What Happens When Your Agreement Goes Michelle Pinto ?

Disclaimer This presentation provides information about the law designed to serve as guidance by increasing awareness and understanding of selected legal issues that may affect your business operations. But legal information is not the same as legal advice -- the application of law to an individual's specific circumstances. Although we go to great lengths to make sure our information is accurate and useful, we recommend you consult your attorneys for professional assurance that the information, and your interpretation of it, is appropriate to your particular situation.

Roadmap of Presentation Ways to Bypass Adversity in Contract Ways to Bypass Adversity in Contract Language Language Managing Contract Performance Managing Contract Performance Evaluating the Breach Evaluating the Breach Termination Strategies Termination Strategies

Contracting Goal To obtain a product and/or a service that meets the customer’s expectations within an acceptable timeline and for a predictable price, and to ensure adequate mechanisms are in place to address performance concerns and potential disputes among the parties

Ways to Negotiate Favorable Termination Language - Use preferred contract terms in RFP - Keep 2+ vendors in the RFP process - Don’t be unreasonable - Leverage existing agreements with vendor where possible vendor where possible

The Balancing Act One the One Hand On the Other… Lowest Price Maximize Price Work until complete Get in & Out Decrease Spend Increase Revenue Pay on Results Pay on Time

Contract Terms Termination Clauses Why? - With or Without Cause When? - Immediately upon breach (or after expiration of cure period)

Contract Terms Reasons to Terminate Reasons to Terminate  Cause (breach of agreement, confidentiality, warranty)  Change of control, assignment of agreement  Ethical reasons  Violations of law or change in law that would affect performance of agreement  Bankruptcy  Convenience

Contract Terms Warranties Warranties –UCC Warranties –Service Warranty –Software Warranties Interoperability Interoperability Backwards Compatibility Backwards Compatibility Virus/Use of Open Source Software Virus/Use of Open Source Software –Product Life Cycle Warranty –Integration Warranty

Contract Terms Liability Limitations Liability Limitations –Indirect Liabilities – disclaimer of indirect, consequential, special or punitive damages –Monetary Limitations on Direct Damages

Contract Terms Dispute Resolution Clauses Dispute Resolution Clauses –Required Negotiation/Mediation Clauses –Arbitration –Forum Selection/Litigation/Jury v/ Non- Jury awards –Choice of Law –Equitable Relief (injunctions, TROs)

Contract Terms Boilerplate Clauses Boilerplate Clauses –Survivability –Waiver –Cumulative Remedies –Time is of the Essence –Prevailing Party

Contract Drafting Rules Avoid Ambiguity Avoid Ambiguity Level Set Expectations Level Set Expectations Be Able to Answer 5-point Question with Deliverables Be Able to Answer 5-point Question with Deliverables Be Clear in Contract Language Be Clear in Contract Language COMMUNICATION IS KEY!!! COMMUNICATION IS KEY!!!

Contract Performance Notice of Performance Issues Follow Up – demand letter, invoke remedy rights if available… Talk to Legal Counsel

Breach of Contract Minor Material Party gains substantial no benefit of benefit the bargain immediate right to remedies

How You Do Determine Whether a Breach is Material? Amount of benefit receive Amount of benefit receive Adequacy of damages Adequacy of damages Extent of part performance Extent of part performance Hardship to the breaching party Hardship to the breaching party Negligent or willful behavior Negligent or willful behavior Likelihood of full performance Likelihood of full performance

Taking It To The Next Level Discourage litigation. Persuade your neighbors to compromise whenever you can. As a peacemaker the lawyer has superior opportunity of being a good man. There will still be business enough. Abraham Lincoln When will mankind be convinced and agree to settle their difficulties by arbitration? Benjamin Franklin

Paths to Dispute Resolution  Contract Language  ADR  Litigation  Settlement

Attorney Client Privilege A communication between lawyer and client is "confidential" if it is not intended to be disclosed to third persons other than: 1. Those to whom disclosure is in furtherance of the rendition of legal services to the client. 2. Those reasonably necessary for the transmission of the communication. Fla. Stat. § (2007)

Discovery Relevance – any tendency to make a fact more or less probable – Federal Rule of Evidence 401 Relevance – any tendency to make a fact more or less probable – Federal Rule of Evidence 401 Admissible – question of law determined by judge, e.g., documents, conversations, observations Admissible – question of law determined by judge, e.g., documents, conversations, observations

eDiscovery Rule 26(a): Provisions Governing Discovery; Duty of Disclosure Party must provide description by category and location of all documents, electronically stored information, and tangible things in their control and which they may use to support their case

EDiscovery Safe Harbor Court May Not Impose Sanctions For Failure to Produce electronically stored information as Result of “Routine,” “Good-Faith” Destruction of Information as Routine Operation of System

When all else Fails… Creative Settlements Creative Settlements Credits on future payments Credits on future payments Explore other existing or potential future relationships with party for leverage Explore other existing or potential future relationships with party for leverage

Questions? Any area or points not covered? Any area or points not covered? Other questions? Other questions?