General provisions in contracts — Common Draft annotated compendium
This is a working draft of a chapter in the Common Draft™ contract form book. • An asterisk * indicates that the full text of the provision includes option definitions. • Because this is still a working draft, the provisions and commentary below are subject to change without notice. • Suggestions and feedback are welcome; please leave a comment below or email me at mailto:firstname.lastname@example.org. • Not a substitute for legal advice — please see the Cautions page. • For permissible use, please see the Use rights page. Copyright © 2012 D. C. Toedt III; all rights reserved.
Table of Contents
- GEN-01 Amendment: Signed writing required.
- GEN-02 Amendment: Unilateral amendment by [Party Name] upon 30 days’ notice.
- GEN-03 Assignment: [Party Name] must obtain consent. *
- GEN-04 Assignment – termination option for [Party Name]: 30 days.
- GEN-05 Assignment acts as delegation.
- GEN-06 Assignment: Effect of acceptance.
- GEN-07 Assignment: Written assumption upon request.
- GEN-08 Assignment: Confidentiality of nonpublic information.
- GEN-09 Attorneys’ fees to prevailing party. *
- GEN-10 Attorneys’ fees if settlement offer rejected but then not exceeded.
- GEN-11 Binding nature of Agreement.
- GEN-12 Contract interpretation – contra proferentem rule not to be applied.
- GEN-13 Copies of Agreement deemed originals.
- GEN-14 Counsel – each party has had the opportunity to be represented.
- GEN-15 Disparagement of either party by the other party is prohibited.
- GEN-16 Early neutral evaluation of disputes required.
- GEN-17 Economical Litigation Agreement.
- GEN-18 Escalation of disputes to higher management within 10 business days.
- GEN-19 Entire agreement.
- GEN-20 Forum selection: [Location], non-exclusive. *
- GEN-21 Governing law: Law(s) that apply in [Location]. *
- GEN-22 Headings for reference only.
- GEN-23 Independent contractors.
- GEN-24 Jury trial waiver for any dispute [arising out of or relating to] this Agreement.
- GEN-25 Limitation period for bringing claims: One year
- GEN-26 Mediation of disputes (non-binding). *
- GEN-27 Mini-trial of disputes to parties’ senior management
- GEN-28 No other commitment
- GEN-29 Non-recourse against other persons.
- GEN-30 Notices in writing, effective upon receipt or refusal. *
- GEN-31 Party representative: [Each party] to appoint
- GEN-32 Policy statements not to be disputed.
- GEN-33 Prohibitions apply to attempts, etc.
- GEN-34 Publicity only when agreed
- GEN-35 Redlining representation.
- GEN-36 Reliance on entire-agreement, amendment, and waiver provisions.
- GEN-37 Reliance on external representations disclaimed.
- GEN-38 Savings clause.
- GEN-39 Signers’ authorization to sign.
- GEN-40 Signature mechanics.
- GEN-41 Signers’ availability in future proceedings.
- GEN-42 Status-review conference calls
- GEN-43 Surviving provisions as enumerated.
- GEN-44 Third-party beneficiaries disclaimed except as stated.
- GEN-45 Waivers – signed writing required.
GEN-02 Amendment: Unilateral amendment by [Party Name] upon 30 days’ notice.
(a) The specified party or parties may unilaterally amend the Agreement,  or any exhibit, schedule, or appendix of the Agreement, by giving notice to the other party. Except as provided in subdivision (b), the amendment will take effect at the specified time after the effective date of the notice
(b) If the other party is unwilling for the Agreement to continue as amended, it may terminate the Agreement by giving notice to the amending party no later than the effective date of the amendment.
(c) For the avoidance of doubt, unless the Agreement expressly states otherwise:
(1) No unilateral amendment will retroactively modify agreed dispute-resolution provisions of the Agreement, if any — including for example arbitration provisions, if any — for then-pending disputes unless the parties expressly agree otherwise. 
(2) Without the non-amending party’s express written agreement, a unilateral amendment will not retroactively eliminate or modify any right already exercised by the non-amending party, including for example any right to demand that the amending party perform an obligation, under the Agreement.
(a) The specified party or parties (i) may not assign nor pledge the Agreement nor any right or interest arising out of the Agreement, and (ii) may not delegate any obligation of the Agreement, in either case in whole or in part, to any other person, without the express prior written consent of the other party or its successor in interest, as applicable, except as otherwise provided in the Agreement. 
(b) OPTIONS: The following shorthand term(s), if used in the heading of this section in the Agreement, have the specified meaning(s):
(1) Operation of Law Likewise means that an assignment of the Agreement by operation of law — for example as a result of a merger, consolidation, amalgamation, or other transaction or series of transactions — requires consent to the same extent as would an assignment to the same assignee outside of such a transaction or series of transactions. 
(2) Void Without Consent means that a putative assignment made without a consent required by the Agreement is void. 
(3) Material Breach means that a party that assigns the Agreement without a required consent commits a material breach of the Agreement. 
(4) Not to Be Unreasonably Withheld means that the non-assigning party may not unreasonably withhold, delay, or condition its consent to assignment of the Agreement by the other party. 
(5) Withholding at Discretion means, for the avoidance of doubt, that a party having the right to grant or withhold consent to an assignment of the Agreement may do so in its sole and unfettered discretion, with regard solely to its own interests as it perceives them. 
(6) Exception for Certain Asset Dispositions means that consent of the other party is not required for a transaction or series of transactions in which substantially all the assets of the assigning party’s business to which the Agreement specifically relates are acquired by the assignee, either explicitly or by operation of law. 
(7) Exception for Certain Affiliate Transfers means that consent is not required for an assignment of the Agreement to an individual or organization that controls, is controlled by, or is under common control with the assigning party. 
(8) Exception for Assignment of Rights Only means that consent is not required for an assignment or pledge of one or more rights under the Agreement, nor for a grant of a security interest in one or more such rights, whether the assignment, pledge, or grant of security interest is absolute or collateral, so long as no obligation under the Agreement is delegated. 
The specified party may terminate the Agreement, if the other party assigns the Agreement, by giving notice to that effect within the stated time after the date on which the specified party is advised in writing, by or on behalf of the other party or its assignee, that the assignment has become effective. 
GEN-05 Assignment acts as delegation.
For the avoidance of doubt, an assignment of the Agreement operates as a transfer of the as-signing party’s rights and a delegation of its duties under the Agreement, but it does not relieve the assigning party of its responsibility for performance of those duties. 
GEN-06 Assignment: Effect of acceptance.
For the avoidance of doubt, an assignee’s acceptance of an assignment of the Agreement constitutes the assignee’s promise to perform the assigning party’s duties under the Agreement. That promise is enforceable by either the assigning party or by the non-assigning party. 
GEN-07 Assignment: Written assumption upon request.
IF: The non-assigning party requests; THEN: The assignee will seasonably provide the non-assigning party with a written assumption  of the assignor’s obligations, duly executed by or on behalf of the assignee; ELSE: The assignment will be of no effect.
GEN-08 Assignment: Confidentiality of nonpublic information.
A non-assigning party will preserve in confidence any non-public information about an actual- or proposed assignment of the Agreement that may be disclosed to that party by a party participating in, or seeking consent for, the assignment. 
GEN-09 Attorneys’ fees to prevailing party. *
(a) In any action arising out of the Agreement, in any forum, the specified party will be entitled to recover its expenses and costs from the other party, in addition to any other relief that may be granted.  For the avoidance of doubt, for purposes of this section:
(1) Action refers to any action or proceeding, whether judicial, administrative, arbitral, or other.
(2) Costs refers to costs of the action, for example costs of court or of arbitration.
(3) Expenses refers to expenses incurred in connection with the action, including for example reasonable fees for attorneys and expert witnesses and the reasonable expenses of each.
(b) Expansive Application, if used in the heading of this section in the Agreement, means that the prevailing party is likewise entitled to the same recovery (i) in any action relating to the Agreement, and (ii) in any action arising out of or relating to any transaction or relationship resulting from the Agreement. 
(a) IF: In a covered dispute a party does not timely accept a covered settlement offer, each as defined below; AND: That party finally fails to obtain a result in the dispute at least 20% more favorable than the covered settlement offer; THEN: That party must pay or reimburse the offeror’s costs and expenses, including for example reasonable fees and expenses charged by the offeror’s attorneys and/or expert witnesses, that the offeror incurred in the dispute after making the offer. 
(b) A covered dispute is any action or proceeding before any tribunal, where the action or proceeding arises out of or relates to (1) the Agreement or (2) any transaction or relationship arising from the Agreement. 
(c) A covered settlement offer is a written offer that (1) expressly states that it is subject to this section, and (2) offers to settle a covered dispute. 
(d) Matters of timing and other procedural issues concerning the offer will be governed in the general manner provided for an offer of judgment under Rule 68 of the [U.S.] Federal Rules of Civil Procedure, any necessary change being made, to the extent the parties do not agree otherwise.
(e) Absent consent of the other party, each party shall preserve in strict confidence (1) the existence and details of any offer made by the other party pursuant to this section, and (2) any subsequent communications between the parties regarding any offer made pursuant to this section. 
GEN-11 Binding nature of Agreement.
(a) Each party acknowledges that it has read the Agreement; understands it; and agrees to be bound by it.
(b) The Agreement is likewise binding on the respective heirs, legal representatives, successors, and assigns of the parties, if any. (For the avoidance of doubt, this subdivision is not to be interpreted as one party’s consent to assignment of the Agreement by another party.)
GEN-12 Contract interpretation – contra proferentem rule not to be applied.
The parties agree that the contra proferentem principle of contract interpretation is not to be applied to the Agreement; that is, any ambiguity or inconsistency in the Agreement is to be resolved in accordance with the most reasonable construction and not strictly for or against either party by virtue of that party’s authorship of a relevant provision of the Agreement or of any of its interim drafts. 
GEN-13 Copies of Agreement deemed originals.
Any reproduction of the Agreement made by reliable means after it has been signed by all signatory parties is to be considered an original. 
GEN-14 Counsel – each party has had the opportunity to be represented.
Each specified party acknowledges that it has had the opportunity to be represented by counsel of its choice in deciding whether to enter into the Agreement on the terms and conditions set forth in it. 
