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. … Keep reading
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.… Keep reading
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.… Keep reading
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.… Keep reading
Letters of intent (LOI) are routinely used after business people have reached some degree of common ground on a potential deal. Sometimes an LOI comes very early on, before the parties know whether an ultimate agreement is likely or not. In other situations, however, LOI’s are entered into only after there is agreement on all the key business terms. Even in those cases, however, deals often crater during the process of negotiating a full-blown contract. This can be the result of one side simply getting cold feet and/or otherwise changing its mind about moving forward. Further, all too often the party left at the altar can do nothing but lament the fact that it expended a lot of time and money with nothing to show for it. Here are two strategies in-house counsel might consider employing in the LOI process to limit the risk that they have to go back to their internal client and explain that even though there was a letter of intent, the other side walked away from the deal and there is nothing that can be done about it.… Keep reading
In Be Clear if You Want to Have a “Third-Party Beneficiary” in Your Contract, I discussed that if in-house counsel wanted to ensure that a person or entity achieved the status of a third-party beneficiary, it was critical to have language in the agreement that plainly said this. A 2013 decision from the District of Massachusetts, Pollak v. Federal Insurance Co., highlights the importance of this from the perspective of the third-party beneficiary.… Keep reading
Two weeks ago, I posted Carefully Craft Your Arbitration Clause if You Want Some, But not All, Disputes Arbitrated. The recent case of Biotronik A.G. v. Conor Medsystems Ireland, Ltd., is a reminder to in-house counsel that specificity also can be critical if you want to limit the company’s liability in the event of a breach.… Keep reading
As I discussed in a prior post, the substantive law applicable to a dispute can have a tremendous impact on its outcome. But what about the procedural law of the jurisdiction where a suit is being litigated? If that jurisdiction is Massachusetts, the procedural law can have a potentially game-changing impact – even if the substantive law of another jurisdiction will be applied to the underlying claims. Further, hauling an out-of-state person or entity into Massachusetts to defend a suit may be easier than you think.… Keep reading
Many businesses use standard form contracts which may or may not be negotiable by a potential business partner. It is not unusual for such a contract to include a provision like the following:
In order to accept this Contract, you must have an authorized representative execute it where indicated and return the signed original to the Company within 10 days of the date appearing on the first page hereof.
Because, as noted in a recent blog post, a series of emails can form a binding agreement, and in another blog post, it was discussed that an email could satisfy the signature requirement of the statute of frauds, one would expect that an email to the Company, stating: “We have your contract, and we agree to its terms” would create a binding contract (assuming, of course, that such an email was sent within 10 days of the date of the contract). In Host v. Gray, however, a Massachusetts Superior Court Judge ruled that an email purporting to accept an offer was insufficient because the offer stated that it should be “signed … and returned ….”… Keep reading
In a prior post, I noted that if you want all disputes between contracting parties to be resolved in one and only one specific forum, it is imperative to expressly state this with great clarity in your agreement. In light of the Massachusetts Appeals Court’s recent decision in Try Switch, Ltd. v. Endurance International Group, a similar approach should be taken if a contracting party wants a non-party to be a bona fide “third-party beneficiary” who is legally permitted to enforce some right or obligation under that contract.
In Try Switch, the plaintiff sued Endurance International Group in the Massachusetts Superior Court for breach of contract, and Endurance moved to dismiss for improper venue. More specifically, Endurance argued that it was the third-party beneficiary of a contract between Try Switch and ValueClick International, and that contract included the following provision:
The exclusive forum for any actions related to this [a]greement shall be in the [c]ourts in Dublin, Ireland.
While the Superior Court agreed with Endurance and dismissed the case, the Appeals Court reversed. In doing so, the Appeals Court first acknowledged that even though no Massachusetts case addresses the issue as to whether a non-party to … Keep reading