The BUSKLAW Newsletter

( Author's Note: This post was first published in the 9/26/2016 edition of the Grand Rapids Business Journal  available here . But I've reproduced it for the sake of maintaining my newsletter's continuity and in case the link ever becomes unavailable. Also, the GRBJ didn't publish the neat wolfman graphic!) _______________________________ We all know that various beasties lurk about in October, the month of Halloween (Busklaw HQ is appropriately decorated), but beastly provisions can also lurk in contracts, ready to cause misery to the unwary. This is exactly what happened to a Massachusetts food distributor, Siegel Egg Company,  in a contract for the purchase of frozen blueberries from Naturipe Foods , the marketing arm of the Michigan Blueberry Growers, in a Kent County Circuit Court case (Naturipe Foods LLC v Siegel Egg Company, Inc).  In 2011, Naturipe submitted a written offer to sell a large quantity of frozen blueberries to Siegel in multiple shipment...

Forming (or not forming) a contract in the digital age can be a tricky business. Millennials in particular are more accustomed to negotiating deals not by exchanging offers, counteroffers, and acceptances as email attachments requiring signatures, but by emails, text messages, and social media exchanges. And each of these channels can easily include emojis :  those funny little pictographs that are fast becoming ubiquitous in our digital lives.   But this casual approach can lead to confusion in contract negotiations. Before we discuss how, let's review basic legal principles of forming a contract under Michigan (and many other jurisdictions') law:  Verbal Contracts . Verbal contracts are generally enforceable if their subject matter isn't real estate, or goods priced at $1,000 or more. (Note to my IT clients: software programs are not "goods," so beware informal statements that can be construed to form a license agreement.) But there are problems of provin...

In my experience, business professionals devote most of their energy in forming a new service agreement to the up-front stuff: the who, what, where, when, and why of deal. And the lawyers on both sides are prone to do the same, except for including typical term and termination for cause provisions. No one is particularly concerned with unwinding the business relationship after the contract terminates. This can result in frenzied activity and extra cost when either party finds loose business ends that the contract doesn't address, resulting in a poor transition to either a new service provider or to the customer if the customer decides to perform the services with its own personnel. So almost any service contract - technology or otherwise - can benefit from a carefully-worded transition - or disentanglement - provision. The content of a disentanglement provision depends on the facts of each deal, including the nature of the services, but here are the points usually covered: ...

A non-disparagement clause in a commercial contract discourages one party from saying bad things (whether or not true) about the other party. The clause is  common in litigation settlement agreements and employee termination agreements. In the latter, the purpose of a non-disparagement clause is to prevent the former employee from criticizing their former employer after the discontinuation of employment. In a litigation settlement agreement, this clause is included so that new customers (or vendors) won't be discouraged from doing business with the settling parties.  As a general rule, a non-disparagement provision in a non-consumer contract is valid and enforceable. But damages resulting from their breach may be difficult to prove, because what is your reputation worth before compared to after the provision has been breached? You would likely be forced to hire expert witnesses to testify about reputational damage substantiated by customer or social media surveys; in...

Until 1800 or so, lawyers who drafted contracts in the U.K. were called scriveners, and they were paid by the number of words in their documents. More words resulted in more money. This encouraged the use of excessive words in contracts - and the legal mumbo jumbo that plagues the legal profession to this day.  "Empty" words in a contract are more than just unnecessary; they create ambiguity, cause confusion, incite litigation, and increase the time it takes to read and understand a contract, especially for the business folks who must understand the contract to effectively administer it.   Most contracts (especially the forms that you can download from LegalZoom and R ocketLawyer - excuse me if I don't give you the links) contain empty words, and these are some of the worst offenders: Archaic words. At the beginning of a contract, you'll often see a paragraph with the heading "Recitals" followed by several "Whereas" clauses and conclud...

“I’m a lawyer. I solve problems you never knew existed with words you don’t understand.” On the internet, you can buy a t-shirt bearing this indictment against lawyers. But is this allegation credible enough to be displayed to the public - or is it cringeworthy? Let’s pull it apart and see where we end up! This is a true story. In the 1980s and 90s, a local real estate agent (call him Steve), owned a series of family restaurants in the small cities surrounding Grand Rapids, Michigan. Each restaurant had a PA system that re-broadcast local radio stations to Steve’s customers. One day, an ASCAP representative visited one of Steve’s restaurants, heard the radio station on the PA, and asked the manager if the establishment had a license to re-broadcast the music. The manager referred the ASCAP representative to Steve, who promptly told the representative to “pound sand.” Steve used his common sense to conclude that if he could listen to radio stations in his car or at home witho...

(Author’s Note: I originally wrote this post for Y2K, but I’ve updated it using plain English.  Happy April Fool’s Day 2016!)             A standard force majeure contract clause, where "Acts of God" excuse one party from performing their obligations without that non-performance being a breach of contract, are so 20th Century. So what if fire, flood, hurricane, snowstorm, or riot excuse contractual non-performance. Those events are too mundane to contemplate! Contract lawyers desperately need a force majeure clause for the clear and present dangers of the new(er) millennium! So, as a public service to the legal profession, I’ve assumed the heavy burden of drafting a "new age" force majeure clause for my colleagues to freely use: Either party's non-performance of this agreement will be excused to the extent that it is caused by the occurrence of any of the following events or circumstances: (i) Alien abduction, alien i...