Contract DraftingClass 5

University of Houston Law Center

D. C. Toedt III

In the news ….

“The seven assistants had signed extensions in 2010 and the club believed it was for two years that would expire at the end of the 2011 season.

“However, the applicable clause in dispute states, ‘shall terminate on the later of January 31, 2012 or the day after the Jaguars’ last football game of the 2012 season and playoffs … ‘ “

(Result: GC fired ….) Source: http://goo.gl/WvyZZ

Exercise 18-4: Legalese Except as herein to the contrary provided,

each party releases, remises, and forever discharges the other from any and all actions, suits, debts, claims, and obligations whatsoever, both in law and equity, that either of them ever had, now has, or may hereafter have, against the other by reason of any matter, cause, or thing to the date of the execution of this Agreement.

Microsoft NDA – confidentiality provisions

Section 1(a) – “designate”

How might a disclosing party “designate” information as being confidential?

What problems might arise from any particular way or ways of doing so?[Write your own answer, then team discussion]

Section 1(a) – affiliate info

What if any problems might arise in the future from this section's treatment of "Affiliates"?[Write your own answer, then team discussion]

Section 1(a) – carve-outs

Does the list of "carve-outs" from Confidential-Information status seem complete enough? Why or why not? [Write your own answer, then team discussion]

Section 2(a) – security

What sort of security precautions must a receiving party take with a disclosing party's Confidential Information? Is "Fort Knox" necessary?[Write your own answer, then team discussion]

Section 2(a) – obligations

Find the potentially-fatal flaw in the confidentiality obligations of this section.[Write your own answer, then team discussion]

Section 2(b) – subpoenas, etc.

Should this provision be merged into the list of exceptions from confidentiality in section 1(b)? Why or why not?[Write your own answer, then team discussion]

Section 3 – remedies

How is this "remedies" provision different from that at the end of the Coca-Cola employee NDA § 2?[Write your own answer, then team discussion]

Section 4(c) – export controls

What could happen if the receiving party sends the disclosing party’s information outside the U.S. --- or to a non-U.S. national --- in violation of the export-control laws? [Write your own answer, but no team discussion]

Section 4(d) – residuals

Any potential practical problems with the "residuals" portion of this provision? [Write your own answer, then team discussion]

Section 4(d) – residuals

What do you think about the drafter's inclusion of the "residuals" portion as a "Further ...."? A. It’s fine [why?]

B. It’s sketchy [why?]

C. It’s unethical [why?]

[Write your own answer, then team discussion]

Section 4(d) – employee freedom

Why is this included? [Write your own answer, then team discussion]

Mock negotiation

FACT SITUATION (Q. 32)

Your client calls and says she just had a con-versation over coffee with a potential business alliance partner.

During the conversation, she and the prospective partner discussed information that they agreed to keep confidential.

QUESTION:

What kinds of questions would you ask the client?[Write your own answer, then team discussion]

FACT SITUATION:

You and your teammate represent a party that wants to enter into an NDA.

The team sitting next to you represents the other party to the NDA

The client of the team sitting furthest to my left is the only party likely to disclose its confidential information to the other party.

QUESTION: Should the NDA protect just the

disclosing party’s information, or the information of both parties? What would each party likely say? What alternatives might exist?1. Write down (brief) answers of your own

2. Discuss with your teammate(s)

3. Negotiate with your adversary team

QUESTION: Should the NDA protect information of

the disclosing party’s affiliates? What would each party likely say? What alternatives might exist?1. Write down (brief) answers of your own

2. Discuss with your teammate(s)

3. Negotiate with your adversary team

QUESTION: Should the NDA require all confidential

information to be marked to be protect-able? What would each party likely say? What alternatives might exist?1. Write down (brief) answers of your own

2. Discuss with your teammate(s)

3. Negotiate with your adversary team

QUESTION:

Should an NDA distinguish between "confidential information" and "trade secrets" for any particular purposes? What would each party likely say? What alternatives might exist?1. Write down (brief) answers of your own

2. Discuss with your teammate(s)

3. Negotiate with your adversary team

QUESTION:

What kind of security precautions should the receiving party be required to take? What would each party likely say? What alternatives might exist?1. Write down (brief) answers of your own

2. Discuss with your teammate(s)

3. Negotiate with your adversary team

QUESTION:

Should the NDA include a “sunset” clause that ends the receiving party’s confidentiality obligations? What would each party likely say? What alternatives might exist?1. Write down (brief) answers of your own

2. Discuss with your teammate(s)

3. Negotiate with your adversary team

Next time ….

Microsoft NDA - general provisions (through Z&B p. 49)

We’ll start on executive employment agreements (Z&B pp. 51 et seq.)

Much of the future reading will be familiar (because you’ll have seen it before)

End of class