Presenting a live 90-minute webinar with interactive Q&A Boilerplate Clauses in Commercial Contracts: Avoiding Unintended Consequences, Implementing Practical Solutions Choice of Forum, Choice of Law, Force Majeure, Dispute Resolution, Assignment and Other Key Clauses TUESDAY, APRIL 10, 2018 1pm Eastern | 12pm Central | 11am Mountain | 10am Pacific Today’s faculty features: Brooke Ashton, Shareholder, Fetzer Simonsen Booth Jenkins , Salt Lake City Mikel R. Bistrow, Partner, Dinsmore & Shohl , San Diego Steven O. Weise, Partner, Proskauer Rose , Los Angeles The audio portion of the conference may be accessed via the telephone or by using your computer's speakers. Please refer to the instructions emailed to registrants for additional information. If you have any questions, please contact Customer Service at 1-800-926-7926 ext. 1 .
Tips for Optimal Quality FOR LIVE EVENT ONLY Sound Quality If you are listening via your computer speakers, please note that the quality of your sound will vary depending on the speed and quality of your internet connection. If the sound quality is not satisfactory, you may listen via the phone: dial 1-866-961-8499 and enter your PIN when prompted. Otherwise, please send us a chat or e-mail sound@straffordpub.com immediately so we can address the problem. If you dialed in and have any difficulties during the call, press *0 for assistance. Viewing Quality To maximize your screen, press the F11 key on your keyboard. To exit full screen, press the F11 key again.
Continuing Education Credits FOR LIVE EVENT ONLY In order for us to process your continuing education credit, you must confirm your participation in this webinar by completing and submitting the Attendance Affirmation/Evaluation after the webinar. A link to the Attendance Affirmation/Evaluation will be in the thank you email that you will receive immediately following the program. For additional information about continuing education, call us at 1-800-926-7926 ext. 2.
Program Materials FOR LIVE EVENT ONLY If you have not printed the conference materials for this program, please complete the following steps: Click on the ^ symbol next to “Conference Materials” in the middle of the left - • hand column on your screen. • Click on the tab labeled “Handouts” that appears, and there you will see a PDF of the slides for today's program. • Double click on the PDF and a separate page will open. Print the slides by clicking on the printer icon. •
Boilerplate Clauses in Commercial Contracts Mikel R. Bistrow Dinsmore & Shohl LLP mikel.bistrow@dinsmore.com Brooke Ashton Fetzer Simonsen Booth & Jenkins brooke@mountainwestlaw.com Steve Weise Proskauer Rose LLP sweise@proskauer.com April 10, 2018
Outline • General rules • Pre-trial jury waiver • Choice of law • Attorneys fees • Choice of forum • Counting of days • Personal jurisdiction • Integration • Risk-allocation provisions • Force majeure • Assignment and anti- • Third party beneficiaries assignment • Severability • Arbitration + dispute • Signatures resolution • Statute of limitations 6
General: Don’t draft like a 19 th Century lawyer Dwyer v. The Insurance Company of The State of Pennsylvania, American International Companies (In re Pihl, Inc.) , 560 B.R. 1 (Bankr. E.D.Mass. 2016) – ‘The assignment provision of the Indemnity Agreement is a jaw- breaking , 497 word run-on sentence. Parsing this passage requires a high pain threshold , a law degree and preferably some familiarity with 19th century legal writing .’ 7
General: Some states require ‘plain English’ for consumer contracts California Civil Code § 1793.1(a)(i): Every manufacturer, distributor, or retailer making express warranties with respect to consumer goods shall fully set forth those warranties in simple and readily understood language NY General Obligations Law § 5-702: Every written agreement …to which a consumer is a party and the money, property or service which is the subject of the transaction is primarily for personal, family or household purposes must be … written in a clear and coherent manner using words with common and every day meanings 8
