When considering entering into a non-disclosure agreement between two commercial entities, the first question to ask is whether it is necessary for either party to be disclosing confidential information, writes Kathleen Wegrzyn in Foley & Lardner’s Manufacturing Industry Advisor blog.

She writes that the best way to protect your confidential information is to not disclose it at all, if it is not necessary for the transaction.

But “when entering into an NDA, a party should carefully consider the scope of the definition of ‘Confidential Information,’ pay close attention to the non-use and non-disclosure provisions, include a confidentiality period and a provision providing for the return of the Confidential Information, and ensure that no terms other than those related to confidentiality are included in the NDA,” according to Wegrzyn.

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Trademark licensing disputes can present thorny issues at the intersection of contract and trademark law, warns an article in the
Dorsey & Whitney LLP blog TheTMCA.com.

“And when the dispute involves the Trump brand for residential buildings, the adjudication of rights and obligations under a trademark license agreement can become national news,” write Sandra Edelman and Dan Goldberger.

In Residential Committee of the Board of Managers of 200 Riverside Boulevard at Trump Place Condominium v. DJT Holdings LLC, the court held that the 200 Riverside Building was not required to use the Trump name on the façade of the Building.

The court agreed with the Condo Board that there are “no obligations or requirements in the license agreement for the building to carry the name ‘Trump’ on it in perpetuity.”

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Michelle E. Litteken of PilieroMazza PLLC writes that releases have proven to be the double-edged sword of government contracting.

“In some cases, a release can prevent a contractor from successfully submitting a request for equitable adjustment or a claim to the Government,” she explains. “At the same time, a prime contractor can use releases to its advantage—requiring a subcontractor to sign releases during performance and at contract closeout. These releases can be used to easily defeat subsequent subcontractor claims if a dispute arises. Contractors should be familiar with releases in both contexts and use this knowledge to make releases work to their advantage.”

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The language in a forum selection clause is critical if you want to ensure that potential litigation takes place on your “home court,” writes Shep Davidson in the Burns Levinson In-House Advisor blog.

“Indeed, as the defendants in Genis v. Campbell recently learned, having a less than all-encompassing and precise forum selection clause can lead to unintended results,” he writes.

Defendants in that suit tried to invoke a forum selection clause in a license agreement and in an employment agreement that would have kept the litigation in Ohio, but the plaintiff prevailed in having the case processed in Massachusetts. The Superior Court found that the suit seeks redress for alleged misappropriation of intellectual property, not covered by the two agreements.

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Because there is no single definition of what circumstances are force majeure, parties to a contract must agree upon what will be considered force majeure for purposes of that contract, advises Elizabeth A. Whitman for Whitman Legal Solutions, LLC.

Writing in the Whitman blog, she says that the parties should work with their attorneys to determine what types of circumstances should be listed given the nature of the specific contract.

“Parties to a contract generally agree that it isn’t fair to require performance of a contract in accordance with its terms if certain uncontrollable or extraordinary situations arise.  Therefore, many contracts include in them what are known as ‘force majeure clauses,’ which relieve all parties to a contract from performing under certain extraordinary circumstances,” she explains.

She lists some examples of conditions that might be included in a definition of force majeure.

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In an important new en banc opinion, the Fifth Circuit has abandoned its historic criteria for determining whether a contract relating to servicing oil or gas drilling on navigable waters is controlled by maritime law in favor of a “simpler, more straightforward test,” reports Duane Morris LLP.

Jospeh J. Pangaro writes that courts in the Fifth Circuit historically applied a six-factor test to determine whether a contract is governed by maritime law, as articulated in Davis & Sons, Inc. v. Gulf Oil Corp..

“Taking the lead from the Supreme Court’s ruling in Norfolk Southern Railway Co. v. Kirby, 543 U.S. 14 (2004), the Fifth Circuit departed from the six-factor test used in cases like Davis & Sons in favor of a new, stream-lined two-pronged test to determine whether a contract like the one at issue was maritime in nature,” Pangaro writes.

In his article, the author discusses the new test.

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In a post at Construction Law Musings, Melissa Dewey Brumback writes about updates to the American Institute of Architects standard form contract documents.