GEN-15 Disparagement of either party by the other party is prohibited.
The specified party or parties will not disparage the other party or its products or services to customers, potential customers, or the public. 
(a) This section applies to any dispute between the parties that both: (1) arises out of or relates to (i) the Agreement or its interpretation or enforcement, or (ii) any transaction or relationship arising out of the Agreement; and (2) becomes, or appears reasonably likely to become, the subject of litigation or arbitration.
(b) At the request of either party, the parties will submit the dispute to (nonbinding) early neutral evaluation, in accordance with the Early Neutral Evaluation procedures of the American Arbitration Association then in effect if not otherwise agreed. 
GEN-17 Economical Litigation Agreement.
(a) Any dispute arising out of or relating to the Agreement or any transaction or relationship resulting from it, including but not limited to any dispute concerning breach, termination, or validity of the Agreement, whether based on action in contract, tort, or otherwise, will be finally resolved by civil litigation in accordance with the CPR Economical Litigation Agreement (2010 edition). 
(b) TRIAL WILL BE TO A JUDGE SITTING WITHOUT A JURY, except that, in jurisdictions where advance waiver of jury is prohibited as a matter of law, or where all parties to the Agreement subsequently agree in writing, trial will be to a jury. 
(a) The parties will jointly refer any disagreement between them to their respective higher management levels,  including executive-level management where appropriate,  whenever requested in writing by either party. 
(b) Upon a request for escalation, each party will advise the other party in writing of the name and contact information of a senior representative (i) who has authority to settle the dispute on behalf of the advising party, and (ii) is available for the meeting required by subdivision (c) below.
(c) The parties will cause their respective senior representatives (i) to meet and confer about the dispute, by telephone, video conference, or in person, within the specified time period; and (ii) at such meeting or meetings, to make a good-faith effort to settle the dispute.
(d) The party making the request for escalation will coordinate reasonable meeting arrangements. Each party will be responsible for its own expenses of the senior representatives’ meeting.
(e) OPTION: The term Failure to Escalate Forfeits Attorneys’ Fees, if used in the heading of this section in the Agreement, means that IF: A party refuses to escalate a dispute when required to do so by this section; THEN: That party will not be entitled to recover attorney fees or expenses in respect of the dispute, even if that party would otherwise have been entitled to them. 
The Agreement sets forth the parties’ final, complete, exclusive, and binding statement of their agreement concerning its subject matter.  For the avoidance of doubt, unless expressly stated otherwise in the Agreement:
(a) Neither party is obligated to give effect to additional or different terms (collectively, Additional Terms) in any purchase order, confirmation, invoice, or similar document that may be provided by the other party in connection with a transaction pursuant to the Agreement (Additional-Terms Document) unless the Additional-Terms Document satisfies the requirements of the Agreement to amend it.
(b) A party’s performance of actions called for by proposed Additional Terms (for example, shipping an orally-agreed order after receiving a written purchase order containing proposed new terms, or paying an invoice containing proposed new terms), without more, is not to be deemed that party’s assent to the proposed Additional Terms.
(c) The Agreement supersedes all prior agreements and undertakings, both written and oral, between or on behalf of its signatory parties with respect to that subject matter. Except as stated in the Agreement, there are no promises, understandings, representations, or warranties of any kind between the parties concerning that subject matter.
(b) OPTION: The term Exclusive, if used in the heading of this section in the Agreement, means that the jurisdiction of the specified court or courts is exclusive — that is, such an action may be commenced only in the specified court or courts.  (For the avoidance of doubt, if the heading of this section in the Agreement is silent as to exclusivity, then the jurisdiction of the specified court or courts is non-exclusive.)
(c) Each party agrees to submit to the specific jurisdiction of the stated court or courts, solely for actions as specified in this section. For the avoidance of doubt, nothing in this section is intended as a submission by a party to the general jurisdiction of any court or other tribunal, nor as such a submission for any purpose except as specified in this section. 
(d) For the avoidance of doubt, unless the jurisdiction of the specified court or courts is exclusive, nothing in this section is intended to negate or waive any right a party may have to seek to transfer the action to another venue, for example on grounds of greater convenience to the parties and witnesses. 
(e) IF: The Agreement contains provisions for the arbitration of disputes; THEN: This section applies only to actions not required to be resolved by such arbitration.
(f) OPTION: The term Forum Selection Benefits [Party Name] Only, if used in the heading of this section in the Agreement, means that the Agreement’s choice of forum is intended for the benefit of the specified party, and only that party may invoke it.  (For the avoidance of doubt, to the extent allowed by law, the specified benefiting party may bring an action or actions in any court or courts having jurisdiction.)
(g) OPTION: The term Forum Selection [Applies / Does Not Apply] to Actions by Non-Parties, if used in the heading of this section in the Agreement, means that the forum-selection provisions of the Agreement will apply to actions or proceedings initiated by non-parties to the Agreement only if so specified in that heading. 
(a) The laws that apply in the specified location will govern  any claim, controversy, or other dispute arising out of or relating to(i) the Agreement,  or (ii) the interpretation or enforcement of the Agreement, without regard to conflicts-of-law or choice-of-law rules. 
(b) The term “The following is/are excluded,” followed by one or more of the abbreviations below, means that, by express agreement of the parties, the stated body or bodies of law or principles will not govern the Agreement nor any transaction or relationship arising out of it. UN CISG: United Nations Convention on Contracts for the International Sale of Goods.  UCITA: Uniform Computer Information Transactions Act.  ALI Software Contract Principles: American Law Institute Principles of Law of Software Contracts. 
GEN-22 Headings for reference only.
Headings and subheadings in the Agreement are included for convenient reference only and are not to be considered in construing the corresponding text of the Agreement. 
GEN-23 Independent contractors.
(a) Independent contractor relationship: The parties intend for their relationship to be that of independent contractors; except to the extent (if any) expressly stated otherwise in the Agreement, no specified party will hold itself out: 
(1) as an employee, agent, partner, joint venturer, division, subsidiary, or branch of the other party; or
(2) as having authority to make any promise or other commitment; representation; warranty; or modification of a warranty, on behalf of the other party.
Nothing in the Agreement is to be interpreted as creating any such relationship or authority between the parties.
(b) Examples of unauthorized actions: For the avoidance of doubt, and by way of example and not of limitation, except to the minimum extent (if any) expressly agreed in writing by the parties, no specified party has or will have any authority, on behalf of the other party, and neither party will purport, to do any of the following: 
(1) hire any individual as an employee of the other party;
(2) determine the working hours or working conditions of the other party’s employees;
(3) select or assign any employee of the other party to perform a task;
(4) direct or control the manner in which any employee of the other party performs his or her work, as distinct from the result to be accomplished;
(5) remove any employee of the other party from a work assignment;
(6) discharge or otherwise discipline any employee of the other party;
(7) incur any debt or liability; nor
(8) undertake any other obligation.
(c) No fiduciary- or agency relationship: For the avoidance of doubt, no signatory party, in entering into the Agreement, intends to enter into a fiduciary- or agency relationship except to the extent, if any, expressly so stated in the Agreement. 
(b) Each party certifies that no representative, agent or attorney of any other party has represented, expressly or otherwise, that such other party would not seek to enforce the Agreement’s waiver of jury trial.
(c) Each party acknowledges that it and the other party to this agreement have been induced to enter into the Agreement by, among other things, the mutual waivers and certifications in this “Jury trial waiver” section.
(a) Any action or proceeding for breach of the Agreement (including for this purpose any action or proceeding for fraud or negligent misrepresentation in connection with the parties’ entry into the Agreement) must be commenced within the specified time after the cause of action accrues. 
(b) IF: A limitation period specified in the Agreement would be unenforceable under applicable law; THEN: The action or proceeding in question must be commenced instead within the minimum limitation period that would be enforceable under that law. 
GEN-26 Mediation of disputes (non-binding). *
(a) Any party desiring to bring an action, before any tribunal, against another party in respect of any dispute or claim arising out of or relating to (i) the Agreement, or (ii) any transaction or relationship resulting from the Agreement, must first attempt to resolve the matter through non-binding mediation.  (NOTE: Preliminary Injunctive Relief Not Precluded.)
(b) If not otherwise agreed, any mediation will be administered by the American Arbitration Association under its Commercial Mediation Rules.
(c) OPTION: The term Failure to Mediate Forfeits Attorneys’ Fees, if used in the heading of this section in the Agreement, means that IF: A party fails to request mediation, or refuses to participate in mediation, when required to do so by the Agreement; THEN: That party will not be entitled to recover attorney fees or expenses in respect of the dispute, even if that party would otherwise have been entitled to them. 
IF: A dispute arises out of or relates to the Agreement or its interpretation or enforcement that the parties are unable to resolve themselves; THEN: At the written request of either party, the parties will submit their dispute to a neutral advisor and a representative of each party’s senior management, in accordance with the American Arbitration Association’s then-current mini-trial procedures. 
GEN-28 No other commitment
For the avoidance of doubt, each party acknowledges that nothing in the Agreement requires the other party to enter into any other agreement, nor to provide any goods, services, or information, except to the limited extent expressly stated in the Agreement. 
GEN-29 Non-recourse against other persons.
(a) Each party agrees not to assert any Contract Claim (defined below) against any individual or organization other than an individual or organization expressly identified in the preamble of the Agreement as entering into the Agreement (Contracting Party). 
(b) As used in this section, Contract Claim refers to any claim, obligation, liability, or cause of action (each, a Claim) that may (1) be based upon; (2) be in respect of; (3) arise under, out or by reason of; (4) be connected with; or (5) relate in any manner to:, any of the following (A) the Agreement; or (B) the negotiation, execution, performance, or breach of the Agreement; or (C) any representation or warranty made in, in connection with, or as an inducement to, the Agreement.
(c) For the avoidance of doubt, the term Contract Claim encompasses all Claims whether, for example, (1) in contract or in tort, (2) in law or in equity, or (3) granted by a constitution, statute, regulation, order precedent, or other governmentally-enforceable policy.