General: Don’t overreach (too much) Lennar Homes of California v. Stephens , 232 Cal.App.4th 673 (2014) – We agree with Lennar that there is nothing generally absurd or unconscionable about prevailing party clauses. Civil Code section 1717 specifically authorizes courts to enforce contractual provisions requiring payment of attorney fees and costs to the prevailing party in a dispute … But Lennar chose a different course in drafting the contracts at issue, seeking to impose a provision that purports to have much broader effect than a typical prevailing party clause. If we were to enforce the indemnity clause as if it were a typical prevailing party clause, we would in essence be endorsing Lennar's overreach , allowing Lennar to continue to benefit from the in terrorem value of the language it drafted and imposed on its customers. In other words, under the circumstances of this case, only by refusing to enforce the indemnity clause at all do we provide Lennar any incentive to conform the language of its contracts with consumers to the limits of enforceability under California law .’ 9
Courts look for the intended meaning – ‘arising’ Chebotnikov v. Limolink, Inc ., _ F.Supp.3d _ ( D. Mass. 2015) –‘As a general matter of contract interpretation, disputes “ arising under ,” “ arising out of ,” or “ arising from ” the terms of an agreement must have their inception in the agreement itself . That language does not encompass matters “ related ” to the agreement or the relationship of the parties. The phrase “ arising out of ” is construed by courts to be narrower than phrases such as “ with reference to ,” “ relating to ,” or “ in connection with .”’ 10
Courts look for the intended meaning – ‘and’ + ‘or’ BOKF, N.A. v Caesars Entertainment Corporation , _ F.Supp.3d _ (S.D.N.Y. 2015) - Although the plain meaning of ‘ and ’ is ‘ conjunctive ’ and the plain meaning of ‘ or ’ is ‘ disjunctive ’, the meaning of words in a contract depend on ‘the context and usage in a particular contract’ to implement the ‘intent’ of the parties. Court said that those words could each have the opposite meanings, depending on the ‘context and usage’ 11
Courts look for the intended meaning – ‘sole’ The Bank of New York Mellon v. WMC Mortgage, LLC , _ F. Supp. 4th _ (applying New York law) (S.D.N.Y. 2015) (provision stating that it is the ‘ sole remedy ’ available under the contract may be interpreted as not providing for a ‘ sole remedy ’) 12
Courts look for the intended meaning – ‘definitions’ Hot Rods, LLC v. Northrop Grumman Systems Corporation , _ Cal. App. 4th _ (2015) (Court interprets word based on definition in agreement even though the particular use is not capitalized to indicate that it is intended to have its defined meaning) 13
Courts look for the intended meaning – ‘whatsoever’ Lewis v. YouTube, LLC , _ Cal.App.4th _ (2016) – Contract clause stating that service provider would bear no liability ‘ whatsoever ’ for damages resulting from ‘errors or omissions in any content or for any loss or damage of any kind incurred as a result of your use of and content posted, emailed, transmitted, or otherwise made available via the services, whether based on warranty, contract, tort, or any other legal theory .’ Applied to contract claim. Limitation of liability was particularly appropriate in connection with provision of free service. 14
What’s conspicuousness is not always conspicuous • Balram v. Etheridge , 449 N.Y.S.2d 389, 391 (1982) (clause in lease unenforceable because of failure to conform to minimum point size required by statute) • Fairfield Leasing Corp. v. Technigraphics, Inc ., 607 A.2d 703, 706 (N.J. Super. Ct. Law Div. 1997) (finding no waiver because clause was ‘utterly inconspicuous ’) • Colgate Constr. Corp. v. Hill , 334 N.Y.S.2d 1002, 1004 (1972) (finding waiver invalid because clause located inconspicuously on back of home improvement contract). • In re Bassett , 285 F.3d 882 (9th Cir. 2002) (text in all capital letters may not be conspicuous; ‘. . . there is nothing magical about capitals. . . . Lawyers who think their caps lock keys are instant ‘make conspicuous’ buttons are deluded .’) 15
Choice of law – basic rules • Klaxon Co. v. Stentor , 313 U.S. 487 (1941) (Under Erie v. Tompkins , 304 U.S. 64 (1938) federal courts will ordinarily apply the state choice of law rules where the courts are located) • Restatement (Second) Conflict of Laws § 187 (choice of law clauses generally enforced if there’s a ‘substantial’ relationship with the chosen state and no fundamental policy issues) • Brown & Brown, Inc. v. Johnson, 25 N.Y.3d 364 (NY 2015) (NY courts will not enforce otherwise enforceable choice-of-law clause if the chosen jurisdiction’s law is ‘ truly obnoxious ' or if the application of the chosen jurisdiction’s law violates ‘some fundamental principal of justice, some prevalent conception of good morals, some deep- rooted tradition of the common weal’ of New York ) • UCC § 1-301 – ‘reasonable relation’ to chosen state 16
Recommend
More recommend
