Let's Shake On It - Contracts in MR by Joe Durkee, Esq.


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Portland attorney Joe Durkee offers advice on how to read standard business contracts. He discusses a number of clauses common to vendor service agreements and offered counsel on how to approach them.

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Let's Shake On It - Contracts in MR by Joe Durkee, Esq.

  1. 1. Let’s Shake on ItContracts in the Market Research WorldJoe Durkee, Esq.
  3. 3. BAD RESEARCHClient Risk Bad Strategic Decisions
  4. 4. I cant get it out of my head!
  5. 5. • Lack of clarity and anything hidden• Anything complicated• Others’ greed• Competition in its own territory
  6. 6. Anything that helps survival Openness Simplicity Its’ own greed
  7. 7. • Things that hurt or scared us • Things that made you feel safe when young when young• Immobility • Mobility (ability to do what• Confinement you want when you want)• Arrogance • Itself (being alive)• Cruelty • Feeling important (your own• Loneliness power)• Liars • Altruism (a better safer community)• Hypocrisy • Gratitude• A smile without eyes• Sychophants
  8. 8. Our Social Contract
  9. 9. Individual Freedoms
  10. 10. Scarcity of resource (money, water, safety...) Motivation for competition for the resourceBelief that social interaction and cooperation = potential for gain
  11. 11. Let’s Make a Deal vs
  12. 12. Clauses To Pay Attention To Clause and Effect
  13. 13. Attorney Fees Clause“In the event of litigation relating to thesubject matter of this Agreement, the non-prevailing party shall reimburse the prevailingparty for all reasonable attorney fees andcosts resulting therefrom.”
  14. 14. Attorney Fees ClauseEffect: In the event of litigation, the loser reimburses theprevailing partys attorney fees.Take Away: You can end up paying your own attorney andthe other attorneys fees as well as the judgment andusually costs!Fees usually must be reasonable as determined by theCourt.
  15. 15. Choice of Law and Forum Clause“This agreement shall be interpreted under thelaws of the State of Bliss. Any litigation underthis agreement shall be resolved in the trialcourts of Harmony town, State of Bliss.”
  16. 16. Choice of Law and Forum ClauseEffect:• Contracts to be interpreted under the laws of a particular state or jurisdiction• Any litigation will occur within a specified jurisdictionTake Away: It costs a lot to: -travel to other states -pay for meals and housingWorking with attorneys from other jurisdictions can causeeffort coordination and communication issues.
  17. 17. Merger and Integration Clause“This Agreement and the exhibits attached heretocontain the entire agreement of the parties withrespect to the subject matter of this Agreement,and supersede all prior negotiations, agreementsand understandings with respect thereto. ThisAgreement may only be amended by a writtendocument duly executed by all parties.”
  18. 18. Merger and Integration ClauseEffect: Prevents the parties to a contract from laterclaiming that the contract:• does not reflect their entire understanding• was changed by a subsequent oral agreement• is not consistent with prior agreementsTake Away: Make sure that all promises and agreementsare actually included in the written contract. It may beimpossible to enforce those unwritten promises.
  19. 19. Indemnity Clause“X company agrees to indemnify and holdharmless Y company against loss or threatenedloss or expense by reason of the liability orpotential liability of X company for or arising outof any claims for damages.”
  20. 20. Indemnity ClauseEffect: An indemnity clause requires that one party paythe other, in the event that certain expenses are incurred.Take Away: This clause, like the attorney fee clause cansignificantly increase your exposure in the extent of anunexpected event or breach of the contract.
  21. 21. Time of Performance Clause “Time is of the essence for the completion of the work described in this contract. It is anticipated by the parties that all work described herein will be completed within two(2) weeks of the date of execution, and that any delay in the completion of the work describedherein shall constitute a material breach of this contract.”
  22. 22. Time of Performance ClauseEffect: Failure to complete the agreed upon terms in theAgreement can result in a breach of contract claim.Take Aways:• Make sure the time can be completed within the specified window• Have other clauses that excuses untimely performance such as Acts of God, War, Disruption in supply chain etc…• If time is not of the essence, consider having a clause that states as such, “The parties agree that time is not of the essence in the completion of the work described in this contract. All parties shall act to complete the work described within a reasonable time.”
  23. 23. Arbitration Clause“All disputes, controversies, or claims arising outof or relating to this contract shall be submittedbinding arbitration in accordance with theapplicable rules of the American ArbitrationAssociation then in effect.”
  24. 24. Arbitration ClauseEffect: Has the potential to take away the right to ajury trial and appellate rights a person normally has.Take Aways:• Litigation is always expensive and takes a long time• Arbitration can be much less expensive and move much more quickly• Trial is very formal whereas arbitrations can be less so• A well written arbitration clause is worth considering
  25. 25. Savings (Severability) Clause“If any provision of this Contract is heldunenforceable, then such provision, ifallowable, will be modified to reflect theparties intention. All remaining provisions ofthis Contract shall remain in full force andeffect.”
  26. 26. Savings (Severability) ClauseEffect: Meant to ensure that the contract remainsenforceable even if part of the contract is later heldinvalid.Take Away:• In the absence of a savings clause, it is possible that if a single clause is held invalid, the entire contract will also be rendered invalid• Don’t think you are going to get out of your contractual obligations just because one clause is held invalid
  27. 27. Non-Waiver Clause“The failure by one party to requireperformance of any provision of thisAgreement shall not affect that partys rightto require performance at any timethereafter, nor shall a waiver of any breachor default of this Contract constitute awaiver of any subsequent breach or defaultor a waiver of the provision itself.”
  28. 28. Non-Waiver ClauseEffect: Meant to prevent a party from saying thatthey were allowed to breach a certain provision inthe contract in the past so they should be allowed todo it forever moreTake Away:• This clause allows some flexibility in party behavior• Allows for a breach of a provision without losing the rights under that provision
  29. 29. Service Agreement Exclusion ClauseEffect: Tells the Client what they are NOT to expectunder the AgreementTake Away:While the Integration Clause states that theAgreement represents the total understanding of theparties, it is always prudent to make clear what youwill NOT be doing so the Client cannot say “but yousaid you would do that”
  30. 30. Selecting Counsel• Interview as Many as It Takes!• Counsel You Like• Shared Values• Communicate Well With (both ways)• Multiple Recommendations• Reputation in the Community• Don’t Blindly rely on- • Member of X, Y or Z Association • Ratings • “Super Lawyer” Status
  31. 31. Billing• Get a bid• Flat fee an option?• Value based billing an option?• Blended billing an option?• Understand completely how you are going to be billed!• Lawyer willing to reduce bill if request is reasonable?• Always scrutinize the bill!
  32. 32. Branding
  33. 33. It’s a Wrap