(d) For the avoidance of doubt, the parties intend for the covenant in subdivision (a) to benefit, for example, the following NonParty Affiliates: (1) each affiliate of each Contracting Party; and (2) each director; officer; employee, incorporator; member; partner; manager; stockholder; agent; attorney; or representative of; and any financial advisor or lender to; (A) each Contracting Party, and (B) each such affiliate.
(e) To the maximum extent not prohibited by law, each Contracting Party, for itself and any individual organization claiming through or under that Contracting Party, WAIVES AND RELEASES all such Contract Claims against each NonParty Affiliate.
(f) For the avoidance of doubt, the waiver and release of subdivision (e) applies, for example, to all Claims of entitlement to avoid or disregard the entity form of a Contracting Party or otherwise impose liability of a Contracting Party on a Nonparty Affiliate. Such Claims of entitlement include, for example, those based on theories of equity; agency; control; instrumentality; alter ego; domination; sham; single business enterprise; piercing the veil; unfairness; undercapitalization; or otherwise.
(g) Each Contracting Party DISCLAIMS, AND AGREES NOT TO ASSERT, ANY RELIANCE UPON any Nonparty Affiliate with respect to the performance of the Agreement or any representation or warranty made in, in connection with, or as an inducement to the Agreement.
GEN-30 Notices in writing, effective upon receipt or refusal. *
(a) Writing requirement: All notices under the Agreement must be in writing. 
(b) Effectiveness: Notices are effective upon receipt or refusal,  subject to the following:
(1) Notice to organization: A notice to an organization is effective only upon receipt or refusal by an individual who is the organization’s agent for purposes of receiving communications of the general type sent (for example, a mailroom clerk). 
(2) Notice by email: A notice delivered by email to a specific email address, but not read, is effective as to that email address if — but only if — the party being notifed has expressly designated the specific email address, in writing, as one to which notices under the Agreement may be sent. (For the avoidance of doubt, (i) the inclusion of an individual’s email address in contact information for that individual or for a party does not in itself satisfy the express-designation requirement of the previous sentence, and (ii) the “Not by email” option of this section will take precedence over this subdivision.)
(3) OPTION: The term Notices by Mail Effective [X] Business Days After Mailing, if used in the heading of this section in the Agreement, means that notices given by mail are deemed effective the specified number of days after being deposited with the official government postal service of the jurisdiction in which the sender is located, in a properly-addressed and postage-prepaid envelope. The notice must be sent either (i) as first class mail or its equivalent in the country in question, or (ii) as “automation-compatible” mail, that is, mail prepared according to postal-service standards so it can be scanned and processed by automated mail processing equipment such as a barcode sorter. 
(c) Addresses for notice: Except to the extent otherwise stated in the Agreement, if any:
(1) Permissible addresses for notice include those stated in the Agreement and any other address reasonably communicated.
(2) A notice to an organization must be marked for the attention of a specific individual, office, or position in the organization. 
(3) OPTION: The term Notice of change of address required, if used in the heading of this section in the Agreement, means that a party desiring to change its address for notice must give the other party notice of the change in accordance with this section. 
(d) OPTION: The term Not by email, if used in the heading of this section in the Agreement, means that means that delivery of notice by email will not be deemed effective even if actually received. 
(e) Copies to counsel: In the interest of expediting discussion, each party giving notice under the Agreement is encouraged, but not required, to send a copy of significant notices to the notified party’s counsel by any reasonable means. A significant notice might be, for example, a notice of breach or of termination.
GEN-31 Party representative: [Each party] to appoint
(a) The specified party, upon request by the other party from time to time, designate to the requesting party, in writing (including for example by email), a senior-level individual who is authorized by the designating party to act as that party’s primary contact point for the requesting party under this Agreement.
(b) OPTION: The term Decision-Making Authority, if used in the heading of this section in the Agreement, means that the requesting party may treat the designated individual as having authority to make binding decisions on behalf of the designating party.
GEN-32 Policy statements not to be disputed.
Neither party will: (i) dispute the effectiveness of any statement in the Agreement of fact; of policy; or of legal conclusion, such as (for example) • a statement that a particular party will own any intellectual property created; • a disclaimer of warranties; • a limitation of liability; • an entire-agreement provision; • a requirement that amendments or waivers be in writing; • and the like; nor (ii) assert that any such statement in the Agreement was orally amended or waived. 
GEN-33 Prohibitions apply to attempts, etc.
The prohibitions and restrictions of the Agreement extend to (i) attempts to do, and (ii) inducing, soliciting, permitting, or knowingly assisting anyone else to do, the prohibited or restricted thing. 
GEN-34 Publicity only when agreed
Neither party will issue any press release about, or otherwise publicly disclose the existence or terms of, (i) the Agreement, or (ii) the parties’ business relationship contemplated by the Agreement, EXCEPT with the prior written consent of the other party. 
GEN-35 Redlining representation.
Each party represents that it or its counsel has ‘redlined’ or otherwise called attention to all changes that it made and sent to the other party in previously-sent drafts of the Agreement, including but not limited to drafts of any attachments, schedules, exhibits, addenda, etc. 
GEN-36 Reliance on entire-agreement, amendment, and waiver provisions.
(a) Each party acknowledges  that the provisions of the Agreement are intended to provide the parties’ respective personnel with guidance, on which they can rely in their day-to-day business, about the parties’ rights and obligations under the Agreement. Toward that end, the parties have agreed to the entire-agreement, written-amendment, and written-waiver provisions of the Agreement in the expectation of reducing their cost of doing business, along with the expense and uncertainty of any future litigation that might occur in respect of the Agreement.
(b) Accordingly, each party expressly, knowingly, and voluntarily agrees: 
(1) never to assert, in any forum, that the provisions of the Agreement were amended, varied, modified, waived, annulled, or set aside, in whole or in part, unless the amendment, variation, etc., meets the requirements of the written-amendment or written-waiver provisions of the Agreement, as applicable; and
(2) never to rely on any purported amendment or waiver of the Agreement that does not satisfy those requirements.
(c) Each party stipulates that in entering into the Agreement, the other party is reasonably relying on — and it would not have entered into the Agreement without — the other party’s agreement in subdivision (b), as a fundamental premises of, and material consideration for, the first party’s willingness to enter into the Agreement.
GEN-37 Reliance on external representations disclaimed.
Each party, by entering into the Contract, is deemed to represent and warrants that, in doing so, it is not relying on any representation by the other specified party, other than those set forth in, or incorporated by reference into, the Contract; the parties have specifically agreed to this provision as part of their overall allocation of the risks and benefits of the Contract. 
GEN-38 Savings clause.
IF: A provision of the Agreement is held invalid, void, unenforceable, or otherwise defective by a tribunal of competent jurisdiction; THEN:
(a) All other provisions of the Agreement will remain enforceable in accordance with their terms;  AND
(b) the provision in question will be deemed modified, but only:
(1) as between the parties; 
(2) in the jurisdiction in question;
(3) to the minimum extent necessary to cure the defect; and
(4) until such time, if any, as the tribunal’s holding, in relevant respects, is vacated, reversed on appeal, legislatively overruled, or otherwise set aside.
GEN-39 Signers’ authorization to sign.
Each individual signing the Agreement on behalf of an organization personally represents that, to the best of his (or her) knowledge, his signature has been authorized by that organization. 
GEN-40 Signature mechanics.
(a) The Agreement may be signed and delivered in separate counterpart originals;  all such counterparts will be deemed to constitute one and the same instrument.
(b) Any counterpart may comprise one or more duplicates, any of which may be signed by less than all of the parties provided that each party whose execution is required signs at least one of the same. 
(c) Delivery of a counterpart may be effected (for example) by transmitting a signed signature page by FAX, by emailed PDF, or by other electronic transmission means. 
GEN-41 Signers’ availability in future proceedings.
(a) Each individual signing the Agreement agrees to make him- or herself available to testify, and/or to produce documents and things, in any action that (i) is duly commenced before a court or other tribunal of competent jurisdiction, and (ii) arises out of or relates to the Agreement.
(b) Each such individual waives any immunity or privilege from service of process or compulsory appearance to which he or she might otherwise be entitled, whether by constitution, statute, regulation, or common law. 
(a) Conferences by agreement: The parties will participate in status-review conferences whenever they so agree. If a party requests such a conference, the other party will not unreasonably withhold its agreement to participate. 
(b) Conference arrangements: Each status-review conference will be conducted by telephone conference call  unless the parties agree to another method (for example, an in-person meeting or a video conference call). Conference details will be arranged by the requesting party unless otherwise agreed. Each party will bear its own expenses of participating in the conference.
(c) Agenda template: The parties anticipate that the agenda for a status-review conference will include discussion of some or all of the following ”G-PP-AA factors”: (i) Goals; (ii) Progress to date; (iii) Problems encountered or anticipated; (iv) Action plans for the future; and (v) Assumptions being made. 
(c) Meeting minutes: At the request of any participating party, the requesting party will seasonably circulate a draft of written minutes of the status-review conference. Any participating party may object to the contents of the draft by seasonably advising all other parties in writing of the corrections and/or additions that the objecting party believes are needed. 
GEN-43 Surviving provisions as enumerated.
(a) For the avoidance of doubt, the rights and obligations set forth in the Agreement (if any) concerning the following subjects will survive any termination of the Agreement  (including for this purpose any expiration of the Agreement): Confidentiality. Indemnification. Insurance requirements. Intellectual-property ownership. Limitations of liability. Remedy limitations. Warranty rights. Warranty disclaimers. Governing law (or choice of law). Forum selection (or choice of forum). Arbitration. Early neutral evaluation. Attorneys’ fees. Expense-shifting after settlement-offer rejection.
(b) OPTION: The term Surviving provisions by nature, if used in the heading of this section in the Agreement, means that any right or obligation which by its nature extends beyond termination of the Agreement will survive such termination. 
GEN-44 Third-party beneficiaries disclaimed except as stated.
Except to the extent (if any) clearly stated otherwise in the Agreement, the parties do not intend for the Agreement to create any right or benefit for any party except themselves. 
(a) For a waiver of any right, obligation, or condition (collectively, “term”) stated in the Agreement, or any breach of the Agreement, to be effective, the alleged waiver must: (i) be in writing ; and (ii) be signed by the waiving party or by an individual authorized to make binding commitments on behalf of that party.
