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The In-House Advisor

Published by Shepard Davidson & Renee Inomata

The Validity of Oral Modifications and Waivers Is Not Always Intuitive

Posted in Contracts

In an ideal world, any modification of a contract would be in writing, signed by the parties, notarized and witnessed by an independent third party. In the real world, not only are contracts modified, or terms waived, without all of those formalities; but it is not at all unusual for business people to modify agreements orally with little more than a handshake.  Nevertheless, the enforceability of a specific oral modification or waiver can be as unpredictable as the New England weather. Continue Reading

Beware: Sending A Text Message Can Be Just as Binding as Signing a Document By Hand!

Posted in Contracts

We have all heard stories about the dangers of social media, whether it be an inappropriate tweet, a regrettable Facebook posting or a misdirected “sexting.” The decision issued by the Massachusetts Land Court in St. John’s Holdings, LLC v. Two Electronics, LLC  adds another peril to that list. It held that a text message sufficient to satisfy the signature requirement under the Statute of Frauds.  Continue Reading

Even Conduct That Is Not Barred by a Contract Can Lead to Contract Damages

Posted in Contracts, Pre-Litigation Considerations, Settlements and Releases

In Exercising Contractual Rights Can Be Risky If It Is for an Ulterior Purpose, I discussed how a business can subject itself to multiple damages and attorneys’ fees under Mass. General Laws, Chapter 93A if it attempts to enforce its contractual rights maliciously. In a recent, parallel decision, Robert and Ardis James Foundation v. Meyers, the Supreme Judicial Court held that a party can be liable for contract damages – even if it does not breach the terms of the agreement – if it acts in bad faith and deals unfairly towards its business partner.   Continue Reading

Whistleblower Immunity Required Under Defend Trade Secrets Act

Posted in Compliance, Policies & Notices, Confidentiality, Contracts, Noncompetition & Other Restrictive Covenants

whistle blower trade secretsThe new Defend Trade Secrets Act (“DTSA”) allows owners of trade secrets to now bring a civil action in federal court to protect their trade secrets and confidential information. Further, under the DTSA, a trade secret owner may be awarded actual damages, injunctive relief, restitution, the extraordinary relief of ex parte seizure orders and, if there is willful or malicious misappropriation, exemplary damages (up to double damages) and attorneys’ fees. Although the DTSA is a big win for employers seeking to protect their trade secrets and confidential information, employers may be precluded from being awarded exemplary damages and attorneys’ fees if the employee’s confidentiality agreement does not contain an express exception for disclosures related to whistleblowing.

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Consider Liquidated Damages to Deter Employees From Misappropriating Company Information

Posted in Confidentiality, Contracts, Hiring, Liquidated Damages

It is not unusual for employment agreements to mandate that when an employee leaves a company, whether voluntarily or by termination, he or she must return all company information. As the employer in EventMonitor v. Leness recently learned, however, relying on the courts to enforce such an obligation is risky, at best. Continue Reading

Be Careful What You Ask for When Agreeing to Arbitration

Posted in Arbitration and Mediation, Contracts, Pre-Litigation Considerations

In 2014, I posted Carefully Craft Your Arbitration Clause if You Want Some, But not All, Disputes Arbitrated.  A decision a few months ago, Trustivo, LLC v. Anthem, Inc. is a reminder that if a contract has a broad arbitration provision, a party may have little chance of getting court intervention – even in situations  where the general validity of the contract is challenged – unless an appropriate carve-out is inserted.

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How to Ensure that an Agreement to Negotiate in Good Faith Is Enforceable

Posted in Contracts, Letters of Intent

As I discussed in a prior blog post, agreements to negotiate in good faith can be enforceable. Nevertheless, I recently was reminded when re-reading Schwanbeck v. Federal-Mogul Corp., that if you really want an agreement to negotiate in good faith to be enforceable, you have to be precise in how you describe what the parties will and will not do going forward. Continue Reading

Choose Words Carefully in Dispute-Related Contract Clauses

Posted in Contracts, Jurisdiction, Venue and Choice of Law

A couple of words here or there in a contract can make a huge difference, particularly when those words relate to what happens if there is a breach or some other dispute between the parties. This is something that the parties in Family Endowment Partners, L.P. v. Sutow recently learned – to the tune of millions of dollars. Continue Reading

Be Careful When You Decide to Breach a Contract

Posted in Contracts, Pre-Litigation Considerations

M.G.L. c. 93A (i) prohibits deceptive or unfair acts or practices in trade or business, (ii) mandates that a defendant reimburse a prevailing plaintiff for its reasonable attorneys’ fees, and (iii) allows for the recovery of at least double and up to triple damages if the defendant acted knowingly or willfully. Thus, it is one of the most potent weapons in a business litigation arsenal. As I have written previously, leveraging another to settle a dispute can violate Chapter 93A, as can exercising valid contract rights, if the motivation in doing so is ulterior. While a mere breach of contract, without more, is not a violation of the statute, a recent case from the Massachusetts Superior Court presents a stark reminder that whether conduct is viewed as a “mere breach” or part of a deceptive or unfair course of conduct can be in the eye of the beholder. Continue Reading

Give Employees a Chance to Explain Before Terminating Them

Posted in Contracts, Discipline & Performance Management, Hiring, Pre-Litigation Considerations

As regular readers of this blog know, a day that is scheduled to be filled with relatively routine and non-controversial matters can get turned upside and require immediate action without any advance notice. One such situation occurs when information comes to light that an employee is unfit to continue in his or her current position and should be terminated. Even if in-house counsel and the business decision-makers have complete confidence that the information justifies termination, however, there is a risk associated with not giving the employee a chance to at least explain his or her actions.

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