Dewey, a construction law attorney with Ragsdale Liggett in Raleigh, North Carolina, discusses the top 10 changes.

Those changes include differing site conditions, owner’s right to carry out the work, direct communication between the owner and contractor, contractor’s means and methods, notice provisions, notice related to evidence of owner’s financial arrangements, liquidated damages, dates of commencement and substantial completion, termination for convenience, digital data, and insurance

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Contracting in the context of subcontractors, outsourcing, and privacy and security laws can be fast-paced, complex, and onerous, warns Katila Howard in Foster Swift Collins & Smith’s Biztech Law Blog.

“Like most contracts, complications do not typically arise until there is a breach. Furthermore, in the context of cybersecurity and outsourcing, the cost of a contractual breach can increase drastically depending on whether the incident occurred in the context of a security breach and the associated reporting requirements,” she writes. “Accordingly, drafting your own checklist and standard provisions that satisfy your company’s privacy and security requirements in advance can save time and money in the future.”

She provides a list of recommended subjects to cover in vendor agreements.

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Fisher & Phillips LLP reports that a delivery driver for gig economy company DoorDash has been ordered by the 5th Circuit Court of Appeals to take his misclassification case to a private arbitrator instead of court pursuant to a valid arbitration agreement he entered into.

“The April 25 decision is a solid win for gig employers and could provide a template for how other similar businesses should structure their own arbitration agreements,” writes Richard Meneghello.

Delivery drivers for DoorDash are classified as independent contractors, but one driver filed suit, claiming wage and hour violations, and sought conditional class certification.

“If there is an agreement to arbitrate with a delegation clause…, we will consider that clause to be valid and compel arbitration. Challenges to the arbitration agreement as a whole are to be heard by the arbitrator,” the 5th Circuit said.

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A federal district judge in Chicago has dismissed a non-compete case—at the pleading stage—finding that the non-competition covenant at issue was overbroad, as a matter of law, according to Winston & Strawn.

The firm’s post says that the judge ruled because the covenant restricted the employee from taking any position with another company that engaged in the same business as the employer, without regard to whether that position was similar to a position the employee held with the employer, or was otherwise competitive with the employer.

The case is Medix Staffing Solutions, Inc. v. Dumrauf.

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A former client of Perkins Coie and Bracewell has filed a malpractice suit against the two firms, claiming they led it into a contract that failed to protect its interests in a deal with Morgan Stanley.

Above the Law explains that plaintiff Electron Trading wanted to license its technology for spread trading — which allows investors to buy and sell securities simultaneously in an effort to capture price difference between financial instruments — to Morgan Stanley. Electron wanted the deal to include language limiting Electron’s liability for third-party intellectual property claims and maintaining their right to sue Morgan Stanley in the event of a contract breach, writes Kathryn Rubino.

The final agreement, however, did just the opposite, Electron claims.

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Attempting to advance a novel theory of law, several banks filed a class action in Illinois federal court against a grocery store chain arising out of a data breach that resulted in the theft of 2.4 million credit and debit cards, reports Jackson Lewis PC.

After the breach, the banks were required to issue new cards and reimburse its customers as required by federal law for financial losses due to unauthorized purchases, estimated by the plaintiffs to be in the tens of millions of dollars. With the litigation, the financial institutions sought to recover some of their costs from the grocery store chain that was allegedly responsible for the loss of the data.

Jeffrey M. Schlossberg explains the outcome: “Despite seemingly compelling arguments, the Seventh Circuit ultimately upheld the lower court’s dismissal of the banks’ claims finding that they were bound by the contractual provisions of their agreements. Essentially, the court ruled, by joining the credit card system, the banks accepted some risk of not being fully reimbursed for the costs of another party’s mistakes.”

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It is easy to skim over contracts’ insurance provisions or simply defer to risk experts, but there are a few questions that should be considered during the next review of the insurance section of a contract, advises Morgan, Lewis & Bockius LLP.

The article by Michael L. Pillion and Jessica M. Pelliciotta discusses four such questions:

How do your indemnification and other risk allocation provisions interact with your insurance provisions?

What types of insurances and how much coverage should you require?

Will you know if there are changes to the insurance coverages?