(b) For the avoidance of doubt, a party’s waiver of a term or breach of the Agreement will affect only that term or breach and is not to be deemed a waiver of any other term or breach. Likewise, the fact that a party, at a given moment in time, does not enforce one or more terms is not be deemed a waiver by that party of its right to enforce all terms at any other time.
 Written amendment requirements: Courts do not always give effect to written-amendment provisions; in a given case, a court might conclude that the parties to a contract subsequently made a valid, enforceable, oral agreement to waive or modify the amendments-in-writing requirement itself. Show more
In contracts for the sales of goods, UCC § 2-202(2) provides that “A signed agreement which [sic] excludes modification or rescission except by a signed writing cannot be otherwise modified or rescinded, but except as between merchants such a requirement on a form supplied by the merchant must be separately signed by the other party.” (Emphasis added.)
 State or clearly indicate that Agreement is being amended: The goal of this language is to make it difficult to claim that “stray” language constitutes an amendment. For an example of why such language might be needed, see Stevens v. Publicis, S.A., 2008 NY Slip Op 02880 [50 AD3d 253]: A New York appellate court held that an exchange of emails, each of which included the typed name of the sender at the bottom of the message, was sufficient to modify an employment agreement.Show more
See also Alix R. Rubin, Counsel Beware: A Few Keystrokes May Modify An Agreement, at http://goo.gl/5lFdj (July 1, 2008) (accessed July 18, 2008); Stephanie Holmes, Stevens v. Publicis: The Rise of “No E-mail Modification” Clauses?, 6 Wash. J. L., Tech., & Arts 67 (2010), at http://goo.gl/Y6cH8.
 Amendments, unilateral: Provisions like this are often seen in “mass” contracts that govern on-going relationships, such as consumer-services agreements, reseller agreements, Web site terms of service, and the like. See, e.g., the Facebook Statement of Rights and Responsibilities § 13 (accessed Jan. 23, 2012).
See also the contract provisions discussed in the Harris v. Blockbuster, Inc. and Carey v. 24 Hour Fitness cases summarized below. See generally David Horton, The Shadow Terms: Contract Procedure and Unilateral Amendments, 57 UCLA L. Rev. 605 (2010).
 Amendments, unilateral – no retroactive modification of dispute-resolution provisions: This language is a so-called “Halliburton exception,” intended to prevent a unilateral-amendment right from nullifying an arbitration provision on grounds that the parties’ agreement to the arbitration provision is illusory. Show more
The same result occurred in connection with the arbitration provision in an employment agreement; see Carey v. 24 Hour Fitness USA, Inc., No. 10-20845 (5th Cir. Jan. 24, 2012) (affirming denial of motion to compel arbitration because company had the right to amend unilaterally, without a Halliburton-type savings clause).
 Assignment consent requirement: Under U.S. law, most contract rights — but not all — are freely assignable, and most contract duties are freely delegable, absent some special character of the duty, or unless the contract says otherwise. A contractual retriction on assignment could give the non-assigning party a de facto veto over the assigning party’s future strategic decisions; the non-assigning party might extract a high price for its consent to assignment. Show more
Consent to assignment could be expensive: In one high-profile case involving a Dubai company, the Port of New York and New Jersey was able to extract a $10 million consent fee, plus a commitment to invest an additional $40 million in improvements to terminal operations, in return for its consent to an assignment of a lease agreement, as reported in the New York Times. A party being asked to agree to an assignment-consent requirement therefore should consider trying to negotiate one or more carve-outs of the kind discussed below.
Examples and variations:
- Boeing-Alaska Airlines aircraft purchase agreement § 9.1: exception for certain asset dispositions, and for assignment of rights only
- Disney-Pixar Coproduction Agreement §§ 21, 22, 23: exception for certain asset dispositions and for assignment of rights only; Disney can terminate after a change of control of Pixar.
- Ford Motor Co. Services Agreement § 20.4: exception for certain asset dispositions.
- IBM NDA § 8(b).
- Johns Hopkins University Affiliation Agreement § 5.2, 7.1: assignment without consent is a material breach and is voidable. Nonconsenting party may terminate agreement. A merger, etc., is considered an assignment.
- SmithKline Trademark License Agreement § 16: consent not to be unreasonably withheld.
- UT Austin NDA § 12.
- Verizon NDA § 5: Consent not to be unreasonably withheld.
- Wal-Mart Stores Money Services Agreement Part III – exception for certain affiliate transfers.
 Operation of law likewise (assignment-consent option): In some jurisdictions, when two companies merge and form a surviving company, the two original companies’ contracts are automatically transferred to the surviving company by operation of law. That can cause significant problems for the merger or other reorganization if the contract requires consent to an assignment. Show more
Adverse business consequences: A merger in breach of an assignment-consent requirement could have serious business ramifications. For example:
- Loss of a valuable lease: The Oregon supreme court ruled, in effect, that a bank materially breached a lease agreement’s assignment-consent requirement when it merged with its own wholly-owned subsidiary without first obtaining the landlord’s consent. See Pacific First Bank v. New Morgan Park Corp., 319 Or. 342, 876 P.2d 761 (1994) (in effect reversing trial-court declaration of no breach). That ruling presumably gave the landlord the right to demand concessions from the bank if the bank wanted to continue to occupy the leased premises.
- Hold a corporate reorganization hostage: An assignment-consent clause in a contract involving an intellectual-property license can screw up an internal corporate reorganization. In one reported case, a customer of a software vendor did such an internal reorganization. As a result, the vendor’s software ended up being used by a sister company of the original customer. The vendor demanded that the sister company buy a new license. The sister company refused. The vendor sued, successfully, for copyright infringement, and received the price of a new license, some $450,000, as its damages. See Cincom, Inc. v. Novelis Corp., No. 07-4142, 581 F.3d 431 (6th Cir. Sept. 25, 2009) (affirming summary judgment in favor of vendor). Editorial comment: That vendor’s behavior strikes me as shortsighted: I certainly wouldn’t want to be one of the vendor’s sales representatives trying to sell anything else at all to that customer.
- Disappearance of indemnity rights: A party that is entitled to indemnification under a contract, and that might someday want to merge with another company, should be sure its indemnity rights won’t disappear if a merger occurs without the consent of the indemnifying party. This was the issue in a 2011 Delaware case, ClubCorp, Inc. v. Pinehurst, LLC, C.A. No. 5120-VCP, slip op. at 6 (Del. Ch. Nov. 15, 2011) (Parsons, V.C.) (denying motion for summary judgment). The parties’ indemnification agreement prohibited assignment, but also stated that the rights of the indemnified party extended to its successors and assigns. The court held that the contract language was ambiguous about whether the indemnity right survived the unauthorized merger, and consequently denied a motion for summary judgment brought by the indemnified party’s successor in interest. \par NOTE: This provision’s language does NOT say that any merger, etc., entered into without the other party’s consent will be void; the legal effect of such a statement is unclear. Instead, consummating such a transaction is a breach of the Agreement, and it’s a material breach if the materiality option is specified. \par Heads-up about employees’ non-competition covenants: While this doesn’t have to do with assignment consent, it bears noting that in a 2012 opinion, the Supreme Court of Ohio held that when a company merged with another one, that served to start the clock running on the employees’ post-term non-competition covenants. Acordia of Ohio, L.L.C. v. Fishel, No. 2012-Ohio-2297 (Ohio May 24, 2012) (affirming judgment that surviving entity could not enforce non-competition covenants).
 Void without consent, or just a breach (assignment-consent option)? What is the legal effect if a company purports to assign its contract in violation of an assignment-consent requirement – is the assignment a nullity? Or is the assignment valid, but a breach of the agreement? Show more
On the other hand, a court applying the so-called “modern approach” (or one of its variations) might hold that an unconsented assignment was a breach of the contract, but the assignment was not void unless the contract said so, perhaps with requisite “magic words” — see id., slip op. at 10 & n.4, 19 25 (citing cases).
In another case, the Connecticut Supreme Court explained the modern approach in a case in which a limited liability company (LLC) was a tenant of a real-property lease. The tenant did not obtain the landlord’s consent before a majority interest in the tenant was transferred to a third-party investor. The district court and intermediate appellate court had each held, in effect, that the lease agreement had been voided as a result. The supreme court reversed, explaining:
[U]nless an antiassignment clause expressly limits the power, as opposed to the right, to assign the contract or invalidates the assignment, the assignment remains valid and enforceable; but the assignor will be liable for any damages that result from such assignment. In other words, without express contractual language providing otherwise, a provision restricting the assignment of a contract will be construed to be a covenant like any other contractual covenant-a breach thereof will render the breaching partyliable in damages but will not make the contract a nullity. We concluded that this approach advanced our policy disfavoring restraints on alienation and provided full compensation when actual damages resulted from the breach.
David Caron Chrysler Motors, LLC v. Goodhall’s, Inc., No. 18694 (Conn. May 15, 2012).
 Material breach (assignment-consent option): A non-assigning party asking for this provision probably wants the right to terminate (or perhaps even to rescind) the agreement if the other party were ever to assign the agreement without consent. That would give the non-assigning party leverage to demand money or other concessions as the price of not exercising its termination right — or it would give the non-assigning party an excuse to disavow the contract and take up with someone else. Show more
On the other hand, in a 2002 case, a failure to obtain consent to an alleged assignment was held not to be a material breach. See Hess Energy Inc. v. Lightning Oil Co., No. 01-1582 (4th Cir. Jan. 18, 2002) (reversing summary judgment). The case involved a natural-gas supply contract. The customer was acquired by a larger company, after which the larger company took over some of the contract administration responsibilities such as payment of the vendor’s invoices. The vendor wanted to sell its gas to someone else at a higher price, so it sent a notice of termination, on grounds that the customer had supposedly assigned the agreement to its new parent company, in violation of the contract’s assignment-consent provision. The appeals court expressed considerable doubt that the customer had indeed assigned the contract; it went on to say that, even if the customer had in fact assigned the contract, the resulting breach of the agreement would not have been a material breach, and therefore the vendor did not have the right to terminate the contract.
