A well-designed arbitration clause can give the parties substantial control over procedures and costs, as well as over who decides which issues and when, writes Daniel Pascucci in the blog ADR: Advice from the Trenches.

But, the Mintz, Levin, Cohn, Ferris, Glovsky and Popeo lawyer warns, all too often parties make agreements that leave the decisions on most of their options to others or to chance.

In his article, he dissects the generic arbitration clause, and describes what an arbitration clause should do and what it can do.

“Arbitration’s promise of being faster, more efficient, and more predictable than judicial litigation should be viewed as conditional – if the parties are willing to put in the effort to design a suitable process, arbitration can deliver on its promise,” Pascucci concludes.

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As the number of vendors that businesses engage with rises, so does the need for a greater contractual understanding of vendor agreements among businesses, CIOs, IT departments, and general counsels alike, according to a post on the Biztech Law Blog of Foster Swift Collins & Smith.

Katila Howard warns that, while many of the underlying contractual principals remain the same, overlooking the differences can be costly.

In her article, she discusses the considerations of security and privacy, limitation of liability, access to data, privacy, service levels, and subcontractors.

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The U.S. Supreme Court has granted certiorari in New Prime Inc. v. Oliveira, which should provide guidance as to the circumstances in which the Federal Arbitration Act (FAA) applies to interstate transportation workers who are purported independent contractors, according to the Transportation Blog of Holland & Knight.

“The case will be important for in-house and private transactional attorneys who draft contracts with transportation sector independent contractors, as well as litigators handling employee misclassification cases,” the article’s authors write.

They explain: “Over the past several years, a spate of class action litigation has targeted the long-standing use of owner-operator truck drivers as independent contractors, with drivers claiming that they should be classified as employees. The contract between the motor carrier and the driver often contains an arbitration clause, but drivers typically file these cases in court, leading to a fight over the proper forum.”

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A blog post by J. Marc Ward for Fredrikson & Byron addresses some of the risks associated with the failure to negotiate a data processing agreement, as well as tips on how to avoid common pitfalls.

The article is aimed at the banking business.

Ward addresses regulatory risks, mergers and acquisitions, and negotiating the contract.

“As products and services are added to the master agreement, do not lose sight of the big picture,” he advises. “Watch out for services with terms longer than the other services in the agreement and ensure that any added services terminate at the same time as the master agreement.”

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An employee misclassification lawsuit can be difficult to dismiss early because plaintiffs are afforded great latitude in crafting factual disputes that can only be resolved at trial, points out a post in the Labor Days blog for Kelley Drye.

Special counsel Michael D. Yim offers a suggestion: one simple sentence in employment contracts, handbooks and policies for salaried employees that would likely reduce exposure by approximately two-thirds in FLSA cases.

He presents the wording of the sentence and then illustrates the  financial impact and disparity of the two calculation methods — first without the “magic words” in the agreement and then with the “magic words.”

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In a blog post, DLA Piper partner Jeff Lehrer discusses some common commercial contract issues to watch out for as your company begins contracting with third parties and looks forward to the next venture round or potential acquisition.

He points out that it is important to address the critical intellectual property rights issues that will allow the protection of an idea in the commercial market.

Among the points he discusses: consider the impact that the agreement may have on the company’s ability to pursue subsequent contracting opportunities; commercial agreements must clearly allocate ownership of IP; ensure compliance with open source licenses; and avoid being on the hook for uncapped liability.

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As with any contract, non-disclosure agreements are least effective when treated as boilerplate afterthoughts, points out Sean W. Fernandes in an article for the American Bar Association’s Mentoring New Lawyers blog.

“To ensure that clients obtain the maximum benefit of non-disclosure agreements, lawyers should tailor the agreement to the information being shared and the risks attendant to the disclosure,” he advises.

In his article, Fernandes discusses:

• a statement of purpose
• terms governing permissible uses
• a definition of confidential information
• procedures for labeling confidential information
• what steps should be taken to secure confidential information
• procedures governing unauthorized disclosures
• expiration of the agreement and return or deletion of confidential information
• a discussion of remedies

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As more and more “smart” products incorporate computer and software elements, manufacturers must evaluate whether they have the appropriate supply chain practices and procedures in place to handle the addition of these elements, advises Nicholas J. Ellis of Foley & Lardner in the firm’s Manufacturing Industry Advisor blog.

This could involve revising contracting practices and documents, he writes.

“Many of the contract forms used to source raw materials or physical components may not be appropriate to use when sourcing software. The terms of any contract must be dictated by the specific circumstances,” Ellis explains.

He discusses some examples that highlight some of the potential issues that may arise when trying to use traditional supply form documents to purchase software or other computer components to be included in a product.

