I’ve advised people for years not to sign the other side’s purchase orders, acceptances, quotations, and other ordering documents unless the documents have been fully negotiated. That’s because it puts you at a huge disadvantage in the battle of the forms.
I’ve also advised people to negotiate terms that are essential — even if they don’t sign a fully-negotiated contract — and have both parties sign a document setting out those terms, because you can’t win the battle of the forms. So if — as a seller — a 12-month limited warranty and liability cap in the amount of your product’s purchase price are important to you, you should make sure that you and your buyers sign contracts agreeing to those terms. Otherwise, you’ll probably end up with a broad, four-year warranty and unlimited liability (the defaults under Article 2 of the Uniform Commercial Code, which governs contracts for the sale of goods).
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Sometimes the boring standard provisions in the back of a contract can really be brutal.
Take this scenario, for example:
- Your company books a trip on a cruise ship and signs a contract to charter the ship.
- It’s the spring of 2001 and you have the foresight to obtain verbal assurances and a letter from the cruise company stating that in the event of war or an act of terrorism, it will work with you to reschedule the trip or refund your prepayment. [click to continue…]
A New Jersey appellate court recently refused to enforce an online forum selection clause that was contained in a browsewrap agreement, but it stopped short of holding that browsewraps are unenforceable as a matter of law. The case is interesting because of the comparisons the court draws with the influential and well-known case of the United States Court of Appeals for the Second Circuit Specht v. Netscape Communications Corp. and the New Jersey case Caspi v. Microsoft Network, L.L.C. (It’s also interesting because the case involves the online purchase of a “performance-enhancing” supplement known as “Erection MD,” but I digress.) [click to continue…]
South Park has never sustained my interest, but this clip, which I discovered on mashable.com, is downright funny. In the clip the green-capped character (Kyle, according to chacha.com) finds that he agreed to much more than he bargained for when he clicked on the iTunes terms.
Let’s face it, no one reads online terms and conditions. Admit it, you don’t read them either. I know you don’t, because I don’t. And I read user’s manuals (and file them). I never quit a book until I’m finished, no matter how bad the book is. I read the dust jacket, copyright page, table of contents, preface, introduction, footnotes and endnotes, bibliography, and often well into the index. And God help me if the first volume of a trilogy is a dud.
But I’m not likely to spend half an hour slogging through terms and conditions when I’m downloading software, paying my credit card bill, buying something on Amazon, or signing up for a social media service. But maybe I should…. [click to continue…]
I’ve been asked on occasion whether a company can post its standard terms and conditions online and incorporate them into their contracts by inserting a reference in each contract to the online terms. The answer in many cases is yes, but there are some issues to navigate. This excellent article, which appeared in the April 2010 newsletter of the Business Law Section of the North Carolina Bar Association contains an overview of the issues involved, as well as some helpful recommendations.
In this recent post I discussed some habits that businesses can adopt to increase their contract hygiene. These practices, which can improve a business’s health, are inexpensive and effective, yet often neglected.
To recap, the first three habits are:
- Negotiate before you sign.
- Give important contracts special attention.
- Don’t sign the other side’s boilerplate terms and conditions. [click to continue…]
I’ve long thought that the “battle of the forms” is easy to lose but impossible to win. That’s the perspective of a commercial attorney who approaches the issue from the front end—where the battlefield consists solely of varied hypothetical future situations. A litigator on one side or the other, of course, wins each battle that goes to trial.
The battle of the forms refers to the common practice of doing business via purchase and sale documents containing “small print” boilerplate and the interaction of each party’s boilerplate in determining the actual contract terms. [click to continue…]
“As few as 50% of restaurant workers wash their hands.” I was introduced to that disturbing stat during a presentation about some sort of high-tech handwashing tracking device that could monitor which employees were washing their hands. I’m not sure whether it was mounted to the sink or the soap dispenser or exactly how it worked—I was a bit distracted by the thought that the folks who worked at my favorite restaurants might be on the wrong half of the curve.
This had an oddly familiar ring to it. A simple practice, inexpensive, effective. Yet often neglected. Just like the contracting practices of a lot of businesses. [click to continue…]
Ever wonder why governing law provisions in contract boilerplate include a variation of the parenthetical “without giving effect to such state’s conflicts of law principles”? The answer is renvoi, which could result in the application of the laws of a state other than that chosen by the parties if the chosen state’s conflicts of law principles are followed.