 Consent not to be unreasonably withheld (assignment-consent option): A party wanting to maintain its freedom to assign a contract should consider asking for a provision like this. As noted in the “Show more” discussion below, the law may imply a commercial-reasonableness requirement for assignment consents. But that can’t guarantee that the non-assigning party will give consent when the assigning party needs it. By the time a court could resolve the matter, the assigning party’s corporate transaction could have been blown. Show more
A non-assigning party that wanted the unfettered right to withhold consent to assignment could try to negotiate an alternative provision such as the “Consent at discretion” option of this section, allowing the non-assigning party to withhold its consent in its discretion. Otherwise, a court might hold that any withholding of consent must meet a reasonableness test. See, e.g., Shoney’s LLC v. MAC East, LLC, No. 1071465 (Ala. Jul. 31, 2009) (on certification by Eleventh Circuit), cited in MAC East, LLC v. Shoney’s, No. 07-11534 (11th Cir. Aug. 11, 2009), reversing No. 2:05-cv-1038-MEF (WO) (M.D. Ala. Jan. 8, 2007) (granting partial summary judgment that Shoney’s had breached the contract). In the Shoney’s case, the contract in suit specifically gave Shoney’s the right, in its sole discretion, to consent to any proposed assignment or sublease. The Alabama Supreme Court held that this express language trumped the rule, laid down in prior case law, to the effect that a refusal to consent is to be judged by a reasonableness standard under an implied covenant of good faith.
If a commercial- or residential lease agreement requires the landlord’s consent before the tenant can assign the lease, state law might impose a reasonableness requirement. I haven’t researched this in any depth, but I did run across an unpublished California opinion and an old law review article, each collecting cases. See Nevada Atlantic Corp. v. Wrec Lido Venture, LLC, No. G039825 (Cal. App. Dec. 8, 2008) (unpublished; reversing judgment that sole-discretion withholding of consent was unreasonable); Paul J. Weddle, Pacific First Bank v. New Morgan Park Corporation: Reasonable Withholding of Consent to Commercial Lease Assignments, 31 Willamette L. Rev. 713 (1995) (first page available for free at Hein Online, http://goo.gl/JKw6B; also available for a fee at the LexisNexis Web site at http://goo.gl/gNeQa).
 Consent at discretion (assignment-consent option): This is an alternative to the “not to be unreasonably withheld” section above. If a party might want the absolute right to withhold consent to an assignment in its sole discretion, it would be a good idea to try to include this option in the contract language; otherwise, there’s a risk that court might impose a commercial-reasonableness test under applicable law. Show more
Heads-up: Suppose one side asks for at-discretion language like this — but then the other side rejects it. A court could well take this as a signal that the parties intended the opposite of the at-discretion language, for example that consent would not be unreasonably withheld. Something like this happened in the Pacific First Bank case: A lease agreement prohibited assignment, including by operation of law, without the landlord’s consent, and also stated that the landlord would not unreasonably withhold its consent to an assignment of the lease to a subtenant that met certain qualifications. The lease agreement, however, did not include such a “not to be unreasonably withheld” provision for other assignments. The Oregon supreme court held that the state’s law did impose a duty of good faith on the landlord, absent an agreement otherwise — but the court also concluded that the parties had indeed agreed otherwise, therefore the landlord did not have such a duty of good faith. See Pacific First Bank v. New Morgan Park Corp., 876 P.2d 761 (Or. 1994) (affirming court of appeals decision on different grounds, and reversing trial-court declaration that bank-tenant had not materially breached lease agreement).
 Exception for certain asset dispositions (assignment-consent option): This exception is a fairly-common one, and can be crucial to a company that wants to retain control over its own strategic destiny. It also can keep the assignee from having to re-buy and pay again for an IP license that the assigning party already paid for once, as happened in the Cincom case discussed in the “Operation of law” footnote above. Show more
The other side might respond with something like this: What if you decided to sell a product line or a division to one of our competitors? We need to retain control over that possibility, and the only way to do that is for us to retain the absolute right to consent to any assignment you might make.
Another approach might be to give the non-assigning party, instead of a veto over asset-disposition assignments, the right to terminate the contract for convenience. Of course, the implications of termination would have to be carefully thought through.
 Exception for certain Affiliate transfers (assignment-consent option): This exception to the assignment-consent requirement is not so common, because it might result in bad business consequences for the non-assigning party. Show more
The other party, though, might reasonably object to the prospective assigning party: We have no idea whether your affiliate would be in a position to fulfill your obligations under the contract, nor whether we’d be able to recover from you if there were a breach. Perhaps if you were willing to unconditionally guarantee your affiliate’s performance, we might be able to go along with this. Otherwise, though, we have a problem with this carve-out.
 Exception for assignment of rights only (assignment-consent option: Some parties want to be able to assign their rights to payment as a way of financing their operations. This exception allows them to do so.
 Termination option after undesired assignment: This provision can sometimes help break a negotiation impasse. A customer negotiating a purchase agreement might want the right to consent to any assignment of the agreement by the vendor. The vendor, on the other hand, likely will want to maintain control over its strategic destiny, for reasons discussed in the footnotes above. A termination right can let both parties have at least half a loaf.
 Assignment as delegation: This section is adapted from UCC § 2-210(4). Of course, UCC article 2 applies only to the sale of goods, but drafters often assume the effect of an assignment to be the same for non-sale contracts, so it might not hurt to spell it out.
 Assignment – effect of acceptance: This section is adapted from UCC § 2-210(4). Of course, UCC article 2 applies only to the sale of goods, but drafters often assume the effect of an assignment to be the same for non-sale contracts, so it might not hurt to spell it out.
 Written assumption by assignee upon request: A non-assigning party might want to get a signed document “proving up” the assignee’s express assumption of the assignor’s contract obligations. That could make life a bit easier down the road for the non-assigning party’s trial counsel if contract trouble with the assignee were to ensue.
 Assignment confidentiality: This section would discourage leaks (intentional or otherwise), for example of M&A-related information, and the “complications” that can arise from insider trading.
 Attorneys’ fees to prevailing party: This provision overrides the general rule in the U.S. is that each party in a lawsuit must pay its own attorneys’ fees (unless a statute provides otherwise). Show more
Texas’s special rule: In Texas, absent an agreement otherwise, a party that successfully enforces a claim on an oral or written contract — but not a party that successfully defends against an enforcement action — is entitled to recover attorneys’ fees. See Tex. Civ. Prac. & Rem. Code § 38.001. Consequently, if a party negotiating a contract thinks it might be more likely to be the defendant in a dispute than the plaintiff, it might want to affirmatively include a “pay your own lawyer” provision in the contract, in the hope of cutting off the plaintiff’s statutory right of recovery in such a jurisdiction.
California’s Venus fly trap rule: California Civil Code § 1717 provides, in essence, that any attorneys’ fees provision is to be treated as a prevailing-party provision, and states that attorneys’ fees under the section cannot be waived. So for a contract under California law, be careful what you ask for by way of attorneys’ fees ….
Attorneys’ fees awards in arbitration awards: In an arbitration proceeding, applicable law might override the parties’ agreement that attorneys’ fees can, or cannot, be awarded. See Recovery of Attorneys’ Fees in International Arbitration: the Dueling ‘English’ and ‘American’ Rules, by John L Gardiner & Timothy G. Nelson of Skadden Arps (accessed Jan. 30, 2010).
 Attorneys’ fees – expansive-application option: This option is adapted from an arbitration provision upheld by the Fifth and Eleventh Circuits in two cases involving a mortgage-loan servicing company that was sued by a homeowner. Show more
 Attorneys’ fees if settlement offer rejected but then not exceeded: This section is modeled on the offer-of-judgment provisions in Rule 68 of the Federal Rules of Civil Procedure. Its purpose is to create meaningful incentives for parties to accept reasonable settlement offers. Unfortunately, Federal Rule 68 is pretty much toothless: It shifts only subsequently-incurred court costs, which usually don’t amount to a lot of money in the scheme of things, and it doesn’t shift the burden of attorneys’ fees, which can be huge. As a result, many litigators don’t regard Rule 68 as providing much incentive to settle. Show more
 Covered dispute (attorneys-fees shifting): The class of disputes covered by this section is intentionally broad, encompassing what could be a wide variety of disputes even between non-parties.
 Covered settlement offer (attorneys-fees shifting): The requirement that a settlement offer be expressly identified as covered by this provision is intended to prevent a winning party from ambushing the loser by claiming that one of its earlier communications was an unaccepted “settlement offer.”
 Confidentiality of settlement discussions (attorneys-fees shifting): Note that a party making an offer is not required to keep its own offer confidential, but it is required keep confidential any subsequent communications, including its own, about the offer. Cf. Fed. R. Evid. 408 (settlement discussions not admissible into evidence except in limited circumstances).
 Contra proferentem principle disclaimed: The contra proferentem rule says that — other things being equal — ambiguities in the language of a contract should be resolved against the party that proffered the language, that is, against the drafter. The basic rationale is that the proffering party had the opportunity to make the language clear, one way or another, and so ambiguities should be resolved in favor of the other side. See generally the Wikipedia article on that subject; see also, e.g., Howard Hughes Corp. Transition Services Agreement § 10.11.
 Copies of Agreement deemed originals: This is akin to Fed. R. Evid. 1003, which provides that “A duplicate is admissible to the same extent as the original unless a genuine question is raised about the original’s authenticity or the circumstances make it unfair to admit the duplicate.” See also, e.g., the last paragraph of the IBM NDA.
 Representation by counsel: A drafter might want to ask for this provision if the drafter’s client might later be perceived as having enjoyed an imbalance of bargaining power over the other side. If a judge is asked to invalidate an allegedly-onerous contract clause, the judge might well be influenced by whether the parties were represented by counsel when they negotiated the contract. Show more
 Disparagement prohibited: This kind of provision is sometimes seen in distribution- or reseller agreements; typically, the manufacturer wants to prohibit the distributor or reseller from making negative comments to end-customers. A distributor or reseller might object to this statement, wanting to preserve its freedom to say whatever it pleases to its own customers.