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The U.S. Supreme Court recently reaffirmed that collective bargaining agreements (CBAs) must be interpreted according to “ordinary principles of contract law,” according to a post in the  Proskauer Rose Employee Benefits & Executive Compensation Blog.

The ruling again rejected the Sixth Circuit’s inference from silence that CBAs vested retiree benefits for life.

Three years ago, the Supreme Court held in M&G Polymers USA, LLC v. Tackett that CBAs must be interpreted according to ordinary principles of contract law, and the court rejected the Sixth Circuit’s so-called “Yard-Man” inference that if a CBA did not specify that retiree medical and other welfare benefits had a limited duration, the benefits were presumed to be vested.

The article’s authors explain: “The Supreme Court unanimously reversed the Sixth Circuit, holding that the Sixth Circuit’s inference of vesting could not be squared with Tackett because it did not comply with Tackett’s direction to apply ordinary contract principles.”

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Charles Sartain and Chance Decker, writing in Gray Reed & McGraw’s Energy & the Law blog, describe a contract case in which an oil and gas landman found out that the contract he signed with a purported agent for a client was unenforceable.

The independent landman signed a contract with the purported agent of the plaintiffs, in which the producers were to pay Moore “$600 per mineral acre for for leases signed. The plaintiff said he helped secure numerous leases, but defendants refused to pay.

The authors explain that the court found that the contract didn’t specify the properties it applied to, this violating the Statute of Frauds. Sartain and Decker then offer some ways the contract could have been written so it would have been enforceable.

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A recent unpublished Michigan Court of Appeals opinion provides some guidance with respect to the architect’s and engineer’s common law duty when processing pay applications, according to a post on the website of Clark Hill.

Jeffrey M. Gallant and Scott D. Garbo explain that the court held that the owner of a construction project could not maintain a professional negligence claim against the architect for failing to adequately review payment applications.

“While you may only have a contract with one of many project participants, Michigan courts continue to elaborate on the potential obligations owed to all other participants, including architects, engineers, contractors, subcontractors, owners, and lenders,” they write.

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Blockchain technology is now being used to build tools and infrastructure that help lawyers draft contracts, record commercial transactions, and verify legal documents, reports Jasmine Ye Han in an article for Bloomberg Law.

She writes about the increased efficiency and uniformity blockchain can provide in contracting, its used in other legal documents, the skills and role of lawyers in blockchain, and the challenges ahead for the technology.

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Glenn West, writing in Weil, Gotshal & Manges LLP’s Global Private Equity Watch, writes about a case in which a cut-and-pasted forum selection clause from an unrelated contract made its way into the wrong document.

The cut-and-pasted text declared that “any action pertaining to this agreement shall be the State of Illinois.” When the plaintiff sued the defendant in Florida, where the defendant’s headquarters were located, the defendant moved to dismiss on the basis that the contract required choice of Illinois as the forum.

The Florida appellate court said that mandatory forum selection clauses mean what they say, even when what they say was the result of a supposed cut and paste error. Accordingly, the case was dismissed for being filed in an improper forum.

West sees the ruling as good news for the careful transactional lawyer and bad news for those who fail to draft a bespoke clause.

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Pepper Hamilton LLP’s Constructlaw blog discusses an Ohio case in which a plaintiff sued a building company and attempted to have the arbitration clause in a construction contract declared unenforceable.

The contract identified the builder in the case by a name that was a fictitious name for a similarly named company and was not registered with the Ohio secretary of state, writes Emily D. Anderson. The trial court denied plaintiffs’ motion to invalidate the arbitration clause.

The appellate court agreed with the trial court, observing that the builder did not initiate the action but was merely defending it.

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Recent technological developments like artificial intelligence (AI) are now helping companies overcome many of the challenges to contracting, points out Beverly Rich in an article posted in the Harvard Business Review.

“The use of AI contracting software has the potential to improve how all firms contract – and it will do so in three ways: by changing the tools firms use to contract, influencing the content of contracts, and affecting the processes by which firms contract,” she writes.

She adds that – right now – AI contracting tools may offer the most value to companies with large volumes of contracts by reducing time spent in review and drafting. But as the technology develops, it will one day be useful to all firms.

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A recent ruling  is a powerful reminder that the broad freedom of contract that Delaware law accords entities such as LLCs offers both the promise of great latitude to contracting parties and the threat of serious pitfalls for parties that fail to carefully protect their interests in the agreement, according to a post on the website of Cadwalader, Wickersham & Taft.

The decision also underscores the limits on an implied covenant breach claim under Delaware law.

