The BUSKLAW Newsletter

If you're a fan of the Peter Jackson Hobbit movies, you may recall the intimidating contract that the Dwarves foisted upon poor Bilbo Baggins in the first movie ( The Hobbit: An Unexpected Journey ). That contract was full of legal jargon. So my colleague Michael Braem and I decided to write about it for the August, 2015 Michigan Bar Journal's Plain Language column. Here's the link:  http://www.michbar.org/file/barjournal/article/documents/pdf4article2677.pdf . For those of you unfamiliar with the first Hobbit movie, here's a link to a You Tube video showing the Dwarf-drafted contract - and Bilbo's reaction to it: https://www.youtube.com/watch?v=Z2idYEBi51c I'd like to thank Michael for our collaboration and Professor Joe Kimble for thinking out of the box for this Plain Language column. Also, much gratitude goes to the author and designer of the prop contract, New Zealand artist Daniel Reeve, for exchanging numerous emails with the authors about why ...

It's August - the dog days of summer. The time when the heat is to some of us a bother rather than a comfort. So as we enjoy our favorite adult beverage around a sprinkler, pool, or larger body of water, let's talk about a vital purpose of any contract: the promotion of trust and transparency between the parties . Or to put it another way: a contract should express the parties' honest  business purpose in a clear and comprehensive way, with no sneaky surprises ("gotchas") that could someday surface to cause unforeseen problems.  A short amendment to a contract between my client and a major vendor once crossed my desk. The purpose was to adjust the pricing formula of a commodity that my client purchased from the vendor. The parties had been doing business together for the last seven years without any problem requiring a lawyer's involvement.  I was reading the amendment and was about to approve it when a section captioned Release caught my eye. T...

I just finished the excellent article "13 Things System Administrators Hate About IT Vendors" by Jeff James at Petri IT Knowledgebase . Here are those 13 pain points: Sales reps who don't know their own products. Over promise, meet under deliver. It's a software problem! No, it's a hardware problem! One size fits all documentation. Vanishing support after the sale. Putting down other vendors. Configuration fails. Outsourced telephone tech support. Customer-hostile online support. Abusing a monopoly position. Throwing [system] admins under the bus to make a sale. Getting what you pay for. Clueless consultants. Good news! Well-drafted contract documents between the IT vendor and customer can mitigate many of these issues. Here's how: First, the customer should base its selection of an IT vendor on the vendor's written response to a carefully-prepared Request for Proposal ("RFP"). In my experience, IT customers don't s...

When we last left our two IT professionals - Steve the IT manager at Beta Corporation and Bosco the IT lawyer - they were at Brewery Vivant , discussing the business precautions that should be taken when Acme Software's contractors are developing the Next Big Thing software program for Beta Corporation. After downing a modest number of Undertaker  ales, the guys now talk about a contract between Acme (the software developer) and Beta (its customer) .  Bosco: I suggest that Beta have a Software Development and Services Contract with Acme. Steve: That sounds like big bucks in legal fees! And what if Acme refuses to sign it?  Bosco: If Acme is a reputable software development company and is interested in keeping Beta as a customer, they should have no problem signing a contract of this nature with a minimum of negotiation. They've probably signed similar contracts with other clients! About my fee to prepare this contract, because I've drafted similar ...

The folks at the U.S. Treasury Alcohol and Tobacco Tax and Trade Bureau  (ATTB) have a lot of time on their hands. Otherwise, what would account for their draconian efforts to prevent Mira Winery, a reputable Napa Valley vintner, from exploring the aging effects of seawater on a small sample of their wine production?  As Mira's President, Jim Dyke, describes in "The Wine-Dark Sea of Regulation" in today's Wall Street Journal, Mira decided to see if "intentionally submerging wine bottles for months at a time could speed the aging process and enhance flavor." So, they submerged 28 bottles of their 2009 Cabernet Sauvignon in steel cages 60 feet under the waves in Charleston Harbor, where "there exists a promising blend of temperature, pressure, and darkness, with the additional variable of constant motion."  To protect the wine, the top of each bottle was coated with a high-grade wax sealant.  Mira retrieved the submerged wine after three months...

Here's the scenario. You're Steve, an IT project manager for Beta Corporation. You convinced your CFO to hire Acme, a local software development company, to embed four of their guys on your premises to help your overworked IT staff create the Next Big Thing  software application. The application will use data from your network. But you're worried about giving Acme's guys access to your network! It has a lot of confidential business information, including customer data. You wonder about the business and legal precautions needed to protect your valuable data.  The Acme CEO tells you that everything is fine without a contract (other than Acme's Statement of Work that you signed last week and the NDA that Acme signed when the project went out for bids). Fortunately, you know a savvy information technology lawyer, Bosco, and decide to pick his brain during a few beers Friday after work at Brewery Vivant  in Grand Rapids, Michigan. You are drinking  the  Undertak...

Consider the letter of intent (also known as a "memorandum of understanding," a "preliminary agreement," or other innocuous-sounding title). Some business folks believe that a surefire way to do a deal at the last minute (and no reason to bother their lawyer at 5 PM on a Friday!) is to sign a letter of intent ("LOI"). The typical LOI is a short agreement that states some - but not all - of the terms of the deal, contemplating that the parties will eventually sign a complete or definitive agreement ("DA") that will state all of the deal's provisions, both business and legal. LOIs are inherently troublesome (an "Invention of the Devil" according to one lawyer) because the parties to a LOI may disagree on its legal significance. One party may view the LOI as obligating the parties to sign a DA at a future date, even if a disagreement develops over the provisions in the DA that the LOI didn't address. The other party may regar...