 Early neutral evaluation: When a legal dispute ariese, the parties’ lawyers can sometimes tell their clients what they think the clients want to hear. (In part this may be because lawyers — especially male lawyers — tend to be overly optimistic about whether they’re going to win their cases; see this summary in the ABA Journal of the published research findings.) That can hamper getting disputes settled. Consequently, if a contract dispute starts to get serious, an early, non-binding “sanity check” from a knowledgeable neutral can help the parties and lawyers get back onto a more-productive track before positions harden and business relationships suffer — not to mention before the legal bills start to mount up. That’s a main reason why some courts refer selected cases to mandatory early neutral evaluation (“ENE”), as explained at the Web site of the federal court whose district includes Silicon Valley. (For a longer discussion of ENE, please see this posting of mine.) The early neutral evaluation procedures of the American Arbitration Association are available at the AAA Web site.
 Economical Litigation Agreement: The CPR Economical Litigation Agreement (a.k.a. a “litigation pre-nup”) is a relatively new document. Its provisions make a good deal of sense, but they might not make sense for your particular circumstances. Think carefully, therefore, before including this provision in your contract.
 Trial to a judge without a jury (Economical Litigation Agreement): This language is in bold to make it conspicuous, which may be appropriate or even necessary for jury-trial waivers in some jurisdictions. (This assumes the relevant jurisdiction even allows pre-dispute waivers of jury trials, which three states flatly do not, as discussed in the footnotes to the “Jury trial waiver” section.)
 Dispute escalation: Some lawyers believe that a dispute-escalation requirement can increase the chance of an amicable settlement. Getting new people involved in a dispute can sometimes bypass individual animosities, hidden personal agendas, and other foibles; this can help break an impasse. See generally my post, Drafting for Disputes: Keep individuals’ personal interests in mind (2009). Show more
 Executive-level management (dispute escalation): The phrase “executive-level management” is intentionally vague; the idea is to encourage the parties to keep referring the dispute up to higher and higher levels until (1) they resolve the dispute, or (2) one party says “enough!” and declines to continue — at the risk of being branded as intentionally flouting its contractual obligation, which might make a poor impression on a judge or jury.
 Whenever requested in writing (dispute escalation): The “whenever requested” phrase should give the other side ammunition with which to respond if one party’s “guy” were to balk at escalating a disagreement up the chain of command. The requesting party can ask the balking individual, “look, are you going to get your boss involved here, like the contract says, or does our lawyer have to call your lawyer about breach of contract?”
 Failure to escalate forfeits attorneys’ fees (dispute escalation): This language is modeled on a mediation provision in a standard California residential real-estate purchase agreement, which has been enforced at least twice by courts. See Cullen v. Corwin, No. C067861 (Cal. App. June 7, 2012) (reversing award of attorneys’ fees to defendant that successfully moved for summary judgment but refused to participate in mediation as required by contract), citing Lange v. Schilling, 163 Cal. App.4th 1412 (2008) (reversing award of attorneys’ fees to successful plaintiff because plaintiff did not attempt to mediate before filing suit as required by contract).
 Entire agreement: This is what’s known as an “integration” provision; language like this is extremely common in commercial contracts. Whether a court will enforce such a provision, however, may depend on the jurisdiction and the circumstances. For example, in a 2008 case, a group of Shell gasoline dealers claimed that Shell had orally amended the franchise agreement — this, even though the agreement purported to rule out oral promises. The appeals court affirmed the judgment against Shell. Marcoux v. Shell Oil Prods. Co. LLC, 524 F.3d 33 (1st Cir. 2008). The court quoted the Restatement (Second) of Contracts § 209 cmt. b (1981): “Written contracts, signed by both parties, may include an explicit declaration that there are no other agreements between the parties, but such a declaration may not be conclusive.” (Emphasis added.) See also the discussion in the footnotes to the written-amendments section.
 Forum selection – just arising out of, or relating to, too? Some drafters like to say that the specified forum applies, not just to disputes “arising out of” the agreement, but also more broadly to disputes “relating to” the agreement. This broader language could be problematic, however, especially in an exclusive-jurisdiction clause. Show more
On the other hand, the vendor might not want to agree up front to litigate all possible related disputes in the customer’s jurisdiction. For example, suppose that the customer were to help a competitor of the vendor to steal the vendor’s trade secrets. In that situation, the vendor might want to be free to bring suit against both the competitor and the customer in the vendor’s own home jurisdiction, and not to have to fight over whether the suit was required to be brought in the customer’s home court.
 Heads-up: Courts “of” a city or state (forum selection): Think carefully before editing the provision to state that exclusive jurisdiction will be in “the courts of Virginia” or other state - doing so could constitute a waiver of the right to remove to federal court. That happened in the Doe 1 v. AOL case: A group of AOL users sued the company in California. The forum-selection clause in the user agreement required all disputes to be heard in “the courts of Virginia.” The district court granted AOL’s motion to dismiss, without prejudice to re-filing in a state or federal court in Virginia. The appeals court reversed, agreeing with other courts that the forum-selection clause required litigation exclusively in the relevant state courts, not federal courts. (The appeals court also ruled that the forum-selection clause was unenforceable as to California residents because of California’s strong public policy favoring class-action relief, which was not available in Virginia state courts.) See Doe I v. AOL, LLC, 552 F.3d 1077 (2009).
 Forum selection – compromise location? Typically, each party wants to litigate in its own “home court,” even though that might not always be the best idea, for reasons discussed in the following footnote. If at least one party is a Delaware corporation, then a possible compromise might be to litigate in Delaware — regarded as having an efficient, competent court system — perhaps specifying that the governing law will be that of the home state of one of the parties, or alternatively, New York law, which is generally well-regarded by many businesses. (This comment comes from a lunchtime discussion with my friend and Houston lawyer Gene Tyler).
 Heads-up: Exclusive or non-exclusive jurisdiction? (forum selection) Drafters should think very carefully before approving an exclusive-jurisdiction forum selection clause. For a variety of reasons, a party might not want to be forced to litigate in one particular place — not even in its own home jurisdiction. Show more
- Litigating in the other party’s home jurisdiction can significantly increase the expense of litigation for the “visiting team,” especially if the case ends up going to trial.
- Moreover, the visitors may have a legitimate concern about the other side’s home-court advantage.
- On the other hand, if a potential plaintiff expects it will want speedy relief (for example, a preliminary injunction), it might make sense to agree that it will bring suit exclusively in the defendant’s home jurisdiction.
- Moreover, several crucial litigation tasks are likely to go faster in the defendant’s home jurisdiction, such as service of process on the defendant and subpoenas for local witnesses.
- On a related note, it might also make sense to agree to a governing-law provision stating that the law of the likely defendant’s home jurisdiction will apply — because a judge in that jurisdiction will already be familiar with the local law, and proving up a ‘foreign’ law won’t be necessary.
 Right to transfer (forum selection): In a 2008 case, a New Jersey federal district court ordered a case transferred to California, in part on grounds that the exclusive forum-selection provision stated only that any action must be commenced in New Jersey. See Ellis Sports Enters. v. Lococo, 2008 U.S. Dist. LEXIS 67472 (D.N.J. Sept. 5, 2008), summarized by noted New York attorney Gregory P. Joseph in a blog posting at http://www.josephnyc.com/blog/?blogID=694.
 Benefits [Party Name] Only (forum-selection option): This provision is modeled on language relied on by a Florida appeals court in reversing dismissal of a case. The court held that an individual defendant, who allegedly controlled a corporate guarantor of a loan, was held not to be entitled to rely on a forum-selection provision in the guaranty agreement, in part because the agreement expressly stated that the provision was for the benefit of the lender only, and that the lender could sue in any court having jurisdiction. See Crastvell Trading Ltd. v. Marengère, No. 4D10-815 (Fla. App. June 20, 2012) (reversing dismissal of complaint).
 Applicability to non-parties (forum-selection option): Whether a forum-selection provision will bind, and/or benefit, a non-party seems to depend heavily on the specific circumstances. In a Florida case, an individual who allegedly controlled a corporate guarantor of a loan was held not to be entitled to rely on a forum-selection provision in the loan agreement documents. The court relied in part on the loan agreements’ disclaimer of third-party beneficiaries and the fact that the individual was not a signatory to the agreements. The court also noted that the guaranty agreement had its own forum-selection provision permitting the lender to sue in any court having jurisdiction. See Crastvell Trading Ltd. v. Marengère, No. 4D10-815 (Fla. App. June 20, 2012) (reversing dismissal of complaint). Show more
For further discussion, see generally Jeffrey Gross, When Can Non-Signatories Enforce Forum Selection Clauses in New York, March 16, 2011 (accessed July 10, 2012).
Would a California court enforce the post-term non-competition covenant? Almost certainly not, because California has a strong public policy against such covenants. The California court would likely refuse to give effect to the parties’ stated choice of Texas law to govern the contract.
Here’s a typical example: In the case of Narayan v. EGL, Inc., a group of California delivery drivers for a Texas-based shipping company had signed a contract form stating that they were independent contractors. The drivers sued the shipping company in a California federal district court for various violations of the California Labor Code that applied to employees, such as failure to pay overtime and unlawful deductions from their pay. The district court granted summary judgment in favor of the employer. The court reasoned that the Texas choice-of-law provision in the contract was controlling, and that in any case the result would be the same under California law. The appeals court reversed and remanded, holding that the Texas choice-of-law provision could not prevent the application of the California Labor Code. The court said, “As Judge Easterbrook observed in a closely analogous context, statutes enacted to confer special benefits on workers are ‘designed to defeat rather than implement contractual arrangements.’” Narayan v. EGL, Inc., 616 F.3d 895, 898 (9th Cir. 2010) (citation omitted).
In a survey of nearly 700 cases, choice-of-law provisions were found to have been enforced about 85% of the time (less so in state courts than in federal). The non-enforcement cases were concentrated in the areas of employee non-competition provisions, franchise law, and regulatory statutes. See Larry E. Ribstein, From Efficiency to Politics in Contractual Choice of Law, 37 Ga. L. Rev. 363, 374-75 (2003).
Heads-up: Will federal common law apply? If a contract specifies “the laws of the United States” as the governing law, a court might deem the parties to have agreed to the application of federal common law as well as federal statutory law. The First Circuit did this, albeit by agreement of the parties, in Powershare, Inc. v. Syntel, Inc., 597 F.3d 10 (1st Cir. 2010) (reversing denial of motion to stay litigation in favor of a pending arbitration).
