Top 10 Practical Tips To Either Avoid Litigation Or To Protect Yourself In Computer Contracting ACI Computer Contracting San Francisco, California October 20, 2005

Participants Steven Brower Steven Brower Litigation Attorney Litigation Attorney Orange County, CA Orange County, CA William L. Coats, III William L. Coats, III Litigation Attorney Litigation Attorney Palo Alto, CA Palo Alto, CA Robert Kohn John Hansen

Assumptions and Goals These tips apply to contracts where the 2 sides might have different business goals These tips apply to contracts where the 2 sides might have different business goals Even real “ partners ” don ’ t always agree Even real “ partners ” don ’ t always agree There is nothing like a mutual profit to make people forget they don ’ t like each other There is nothing like a mutual profit to make people forget they don ’ t like each other No contract is so large, or so small, that you can ’ t have a dispute No contract is so large, or so small, that you can ’ t have a dispute There are good choices that can be made There are good choices that can be made

Do you really want to avoid litigation? Litigation is getting into court, or staying out of court, whichever is better for you in the particular situation. Litigation is getting into court, or staying out of court, whichever is better for you in the particular situation. You may not want to be in court, but that doesn ’ t mean you want to tell the other side about your preferences You may not want to be in court, but that doesn ’ t mean you want to tell the other side about your preferences

Attorneys’ Fees Clause Notice the location of the apostrophe Notice the location of the apostrophe Are you more likely to be paying fees or trying to collect fees Are you more likely to be paying fees or trying to collect fees Experts witnesses and costs are *not* attorney ’ s fees Experts witnesses and costs are *not* attorney ’ s fees It is very important whether you say “ reasonable ” fees or “ all ” fees (maybe) It is very important whether you say “ reasonable ” fees or “ all ” fees (maybe) Scope of the clause Scope of the clause Only for collection of monies due Only for collection of monies due Mutuality may be presumed by law Mutuality may be presumed by law

Venue Clause An idea to minimize litigation, and avoid dispute over two different locations An idea to minimize litigation, and avoid dispute over two different locations “ If you sue me, it must be in my location. If I sue you, it must be in your location. ” “ If you sue me, it must be in my location. If I sue you, it must be in your location. ” Before you insist on a location, make sure you plan to be there in 5 years Before you insist on a location, make sure you plan to be there in 5 years

Choice of Law Clause Few cases are resolved based on which choice of law is used Few cases are resolved based on which choice of law is used It is difficult for counsel to agree to a body of law which they don ’ t know It is difficult for counsel to agree to a body of law which they don ’ t know

Understand the Subject Matter You must understand the subject matter in order to include appropriate remedies and protections You must understand the subject matter in order to include appropriate remedies and protections

“Indemnification” is a Misnomer – The Correct Term is “Invitation to Litigation” Indemnification just about never works Indemnification just about never works

Don’t Do A Contract Until You Know What Is Being Delivered There is no substitution for specifications There is no substitution for specifications If the business people understand what they are getting (or giving) then: If the business people understand what they are getting (or giving) then: There is a better chance that they won ’ t be asking about litigation There is a better chance that they won ’ t be asking about litigation They should be able to explain it They should be able to explain it If they can ’ t, just be sure that they don ’ t complain about the fact that a jury will be deciding for them If they can ’ t, just be sure that they don ’ t complain about the fact that a jury will be deciding for them

Alternative Dispute Resolution The term is a misnomer – Mediation and Arbitration should not be referred to in the same paragraph The term is a misnomer – Mediation and Arbitration should not be referred to in the same paragraph The only time when mediation is a bad idea is when the subject matter isn ’ t worth talking about (which should mean that it isn ’ t worth litigating) The only time when mediation is a bad idea is when the subject matter isn ’ t worth talking about (which should mean that it isn ’ t worth litigating)

Arbitration Clauses Make sure that your client understands that the arbitrator is not required to follow the law Make sure that your client understands that the arbitrator is not required to follow the law If you want the right to appeal, you need to set a mechanism outside of the courts If you want the right to appeal, you need to set a mechanism outside of the courts Limitations on discovery may, or may not, be to your advantage Limitations on discovery may, or may not, be to your advantage Establish qualifications for the arbitrator(s) Establish qualifications for the arbitrator(s)

Questions And Answers Hopefully we have inspired you to think about your profession in a new manner Hopefully we have inspired you to think about your profession in a new manner