Keeping Everyone on the Same Page: Plain Language in Contract Negotiation

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Moses Fox
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2 Keeping Everyone on the Same Page: Plain Language in Contract Negotiation Breakout Session #: E03 Presented by: Alicia Rigdon, ViaSat Inc. Date: Tuesday, July 25 Time: 2:30-3:45 1

3 You must first understand the LANGUAGE CONTRACTS = LANGUAGE Attempts to interpret a word, term, or clause independently from the remainder of the contract can distort its meaning and not accurately reflect the intent of the parties. 2

4 Joke of the day What do you get when you cross the Godfather with a lawyer? An offer you can't understand. 3

5 Contracts Government Contracts Commercial Contracts o Domestic o International Purchase Orders SOW Attachments Contracts Professionals need to review: Special Provisions 4

6 We All Understand Our Own Language Right? Contracts professionals must draft/review contract language with same precision engineers use to design state of the art technical marvels 5

7 When Drafting Contract Language. Think about how what is said in one Article or Section will impact other parts of the contract. Remember issues surrounding contract interpretation. What the heck is flexible language?. 6

8 Special Provisions Can be used to craft unique language in any contract Federal Contracts typically document Special Provisions in Section H Necessary to ensure the expectations of the parties will be met Drafting Special Provisions What is the situation/concern? What is the solution? Does the language drafted clearly capture expectations? 7

9 Problem 1 Revise the following clause INDEMNIFICATION AND INSURANCE. Buyer hereby acknowledges that the deliverables furnished hereunder are explosive in nature and may be inherently dangerous. It is further acknowledged that the loading and handling of these products are thus attendant to risk to personnel and property. Buyer upon taking delivery of these products assumes all risks of loss, damage or injury to person or property by explosion, fire, or other causes whether caused by process or product, even if they result from Seller s contributory (but not sole) negligence, and Buyer shall defend, indemnify, and hold Seller harmless there from, provided, however, that Buyer shall be under no such obligation (a) for losses that are determined, by a final and non-appealable judgment, to have been caused solely and exclusively by the negligence of Seller, or (b) for defense obligations assumed by the Government and losses against which the Government has protected the Seller through indemnification under PL or otherwise. Notwithstanding the existence or lack of insurance and as an unrelated matter, Seller shall defend, indemnify and hold Buyer harmless from any losses, claims, demands, or suits (including those from Seller s employees) for bodily injury (including death) or property damage arising out of Seller s performance of this Purchase Order and prior to the delivery of the Goods to Buyer, unless the Government has an obligation to defend and indemnify the Buyer against such losses, claims, demands and suits under PL or otherwise. If Seller is to perform work on the premises or within facilities owned or controlled by Buyer, Seller shall be solely responsible for the safe conduct of such work and the protection of the premises or facilities, and of any person on the premises or facilities. If, and to the extent, Public Law Indemnification is provided by the Government, Buyer shall use reasonable efforts to flow such indemnification to Seller. In no event shall either Party be liable, for any reason or arising from any cause whatsoever, for special, incidental, exemplary, punitive or consequential damages including, but not limited to, loss of profits or revenue. The cumulative total liability of the Seller, shall not exceed the total of the Purchase Order (the 'Seller's Liability Limit ) and Buyer waives, surrenders and releases any obligation or liability of the Seller to Buyer in excess of the Seller s Liability Limit. To the extent Seller is required by this Purchase Order to insure against loss or damage to property of Buyer, (i) insurance policies of Seller shall disclose the interest of Buyer; (ii) those policies shall contain an endorsement that no cancellation or material change in the coverage adversely affecting the interest of Buyer shall be effective unless Seller or the insurer gives written advance notice of cancellation or change, and unless Seller has complied with such other direction as may be given. 8

10 Problem 2 The Watson company was awarded a contract modification in the maintenance activities supporting the for operations of a government facility. This work is predicated upon the use of commercial practices. The original scope of work for this contract has several general and special provisions and cites military standards that may conflict with the use of commercial practices. Program manager, Mr. Sherlock, is concerned that a conflict within the contract will create uncertainty about the use of commercial practices for this effort. What is a special provision that could address this concern? 9

11 Problem 3 Define the word clean 10

12 Key Clauses Definitions Payment Terms Warranty Limitation of Liability Changes Terminations Remedies/Governing Law Non-Disclosure of Proprietary Information Intellectual Property Rights 11

13 Keeping everyone on the same page means making Contract Language. Be as CLEAR as POSSIBLE and AVOID LEGALESE where possible! 12

14 Contact Information Alicia Rigdon

Negotiating and Drafting Patent Indemnification Provisions. October 6, 2011 Ira Schreger Vinson & Elkins LLP

Negotiating and Drafting Patent Indemnification Provisions October 6, 2011 Ira Schreger Vinson & Elkins LLP Agenda General Considerations Implied Warranty for Sales of Goods and Services General Drafting