Further reading: See generally the Wikipedia article “Choice of law clause” at http://bit.ly/7dPP31.
 Arising out of or relating to the Agreement (governing law): The phrase “arising out of the Agreement” is pretty standard terminology. Court generally interpret the additional phrase “or relating to [the Agreement]” as encompassing matters beyond the contract itself. Tina Stark, a contract-drafting professor (and author of a leading textbook on the subject, which I use in the course I teach), notes that sometimes the parties to a contract want the same body of law to govern all their dealings, even those that strictly speaking do not “arise out of” the contract. (Email exchange with the author, August 10, 2012.)
 Exclusion of choice-of-law rules (governing law): Suppose the parties to a contract agreed that State A’s law would govern. But suppose also that, on the facts of the case, State A’s choice-of-law rules would cause State B’s law to apply. Presumably that would not be what the parties wanted. Hence, in this governing-law provision, choice-of-law rules are expressly excluded from the governing-law selection. (See also the Wikipedia discussion of renvoi.
 Exclusion of UNCISG (governing law): The UN Convention on Contracts for the International Sale of Goods is somewhat like the (U.S.) Uniform Commercial Code, but with some significant differences, summarized in a Wikipedia article at http://goo.gl/lWsKk. Articles 6 and 12 of the CISG permit the parties to a contract to “opt out” of the Convention’s applicability. See also a UN fact sheet concerning the CISG.
 Exclusion of UCITA (governing law): The Uniform Computer Information Transactions Act (“UCITA”) is a controversial proposed uniform law concerning computer software (which at this writing had been enacted only by Maryland and Virginia). This section takes advantage of UCITA § 104, which allows parties to a contract to “opt out” of the statute’s applicability. For more information, see generally:
- the Wikipedia article at http://bit.ly/7Zln8i
- materials at http://goo.gl/ksXzg concerning “bomb-shelter” legislation enacted by Iowa, North Carolina, Vermont, and West Virginia, in essence nullifying any contract provision that adopts UCITA as a choice of law.
 Exclusion of ALI Software Contract Principles (governing law): The ALI Principles of the Law of Software Contracts, approved by the ALI in mid-2009, are disliked by many software vendors (for good reason, in my view). Show more
The actual text of the Principles — which the drafters clearly intended to be adopted by courts as law — is available only by buying it from ALI for $87, or as a $40 download of the proposed final draft.
So far as I’ve been able to tell, at this writing (September 2010) the Principles have not been adopted by any state legislature, nor has any court has followed them.
For more information, see the following:
- Mark F. Radcliffe, New and Flawed Rules: Dealing with the ALI Principles of Law of Software Contracts – contains a checklist of steps software vendors could take to conform their license agreements to the Principles (accessed June 24, 2009).
- Dean Raymond T. Nimmer, Flawed ALI Software Contract Principles.
- Sean Hogle, ALI’s Principles: My Recommendation for Software Vendors.
- Kristie Prinz, Series on ALI Software Contract Principles.
 I’ve never been entirely clear why anyone would want this provision — why not just make sure the heading text isn’t inconsistent with the parties’ intentions? — but a lot of agreements seem to include it.
 Independent contractors: This type of provision arguably is becoming more important as companies increasingly outsource their work to contractors instead of keeping it in-house. Such a provision, however (or any other like it), might not be enough to do the job if a court were to find that in fact the contractor was an employee. See generally, e.g.: • Is Your Independent Contractor Really Your Employee?, by Jeremy R. Sayre (2007; accessed Oct. 3, 2008); • the Fifth Circuit’s “economic realities” analysis in, e.g., Hopkins v. Cornerstone America, No. 07-10952, 545 F.3d 338 (5th Cir. 2008) (affirming summary judgment of employee status); • the Ninth Circuit’s refusal to apply a Texas choice-of-law clause in holding that a California truck driver was really an employee and not an independent contractor, in Narayan v. EGL Inc., No. 07-16487, 616 F.3d 895 (9th Cir. 2010) (reversing summary judgment in favor of employer). Show more
 Unauthorized actions (independent contractors): The laundry list in the text is adapted from a sample provision (with extensive case citations) in footnote 70 of Lisa Bagley Brown and Harold J. Flanagan, Onshore Drilling Contracts: Avoiding the Pitfalls of Form Drilling Contracts (undated; accessed Apr. 4, 2012).
 No fiduciary- or agency relationship (independent contractors): This language is a lawyer-repellant clause. It’s intended to deter, say, a customer’s trial counsel from trying to argue that the vendor supposedly had fiduciary obligations to the customer. For an example, see HP CDA § 10.
 Jury-trial waiver – will it be effective? Most states permit parties to agree in advance that they waive the right to trial by jury. See, e.g., In re Prudential Ins. Co. of America, 148 S.W.3d 124 at text accompanying nn. 26-33 (Tex. 2004) (citing cases in conditionally granting writ of mandamus directing trial court to enforce contractual jury-trial waiver). California, Georgia, and North Carolina, however, are notable exceptions. Show more
Georgia likewise prohibits pre-trial contractual jury waivers. See Bank South, N.A. v. Howard, 264 Ga. 339, 444 S.E.2d 799 (1994) (affirming reversal of trial court’s striking of jury demand).
North Carolina statutorily prohibits advance waiver of the right to a jury trial. See N.C. Gen. Stat. § 22B-10
Do juries add value after all? A 2006 study by two law professors concluded that most business-related contracts do not include jury-trial waivers. The authors remarked that “Our results suggest that, contrary to a widespread perception about the alleged inadequacies of juries in complex business cases, sophisticated actors may perceive that juries often add value to dispute resolution.” Theodore Eisenberg and Geoffrey P. Miller, Do Juries Add Value?: Evidence from an Empirical Study of Jury Trial Waiver Clauses in Large Corporate Contracts, Cornell Law School research paper No. 06-044, at 1, available at http://goo.gl/OqtoI.
 Arising out of or relating to (jury-trial waiver): Some drafters might prefer to change the heading of this section to specify that the jury-trial waiver applies only to disputes arising out of the Agreement, as opposed to all disputes arising out of or relating to the Agreement; the latter is a broader waiver.
 Conspicuousness of jury-trial waiver language: The jury-trial waiver language of this provision is in bold, and portions are in all-caps, to make them conspicuous. In some jurisdictions, the fact that a contractual waiver of rights was conspicuous serves as prima facie evidence that the waiver was knowing and voluntary. See, e.g., In re Bank of America, No. 07-0901 (Tex. Feb. 27, 2009) (conditionally granting writ of mandamus directing court of appeals to reinstate trial-court order enforcing contractual jury waiver). Conspicuousness can also help fend off a challenge that the jury-trial waiver was unconscionable.
 Limitation period – a real-world example: The Eighth Circuit enforced a provision in an M&A agreement that required certain indemnity claims by the buyer against the seller to be commenced within one year after closing. See Eckert v. Titan Tire Corp., 514 F.3d 801, 804 (8th Cir. 2008) (affirming bench-trial judgment), discussed in this note by Roy Harmon.
 Don’t make a limitation period too short: A court might invalidate a contract provision that sets too-short a limitation period for bringing an action. See, for example, UCC § 2-725, which requires a minimum limitation period of one year for sales of goods. Another, typical illustration comes from a holding by a California court of appeals: The court ruled that a contract clause requiring an employee to file suit against the employer within six months after termination was invalid “because plaintiffs’ claims [for overtime pay] were based on unwaivable and fundamental statutory rights, and the [contract] provision … violates section 219 and public policy, and is thus unenforceable.” Pelligrino v. Robert Half Int’l, Inc., No. G039985, slip op. at 11 (Cal. App. 4th Dist. Jan. 28, 2010) (affirming district court’s award of damages to former employees for violation of wage and hour laws).
 Mediation: The American Arbitration Association’s Commercial Mediation Rules are at http://goo.gl/Uwnp2. Personally I’m not a fan of mediation. I’ve participated as counsel in several mediations on both the plaintiffs’ and defendants’ sides. My impression from those experiences is that: (1) many mediators tend to be reluctant to do what’s known as “evaluative mediation“ — which I think of as metaphorically grabbing a party by the lapels, so to speak, and saying, “as I see it, you’re very likely to lose, and here’s why,” which is something that the party’s trial counsel is very unlikely to say; and (2) when a defendant agrees to mediate, that fact alone is often interpreted as a concession that the defendant should pay something, and the only question remaining is “how much.” Of course, YMMV. (Disclosure: My wife is an arbitrator-mediator in labor- and employment cases.)
 Failure to mediate forfeits attorneys’ fees: This language is modeled on a provision in a standard California residential real-estate purchase agreement, which has been enforced at least twice by courts. See Cullen v. Corwin, No. C067861 (Cal. App. June 7, 2012) (reversing award of attorneys’ fees to defendant that successfully moved for summary judgment but refused to participate in mediation as required by contract), citing Lange v. Schilling, 163 Cal. App.4th 1412 (2008) (reversing award of attorneys’ fees to successful plaintiff because plaintiff did not attempt to mediate before filing suit as required by contract).
 Minitrials are thought to enhance the prospect of settling disputes by getting representatives of the parties’ senior management to work with a neutral advisor in hearing adversarial presentations of the parties’ positions. At this writing, the American Arbitration Association’s mini-trial procedures can be found at http://goo.gl/IVcDy. Show more
 No recourse against other persons: This provision is adapted from language proposed by a noted corporate-law practitioner. See Glenn D. West & Natalie A. Smeltzer, Protecting the Integrity of the Entity-Specifc Contract: The “No Recourse Against Others” Clause-Missing or Ineffective Boilerplate?, 67 BUS. LAW. 39, 71-72 (2011) (ABA Section of Business Law membership required). In an email exchange with the author on August 8, 2012, Mr. West commented that “I find general acceptance of some version of my clause as long as it’s mutual. Both sides of the transaction have the same general interest in protecting the integrity of the entity-specific nature of the contract; and if they don’t, this clause smokes that out and there is a real discussion about guarantors.”
