Shep Davidson


Time-honored precedent holds that “[a]n agreement to reach an agreement is a contradiction in terms and imposes no obligation on the parties thereto.”  Thus, as I discussed in a prior post, a letter of intent (LOI) will not be binding if it does not contain all of the material terms of the contemplated agreement.  But what happens if there is an open material term, and the parties agree to “negotiate in good faith” towards resolving that outstanding matter?  That is exactly the situation addressed by the Delaware Supreme Court in Siga Technologies, Inc. v. Pharmathene, Inc.… Keep reading

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How an Outsider’s Presence Affects the Attorney-Client Privilege


On more than one occasion, an in-house counsel has been summoned to a strategy meeting about a potential or ongoing dispute, and when he arrives, he finds an outside accountant already seated in the conference room ready to participate in the meeting.  At this point, the in-house counsel’s gut reaction usually is to ban the accountant from the meeting so that the attorney-client privilege will not be destroyed.  While excluding the accountant from the meeting may ultimately make sense, making that judgment without some serious reflection could deprive the client of insights that may come with little or no risk and/or may be worth the risk of waiving the privilege.… Keep reading

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The attorney-client privilege remains a topic on the mind of many in-house counsel.  I’ve written about it several times before, and on September 12 at 1:00 P.M., I am presenting a webinar with a live Q&A session on the attorney-client privilege with Commercial Law WebAdvisor.  Among other topics are the following:

  • When the presence of experts or other non-attorneys will or will not destroy the privilege
  • How the attorney-client privilege applies when the client is a corporation or other organization
  • How the privilege applies when the attorney is in-house counsel
  • What happens to the privilege when the client dies, ceases to exist or is sold
  • What risks a party may run by invoking the attorney-client privilege

If you have any interest in attending, please click here for more information about the webinar and pricing.… Keep reading

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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

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Many companies have bonus plans that require the employee to be employed through a certain date before the right to be paid vests.  If such a plan is in place, any employee terminated reasonably close to the vesting date is likely to demand payment of the bonus, claiming that his termination was a ruse designed to avoid the company’s obligation to pay him.  Unfortunately, employers who legitimately terminate employees near such a vesting date often get leveraged into paying monies that they legitimately should not have to pay because a contingent fee attorney has threatened to sue.  In Weiss v. DHL Express, Inc., however, the First Circuit implicitly gives employers a road map as to how they may be able to avoid such issues.… Keep reading

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In a prior post, I discussed how a letter of intent could constitute a binding agreement even if the parties contemplated that they later would execute a full-blown contract.  Last month, the Federal District Court in Boston went one step further and ruled that a series of e-mails constituted a binding agreement to settle a litigation even though a settlement agreement and related documents never were executed.… Keep reading

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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

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A Right to Match Can Provide Multiple Benefits


Photo Credit: David W. Leindecker

A client recently forwarded me an article about a lawsuit that Oakley brought against Nike and golf wonder-boy Rory McIlroy.  In that suit, Oakley claims that as part of its endorsement agreement with McIlroy it had a right to match any new endorsement proposals made to McIlroy.  Nevertheless, after Nike made a proposal to McIlroy, the golf star refused to consider Oakley’s tender of a match.  While it appears that Oakley’s claims in that case will rise or fall based on whether McIlroy/Nike can prove that Oakley waived its right to match, the dispute reminded me that rights to match (sometimes denoted as  “rights of first refusal”) can turn out to be extremely valuable assets in a host of contexts.

Perhaps the most common use of rights to match arises in the context of restrictions on the transfer of equity in a closely held business.  Indeed, without such restrictions, a competitor might easily be able to buy out a minority equity holder and instantly gain access to key company data.  Even if that is not a genuine concern, those involved in a closely held business generally do not want a stranger to suddenly … Keep reading

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Memorializing an agreement in a written contract serves two primary purposes.  First and foremost, a written contract should clearly set out the deal terms so that there is little or no chance of a misunderstanding as to what the parties’ rights and obligations are.  Further, to be sure that they get the deal terms right, in-house counsel often turn to business people involved in the deal because they are the experts on the deal terms. 

The second reason to have a written contract is to set out the “Rules of Engagement” that will apply if a dispute arises between the parties.  Such Rules, on which I have written in other posts, include choice of law provisions, forum selection clauses, liquidated damages provisions, and arbitration clauses, just to name a few.  Surprisingly, however, and in contrast to in-house counsels’ willingness to consult with business people about the deal terms in a contract, in-house counsel often are reluctant to consult with experts on the Rules of Engagement, i.e., experienced litigators.  Whether the reason for this is a psychological aversion to placing too much emphasis on what might go wrong with a deal before it is fully in … Keep reading

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