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).

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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.

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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.

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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.

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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.”

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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.

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Dan Harris writes in the Above the Law blog about how U.S. companies relying on a Letter of Intent (LOI) or a Memorandum of Understanding (MOU) detailing the terms of their proposed China deal may be exposing themselves to substantial liability.

“Most U.S. (and many European companies) assume that no party is exposed to any liability during the negotiation period as liability arises only after the parties have executed a formal, written contract. If their written document states that it is non-binding, no liability can arise,” he writes. But the rule in China is the opposite.

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The New Year is a good time for a company to analyze any form documents that may need to be revisited, including one of the most important in protecting your business, your liability waiver, writes Chelsey Ziegler in the Health & Fitness Law blog.

She writes that this analysis tends to be often overlooked until something tragic happens.

“The timing is also quite perfect for this because for new clients, this will be the first time being presented with your revamped form and, for existing clients; it tends to be a practical statement to say ‘everyone is required to resign the 2016 waiver that is now in place.'”

The article discusses the enforceability of waivers, consideration, applicable risks, representations and warranties, release language, and five pitfalls to avoid when drafting waivers.

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A recent summary order from the United States Court of Appeals for the Second Circuit – which exercises federal appellate jurisdiction over New York, Connecticut and Vermont — serves as a reminder that an employer’s reliance upon its employee handbook can also prove its undoing, writes Michael McKeon of Pullman & Comley in an article published on JDSupra.com.

“In Langenkamp v. Olson, the Second Circuit reversed the federal trial court’s dismissal of a breach-of-contract claim brought by a non-tenured faculty member of New York University. The appellate court held that by expressly incorporating the Faculty Handbook into its offer of employment, NYU had transformed its provisions into contractual terms,” McKeon writes.

His article explains that it is critical that employers use care when drafting and referencing such handbooks.

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The insurance relationship is contractual, but when policyholders claim insurers failed to honor their obligations, they typically invoke the tort of “bad faith,” writes Robert D. Helfand of Carlton Fields Jorden Burt.

“When courts try to explain this anomaly, they cite features of insurance making it uniquely important that parties respect each other’s interests. Courts often say these features make the duty of good faith ‘reciprocal,’ ” he explains.

He discusses some cases that provide another reason for asserting that the insured’s bad faith injured the insurer in ways that were foreseeable when the contract was made. Even if the argument falls short, it might still create a basis for reducing the insurer’s exposure.

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As demonstrated by two recent cases, the trends of delegating arbitrability questions to the arbitrator, and precluding parties from contractually modifying appellate rights, are here to stay, writes Timothy J. Abeska of Barnes & Thornburg in an article published by the National Law Review.

In Brennan v. Opus Bank, 796 F.3d 1125 (9th Cir. 2015), a dispute in an employment agreement, Brennan sued his employer, Opus Bank, claiming he was entitled to terminate his employment for “Good Reason” and collect a severance benefit. The bank treated Brennan’s termination as a voluntary resignation which did not trigger an entitlement to severance.

The other case was Atlanta Flooring Design Centers, Inc. v. R.G. Williams Construction, Inc., 333 Ga. App. 528, 773 S.E.2d 868 (Ga. Ct. App. 2015).

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ContractRoom has published an ebook on building a transformative contract management practice.

The book covers:

1. The roles and duties and essential qualities of a top contract manager
2. How to assess candidates for suitability during the recruitment process
3. What can and cannot be controlled in the contract management process?
4. Planning for the transition of arriving and departing contract manager employees
5. Monitoring the productivity of your contract managers
6. Looking towards the future of contract management

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The effort to measure and manage legal risk pays dividends in the reduction of real losses from legal issues. It also pays dividends through improved collaboration between the legal team, operations, and senior management, writes Mark Little, compliance and risk management technology executive at Berkman Solutions.

In an article published on Medium.com, he presents the proper answer for a member of a corporate legal department who faces the requirement: describe how you will review all outstanding issues, set priorities that almost never change, improve interdepartmental trust, and make customers happy within an acceptable timeframe.

The answer, he writes, involves implementing a qualitative risk model to measure and manage legal risk.

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A recent Delaware Court of Chancery decision illustrates why anti-reliance and exclusive representations contractual language must not be overlooked as meaningless “boilerplate,” writes Brad Reid, Senior Scholar, Dean Institute for Corporate Governance and Integrity, Lipscomb University.

“Additionally, an integration clause means that the written agreement is all that one should rely upon,” he writes in the article. “An individual should not slip into a comfortable feeling of having a personal relationship in a commercial transaction. It is important to recall that modern business involves arms’ length transactions requiring a high degree of due diligence.

The case is Prairie Capital III, L.P. v. Double E Holding Corp.

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In a recent article, ContractRoom examines some of the best practices for determining whether candidates for contract manager possess the necessary qualities to perform the job.

The article starts with tips about the pre-interview process and then progresses to the questions that should be posed to the applicants.

Most of those questions involve asking the candidates to describe negotiation and management situations they’ve faced in the past and having them outline how they reached the decisions in those cases.

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Termination rights are a crucial and frequently negotiated aspect of complex commercial agreements, write Peter M. Watt-Morse and Glen Rectenwald in the Morgan, Lewis & Bockius blog, Sourcing @ Morgan Lewis.

In addition to providing protection in the event that a vendor defaults, the ability to walk away from negotiations regarding modifications or renewals can also be a powerful tool for creating negotiating leverage,” they explain. “Flexible termination options, termination assistance, and other termination rights can manage the risks of transitioning to a new provider and provide credible alternatives for future negotiations.”

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Consumer Financial Protection Bureau determined that pre-dispute arbitration clauses harm consumers by forcing them to sign or click away their right to pursue future remedies in a court of law, reports Julie Goldsmith Reiser is a partner at Cohen Milstein Sellers & Toll PLLC in an article published by Bloomberg BNA.

Consumers “undervalue the importance of mandatory arbitration clauses even in the rare instances where consumers might be able to opt out.” she writes. “CFPB correctly concluded that binding individual customers to mandatory arbitration before a dispute arises, rather than encouraging its voluntary use, is harmful to public interest and consumer protection.”

She details the CFPB’s study and results and examines a critique offered by the Mercatus Center.

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D.C. Toedt III, an attorney and adjunct professor at the University of Houston Law Cen­ter, has published an article that he calls “a useful teaching case for people drafting (i) merger-and-acquisition agreements, and (ii) related employment agreements, especially those being offered to employees of an acquired company.”

The article is on the On Contracts website.

The case is Cardoni v. Prosperity Bank, No. 14-20682 (5th Cir. Oct. 29, 2015), involving the acquisition of an Oklahoma bank by a Texas bank.

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