 Notices in writing: Most commercial contracts include a provision requiring notices to be in writing. Query, however, whether a court would give effect to such a requirement if it believed that doing so would be be unjust, or whether instead the court would hold that the parties had orally agreed to waive the requirement. See generally the discussion in the footnotes of the “Amendments must be in writing” and “Waiver – signed writing required” sections.
 Effectivness of notices: In this provision, notices are effective upon receipt or refusal — because that can be independently confirmed by delivery services (but see the discussion below about email notices) — as opposed to, say, X days after being mailed. Parties anticipating sending out many routine notices by mail might want to use the “Notices by mail” option.
 Notice to organization effective only when received or refused by agent: Here’s a hypothetical situation to illustrate the reason for this provision: Party A sends a late-night messenger to deliver a notice to Party B. The messenger bangs on the door at Party B’s office. A janitor, who works for a janitorial contractor and not for Party B, answers. The messenger hands the notice to the janitor and leaves. The janitor shrugs and throws the notice in the outgoing trash. This provision makes it clear that the notice was not effective.
 Notice by mail (option): A notice-by-mail provision is likely to be seen in business-to-consumer (“B2C”) contracts, in which the business wants to be able to give notice via a mass mailing. Such a provision is less likely to be seen in a business-to-business (“B2B”) contract, because the party that anticipates receiving a notice will often not want to roll the dice that the notice will timely get there if sent by mail. Show more
 Marked for attention (notices): This language is included because in a corporate setting, hard-copy notices can sometimes go astray if the mailroom people don’t know whom to send it to.
 Address-change notice required (notice option): Many contracts require that a party give notice of any change in its address for notice. In an era of modern communications, that seems unnecessary. The main language of this section says simply that permissible addresses for notice include, in addition to the addresses stated in the Agreement, “any other address reasonably communicated.”
 No notice by email (notice option): A party might not regard email as reliable enough for receiving notices from the other party about certain subjects such as breach, termination, etc. (Note that a notice sent by email might well be effective even if no one in the addressee’s organization knows the notice has been received by the email system; see § 15(e) of the Uniform Electronic Transactions Act, which states that “[a]n electronic record is received [and therefore an email notice would be effective] … even if no individual is aware of its receipt.”)
 Policy statements not to be disputed: Some courts have held that a written-amendments requirement can be eliminated by an orally-agreed amendment, or that a written-waivers provision can be waived orally without a writing. (See the footnotes to the written-amendments and written-waivers sections.) This provision tries to make it an independent breach of contract for a party to make such an assertion. Whether a given court would give effect to this provision is of course another matter. Show more
 Prohibitions apply to attempts, etc.: This provision would give, say, a software licensor a weapon to use against a licensee that tried to get around restrictions by having someone else do forbidden stuff. A licensee, however, might be concerned that it might be easy to make, but difficult to refute, an accusation that the licensee “attempted” to something forbidden.
 Publicity only when agreed: This is a fairly typical provision when one or another party wants to keep the parties’ relationship confidential, and/or to maintain control over commercial use of its name.
 Redlining representation: The main practical purpose of this provision is to allow each party to sign the final version of the contract document without having to read the document cover-to-cover again to be sure the other side didn’t surreptitously make any unagreed changes. For further discussion, please see Part 1 and Part 2 of two 2003 blog posts. (During email exchanges of electronic preliminary drafts, some practitioners prefer to generate their own redlines to see what changes the other side made, as discussed in comments to a 2010 blog post on that subject by Ken Adams. But that practice won’t be of much use when receiving a final hard-copy version for signature.)
 Reliance on entire-agreement, written-amendment and written-waiver requirements: Courts will not always give effect to entire-agreement, written-amendment, and written-waiver provisions. This section essentially yells out, “Hey! We really mean it!”
 Express, knowing, and voluntary agreement (reliance of written amendment): This provision is in bold to make it conspicuous.
 Reliance on external representations disclaimed: This no-reliance clause tries to preclude claims by a party that it was fraudulently induced into signing a contract by misrepresentation, and that it should therefore be allowed to undo (rescind) the contract and/or seek punitive damages. Courts have been known to give effect to no-reliance clauses, especially when the parties are sophisticated (but often not in cases of intentional fraudulent concealment). See, e.g., One Communications Corp. v. JP Morgan SBIC LLC, Nos. 09-1815-cv, 10-0424-cv, slip op. at 4-5 (2d Cir. June 17, 2010) (affirming summary judgment dismissing misrepresentation claim). Show more
One author believes that listing specific subjects for which reliance on representations is disclaimed might help persuade a court to enforce the no-other-representations disclaimer – see James W. Hutchison, Getting Burned by Boilerplate …, at http://bit.ly/87H7tG (accessed Dec. 8, 2009).
For an overview of New York law on this subject, see Brian S. Fraser and Tamala E. Newbold, Big Boy Update: Recent New York Case Demonstrates Limits of Big Boy Provisions Where Affirmative Acts of Concealment Are Alleged (Sept. 24, 2010, accessed Oct. 21, 2010).
 Savings clause: This provision tries to reduce the chances that a judge might throw out the whole contract merely because of one problem clause. Drafters should consider, though, whether some provisions of the Agreement should NOT be severable, so that the relevant section or sections are applied on an “all or nothing” basis. For example, suppose that an agreement to arbitrate contained a provision for enhanced judicial review of the arbitration award: It might be that, without such an enhanced right of appeal, a party would prefer to take its chances in court, and not want to arbitrate. In that particular situation, an all-encompassing severance clause might not be especially wise.
 As between the parties (savings clause): Suppose that a company used a form contract; suppose also that a court held that a particular provision — for example, a punitive-damages exclusion in an agreement to arbitrate — was invalid. The company might still want to assert the provision against other counterparties who had entered into the same form contract, and wouldn’t want the savings clause itself to implicitly extend the invalidity to all other counterparties. (The company might be barred from doing so by the doctrine of collateral estoppel, but that’s another matter.)
 Signers’ authorization to sign: This provision can make signers stop and think — because they are making a personal representation — as to whether they have signature authority, so as to reduce the odds of later problems in that area. What kind of problems? A corporation or other organization might try to get out of the contract by claiming that its signer did not in fact have signature authority (known as actual authority). The other side can repel such an effort by showing that the signer had apparent authority — that is, that it was reasonable for the other side to have concluded that the signer did indeed have signature authority. An explicit representation by the signer can help the other side make its case on that score. (Of course, An individual signer might not want to undertake any liability exposure on the off chance that his or her signature was not authorized.)
 Signature in counterparts: The term “counterparts” is simply a fancy way of saying that the parties can (and often will) sign multiple copies of a contract, so that each party can have its own “original.”
 Signature in duplicates: This provision allows the parties to sign separate copies, with no one copy being signed by all parties.
 Delivery by electronic transmission: It’s now extremely common, and almost standard practice, for parties to FAX signed signature pages to each other, and increasingly, to email scanned PDFs to each other. This practice has been validated by statute in most of the industrialized world; for discussion and citations, see the Wikipedia article, Electronic signature.
 Signers’ availability in future proceedings: This provision tries to forestall a dispute like that of Indiana v. IBM Corp. , No. 49S00-1201-PL-15 (Ind. March 21, 2012) (reversing trial court’s order directing governor to testify). In that case, Indiana governor Mitch Daniels personally signed a contract with IBM to modernize and improve the state’s welfare system. He seems to have been personally involved in the negotiation of the contract as well. But he refused to testify in a deposition concerning the contract, citing a statutory provision to the effect that the state’s governor was “privileged from arrest on civil process, and from obeying any subpoena to testify.” The trial court ordered the governor to testify. The state’s supreme court, however, reversed — but it also noted that, if the governor’s refusal to testify would result in unfairness to IBM, then the trial court could take appropriate remedial measures such as adverse inferences or exclusion of certain evidence. See id., slip op. at 6-7.
 Status-review conferences: It’s been my impression that many business-contract disputes could be avoided if the participants would just talk with each other regularly about the five G-PP-AA factors listed in subdivision (c). In particular, it’s often extremely helpful to hold such a conference immediately after — or better yet, before — a missed deadline or other potential breach. Sure, this is just Management 101, but it never hurts to be reminded. ¶ Some of the language in this provision isn’t strictly required, but it’s included anyway to reassure the parties that the provision isn’t going to be expensive or burdensome. For example, under this language, if neither party ever asks for a status-review conference, none is required.
 Telephone conference calls for status-review conferences: This is an example of language intended to reassure the drafters and their clients that they aren’t committing themselves to potentially-expensive in-person meetings.
 Agenda template – G-PP-AA (status-review conferences): This agenda template is, in essence, “here’s where we are, here’s where we seem to be headed, and and here’s where we want to be headed.” Note that this provision doesn’t require the parties to discuss the G-PP-AA factors, but simply reminds them of the list.
 Meeting minutes (status-review conferences): Meeting minutes can be especially important in documenting specific to-do assignments. Meeting minutes can can also help litigation counsel reconstruct “what happened, when, and why,” if things go wrong.
 Survival provisions like this are not uncommon in contracts of any length; such provisions try to preclude trial counsel for one party or another from trying to argue that a particular contractual right or obligation ended when the contract did. (Drafters should be careful about what rights and obligations would survive termination – see Jeff Gordon, Night of the Living Dead Contracts, at http://goo.gl/n2YSO (2006; accessed Dec. 3, 2010).)
 Third-party beneficiaries disclaimed: As a general rule, for a third party to be able to claim rights as a beneficiary under a contract, the parties must have intended the beneficiary to have such rights (see generally the Wikipedia article on third-party beneficiaries). The disclaimer of this section tries to make it clear that the parties intended just the opposite (except to the extent that the Agreement expressly says otherwise).
 Waivers must be in writing: Courts might not give effect to a written-waivers-only provision; the rationale is usually that, in proper circumstances, the parties can orally agree to modify or even waive the writing requirement. As Justice Cardozo stated, “Those who make a contract, may unmake it. The clause which forbids a change, may be changed like any other. The prohibition of oral waiver, may itself be waived. … Whenever two men contract, no limitation self-imposed can destroy their power to contract again ….” Beatty v. Guggenheim Exploration Co., 225 NY 380, 387-88 (1919) (modifying judgment below; citations omitted); see also the discussion in the footnotes to the written-amendments section above.