess the “reasonableness” of your cybersecurity, despite the difficulty of doing so.
(3)  Pay attention to how you structure cybersecurity initiatives to protect related documents and communications based on the attorney-client privilege and work product protection.
(4)  Recognize that your statements about a cybersecurity incident may be relied on by courts to sustain plaintiffs’ claims.
(5)  Consider arbitration clauses, but do so cautiously.
(6)  Consider opportunities to contractually allocate or disclaim liability.”

Read the article.

“In an important lesson for both employers and employees a California superior court judge affirmed a $179 million arbitration award against a former Uber executive, Anthony Levandowski, for stealing Google’s trade secret information and soliciting its employees to benefit Uber. See Google LLC v. Levandowski et al., Case No. CPF-20-516982. Levandowski, who also faces criminal charges from the U.S. Attorney’s office for theft and attempted theft of trade secrets, filed for bankruptcy following the judge’s order,” reports Aaron Goldstein and Jasmine Hui in Dorsey’s Publications.

“The court’s ruling underscores the importance of well-crafted confidentiality, non-compete, and non-solicit agreements. Over the course of Levandowski’s employment with Google, he signed at least four separate agreements which included either non-compete, non-solicit, confidentiality, and nondisclosure provisions, or a combination thereof. The panel of arbitrators in the underlying case held, among other things, that Levandowski breached these employment contracts with Google by misusing Google’s confidential information and attempting to solicit Google employees.”

“Google hired Levandowski in 2007, where he co-founded the company’s autonomous vehicle project, which later became Waymo, LLC. In 2015, Levandowski left Google and formed a new self-driving company, Ottomotto, Inc. In 2016, Uber acquired Ottomotto, Inc. and hired Levandowski to head its autonomous vehicle department. Shortly thereafter, Google filed two arbitration demands against Levandowski and another former Google employee who moved to Uber.”

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“Schick, the shaving product company, recently announced it was abandoning its proposed $1.4 billion acquisition of rival startup Harry’s Razors. The announcement followed the U.S. Federal Trade Commission’s (FTC) threat to block the deal in federal court over antitrust concerns. Harry’s has reportedly threatened to sue Schick for failing to exercise ‘reasonable best efforts’ to get the deal through merger review. It is one of an increasing number of these ‘broken deal’ claims, which may be prevented by more specific antitrust provisions in the merger agreement,” discuss Barry J. Reingold, Jon B. Jacobs and Jeremy C. Keeney in Perkins Coie News & Insights.

Read the article.

“A certificate of insurance is a document, normally issued by an insurance broker, that supposedly verifies the existence and terms of an insurance policy,” write Gene Killian in The Killina Firm’s Fraud.

He discusses how “It’s common in the construction industry, where contractors and subcontractors are generally required to carry certain types of coverage, but really, the insurance card in your car is also a kind of certificate of insurance. The certificate of insurance is one of the most important documents that you can review in connection with your business contract, because if something goes wrong, you may need to tap that coverage.”

“The problem is, when it comes to enforcing the terms of the coverage reflected on the certificate of insurance, the certificate of insurance is essentially worthless. It’s just a written statement by an insurance broker, not an actual policy.  While it might get the broker or policyholder into trouble for negligence or misrepresentation if it’s not valid, it creates no rights against the insurance company.”

Read the article.

“Sometimes appellate opinions are issued on a seemingly narrow subject matter that can apply to many other factual contexts.  In one such recent example, a Florida appellate court concluded that a security services provider could not be held responsible for allegedly failing to protect a person who was criminally attacked,” reports Matthew J. Meyer in Ansa | Assuncao’s News & Articles. “The reason for the appellate court’s decision is what is interesting, and could be applied well beyond the factual circumstances involved in the specific case:  the security provider’s contract with Miami-Dade County established the hours of service, and those hours of service ended at 7:00 pm each day, therefore the security provider had no legal duty to provide security to a person who was attacked at 8:00 pm. ”

“In reaching its decision, the appellate court discussed the concepts of ‘zone of risk’ and the corresponding legal duty for a security provider to ‘protect persons lawfully on defined premises.’  Importantly, however, the appellate court explained:  ‘Nonetheless, the extent of the undertaking as defined under the terms of the contract should define the scope of the duty.’ Applying this doctrine, the appellate court explained its conclusion that the responsibility to enact reasonable security measures was borne solely by the County.”

Read the article.

“Agreeing to arbitrate a dispute, whether in a contract or by agreement, is a serious decision for any business.  There are pros and cons to binding arbitration versus trial in a court that go beyond a series of blog posts, but the fact is that when a dispute is arbitrated, finality is the rule. It is very difficult to appeal an arbitration award. In many instances, representing a party in an arbitration requires more due diligence and work than a trial. Great “arbitration” lawyering is therefore essential but many times does not happen.” warns David K. Taylor in BuildSmart Bradley’s Arbitration.

“Arbitration is a matter of contract. Federal and state law allow for the enforcement of arbitration clauses. Courts now favor arbitration. There are plenty of articles out there on drafting arbitration clauses, but far too often drafters fail to consider the basics.”