Does your contract require the other side’s insurer to provide a waiver of subrogation?

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The Antitrust Division of the U.S. Department of Justice recently announced a settlement of criminal charges against Knorr-Bremse AG and Westinghouse Air Brake Technologies Corp. for having maintained agreements not to compete for each other’s employees, according to Locke Lord.

Authors Stephen P. Murphy and Joseph A. Farside Jr. write that one executive went so far as to state in an email that no-soliciting was a “prudent cause for both companies” and that the companies would “compete in the market.”

In announcing the settlement, an assistant AG noted that the criminal complaint was part of a broader Antitrust Division investigation into agreements not to compete for employees, typically known as no-solicit or no-poach agreements.

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One of a court’s most frequent tasks is interpreting ambiguous contracts created by the use of ambiguous language in contracts; however, by the time a court is deciding the issue, costly litigation may have taken years, write Richard Raysman and Elliot Magruder for Holland & Knight.

In a post for the firm’s Ditigal Technology & E-Commerce Blog, they discuss a recent case in which parties to a software development and license agreement confronted this unfortunate truth, and both left unsatisfied.

In Apacheta Corp. v. Lincare, Inc., Apacheta sued for breach of contract in claiming that Lincare’s termination violated the right-to-cure provision because Lincare neither provided notice of breach nor a cure period.

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“Pay when paid” clauses are common in the construction industry, according to Bradley Arant Boult Cummings, but courts generally disfavor conditions precedent (an event that must occur before another party’s performance is due) and will not observe their existence unless they are unambiguously laid out in the contract.

The article, published by JD Supra, states that “subcontractors and general contractors should be aware that if language in a contract clearly establishes that the prime contractor is only obligated to pay the subcontractor if the owner pays the prime contractor for that work, and the contract states that the subcontractor is taking the risk of the owner’s potential insolvency, then courts are likely to enforce the contract as written—condition precedent and all. This language establishes what is known as a pay if paid clause.”

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Although limited liability protections normally insulate business owners from personal liability for their business’s debts, lenders routinely require a small business owner to sign a personal guaranty as a condition for a commercial loan to the business entity, points out Thomas C. Wolff, writing for Ward and Smith.

This requirement essentially circumvents the statutory protection against personal liability, he writes.

“Any potential guarantor should read a proposed guaranty agreement carefully and understand each contractual provision. Often the terms can be negotiated, even if a business entity is a startup and has limited assets and income,” writes Wolff.

In the article, he discusses continuing guaranties, unlimited and limited guaranties, joint and several liability, the obligation of contribution, guaranty of payment vs. guaranty of collection, the lender’s right to set-off, and the death of a guarantor.

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Seyfarth Shaw has some advice for franchisor when considering their legal strategy in “no-hire” agreement class actions: franchisor employers should assess whether the joint employer risk is worth accepting in order to pursue the single-enterprise defense.”

In its Workplace Class Action Blog, the firm discusses class actions claiming that provisions contained in franchise agreements prohibiting the hiring of employees of other intrabrand franchisees without the consent of their employer violate the antitrust laws.

The authors discuss the single-enterprise defense, potential joint employer liability, and other defenses.

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The Supreme Court of Texas recently examined the intersection of the rule against perpetuities and the oil patch in ConocoPhillips Co. v. Koopmann, No. 16-0662, writes Thomas G. Ciarlone Jr. in Kane Russell Coleman Logan’s Energy Law Today blog.

The rule provides “that no interest within its scope is good unless it must vest, if at all, not later than twenty-one years after some life in being at the creation of the interest.”

Ciarlone discusses the Koopman case and explains that it represents a positive result for the industry, one which will promote certainty in deed construction and therefore encourage robust exploration and development activities.

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It is important to periodically review form agreements to ensure that the provisions that were favorable or represented your company’s position in the past continue to accurately protect your company’s interests, and that includes a company’s nondisclosure agreements, according to Morgan, Lewis & Bockius.

Michael L. Pillion and Jessica M. Pelliciotta are authors of the article.

They discuss in some detail the subjects of parties, terms, the definition of “confidential information,” disclosure of information, standard of care, the obligation to report misuse, and the return of confidential information.

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