The authors offer some takeaways from the ruling, discussing in detail:

• The implied covenant of good faith and fair dealing as applied in Delaware does not operate to rewrite contract simply because regretful plaintiffs wished they had negotiated a better or different deal
• The negotiated, mutual waiver of fiduciary duties narrows the already slim chance a Delaware court will apply the implied covenant of good faith and fair dealing
• Waiver of fiduciary duties, conditioned on a sale to an unaffiliated third party, granted the board unfettered discretion to determine the marketing and structure of the company’s sale
• Plaintiffs offered no reason to believe defendants’ conduct frustrated their reasonable expectations
• The court highlighted certain conduct that may be sufficiently egregious to implicate the implied covenant in similar situations

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An agreement between two parties involved in an international contract may involve a mechanism, known as the “home country” provision, that provides that the party initiating arbitration must sue the other party in its home country.

A post of the website of Skadden, Arps, Slate, Meagher & Flom explains that “proponents of such clauses say they provide a disincentive to elevate disputes because a party will be reluctant to go to the other side’s home country. Though they are not widely used in large transactions (and are not recommended in arbitral literature or by arbitral institutions), they are occasionally present.”

The authors discuss two cases that illustrate that “home country” arbitration clauses may prove cumbersome to administer in practice and may result in unintended consequences for the parties.

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By Eric Begun
King & Fisher Law Group

As confirmed in a very recent Wall Street Journal article, the legal impacts and effects of using emojis and emoticons in business and workplace communications and dealings are growing. For attorneys, contract professionals, and business executives and teams discussing, negotiating, and communicating about technology, business, deals, and transactions, the use of emojis (pictographs) and emoticons (punctuation marks, letters, and numbers) should be a concern.

Depending on the circumstances, using an emoji or emoticon to respond to another party’s email or message may have the same effect as if precisely crafted words had been used. Unless the author of the email or message is careful, casually sending a 👍, :-), 👌, or ☺ in response to an email putting forth a proposal or offer to do business may be the same as stating, “I agree to your terms.” At a minimum, replying to a message with an emoji may convey contractual intent. Bottom line, before using emojis or emoticons in emails and other communications, it is critical to consider how they may be received or interpreted.

The use of emojis clearly is on the rise. In its November 2016 report, Emogi reported that 2.3 trillion messages incorporating an emoji would be sent in 2016 – and the report did not include the use of emojis in emails. In addition, the Unicode Consortium recently announced that 157 new emojis have been added in 2018, bringing the total number of standard emojis to 2,823. As more of the business world adopts technology to communicate, it becomes more important for business leaders, procurement and purchasing professionals, and others to be mindful of their use of emojis and emoticons in emails, texts, and other message formats. To those businesses and companies that have “careful communications” policies, has your policy been updated to address the use of emojis?

Aside from general contract concerns, the use of emojis has and will increasingly impact parties’ legal rights and obligations. This includes in the areas of labor and employment, promissory estoppel, jury instructions, and criminal cases. According to research by Santa Clara University law professor Eric Goldman, for the set of reported cases that he was able to identify as mentioning “emoji” or “emoticon” over the 2004-2016 period, over 30% of the cases were from 2016, and nearly 50 were from 2015 and 2016.

And, if you needed another reason to be overly cautious when using emojis and emoticons in correspondence and communications, be aware that the true meaning attributed to any particular emoji may be vague, at best, or non-existent, at worst. Moreover, the form and appearance of the emoji you send may not be the same as the form and appearance seen by the recipient. In addition, different cultures, generations, and geographic regions interpret emojis differently. (The most confusing emoji? It’s 🤗.)

The reality is that emojis are easy to use and can be fun and communicative. They are, and will continue to be, used in emails, texts, and communications between and among business parties, their advisors, and others. Just be sure to 👀 before you 🏃.

In addition to maintaining general policies prohibiting sexual harassment, employers may choose to implement workplace romance policies outlining permissible and prohibited conduct concerning dating among co-workers, points out Ashley Robertson Parr in a web post for Nexsen Pruet, LLC.

“Companies often prohibit relationships between employees in supervisory/subordinate roles, given the inherent issues that arise,” she writes. “Other companies disallow relationships between employees and clients/vendors. Another option is to require employees to inform management of workplace relationships. Regardless of the specifics, such policies should reference the company’s anti-harassment policy and remind employees how to report unwanted conduct.  In addition, employers must be diligent in making sure that the policies are enforced fairly and without a disparate impact.”

Her article covers implementing policies addressing workplace relationships, what love contracts are, and the fact that love contracts are not cure-alls.

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Amending agreements is a common practice with managed service providers (MSPs) and companies involved with software licensing and companies that provide professional services, according to a blog post on the website of Kirkpatrick Law.

Even the best agreements can require amendments based on changes in law, technology, and the products or services provided.

The post discusses some examples of ways to amend contracts, including delete and replace, from and to, and a revised agreement.

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