Read the article to learn the basics.

“The recent decision of the Bankruptcy Court for the Southern District of New York in In re AAGS Holdings LLC, Case No. 19-13029 (SMB) (Bankr. D. Del. Nov. 12, 2019), underscores the ability of debtors — and specifically, for purposes of this client alert, parties to real property purchase contracts — to take advantage of the Bankruptcy Code’s 60-day tolling period to get more time to close on a purchase despite a “time of the essence” (TOE) closing deadline. The SDNY Bankruptcy Court … held that a debtor’s bankruptcy petition is not filed in bad faith when the petition is filed in order to obtain a statutory 60-day extension of a TOE closing deadline. The decision underscores the need for sellers to consider the effect of this automatic bankruptcy extension when negotiating with buyers over the terms of a consensual closing extension (e.g., fees and increased deposits) even if the contract does not have a financing contingency.” warn Adam C. Rogoff, Daniel Ross Berman and Caroline Gange in Kramer Levin’s Perspectives.

“The court found that the term “Closing Date” as defined in the PSA was, in fact, ambiguous.”

Read the article.

“Florida’s Second District Court of Appeal recently issued a decision that serves as a reminder not to take for granted a proposition that most practicing attorneys regularly encounter: a motion for summary judgment must be supported by competent evidence, and an affidavit that does little more than mimic the motion for summary judgment will not suffice.” write Dean A. Morande and Rachel A. Oostendorp in Carlton Fields Insights.

“In Rodriguez v. Avatar Property & Casualty Insurance Co., a plaintiff sued her insurer, alleging that it had breached her homeowners insurance contract by denying coverage for water damage. The trial court granted the insurer’s two separate motions for summary judgment” which the Second District reversed “concluding that the 37-page affidavit lacked sufficient information to demonstrate that the affiant possessed the competency or personal knowledge to testify on those matters, which ranged from contract interpretation to trade specialties of plumbing and contracting. ”

Further, “The affidavit failed to identify her title or corporate duties, did not state that it was made on personal knowledge, and did not set forth her relevant skill set or experience.”

Read the article for the three “musts”.

“Most construction contracts, and sometimes even estimates or purchase orders, require that changes to the original scope of work be approved in writing. Despite the requirement, there are many instances where the parties do not follow this and do not properly document changes. As a result, costly disputes often arise.” write Rhiannon K. Baker and Philip S. Bubb in Fredrikson & Byron’s News & Media.

“Changes are often needed in the course of a construction project. And those changes typically include work that is either added or removed from the original scope of work. While that might sound like a unilateral request or decision, in practice, it is not.”

“In fact, a change order is a contract amendment. ”

The article provides a list of what should be included in a change order.

Read the article.

“An indemnification remedy against sellers (subject to a cap) continues to find its way into many private company acquisition agreements,” explains Glenn D. West in  Global Private Equity Watch’s Glenn West Musings.

He writes “absent an exclusive remedy provision, a non-breaching party is entitled to damages under the common law for a breaching party’s failure to abide by the terms of the contract irrespective of whether that contract contains an indemnification clause.” Further “the historical fact that indemnification was not normally associated with direct (or first party) claims continues to cause courts some confusion and requires care by deal lawyers to avoid misunderstandings and unintended results.”

Read the article.

Dan Harris of Harris Bricken, LLP, writing in China Law Blog, updates his earlier discussion of the dangers of relying on China employment contracts that split the salaries of expatriate employees working in China.

He explains that Chinese company employers may hire expats with the promise that they will get paid 30 percent in China and 70 percent in Hong Kong or some other country, and then the worker never gets the 70 percent.

“Both you and them are engaging in tax fraud but all that should matter for you is that you are engaging in tax fraud — assuming your employer actually pays you outside China, which they often do not,” Harris writes.

The takeaway is that a less than fully legal, truly enforceable contract is no contract at all.

Read the article.

A recent decision from the Virginia Supreme Court further weakens the enforceability of teaming agreements, which may mean trouble for prospective subcontractors, according to an alert from Baker & Hostetler.

The post explains:

“In light of CGI Federal, contractors should assess whether they can reasonably rely on the terms and conditions of their teaming agreements to provide meaningful assurances regarding the negotiation of a prospective subcontract without binding themselves to more definite terms prior to any prime award, at least under Virginia law. Accordingly, unless contractors wish to consider the law of other forums when negotiating their teaming agreements, they must pay close attention to the specific terms and conditions of their contracts when evaluating what is and is not enforceable and govern their pre-award conduct accordingly.”

Read the article.

An article by two Hogan Lovells lawyers and published by Lexology outlines some of the due diligence steps to take in the age of blockchain age of smart contracts.

Authors of the article are Theodore J. Mlynar and Ira J. Schaefer.

They discuss the need for a traditional analysis of the proposed transaction and negotiated terms, a source code analysis, and the advice that the proposed smart contract be run on a simulator to see how it operates in response to expected and unexpected messages from users and other contracts..

Read the article.