Top 10 Practical TipsTop 10 Practical TipsTo Either Avoid LitigationTo Either Avoid Litigation

Or To Protect YourselfOr To Protect YourselfIn Computer ContractingIn Computer Contracting

ACI Computer ContractingACI Computer Contracting

San Francisco, CaliforniaSan Francisco, California

October 20, 2005October 20, 2005

ParticipantsParticipants

Steven BrowerSteven Brower Litigation AttorneyLitigation Attorney Orange County, CAOrange County, CA sbrower@sortlaw.cosbrower@sortlaw.co

mm William L. Coats, IIIWilliam L. Coats, III

Litigation AttorneyLitigation Attorney Palo Alto, CAPalo Alto, CA Bill@lawfirm.comBill@lawfirm.com

Robert KohnRobert Kohn John HansenJohn Hansen

Assumptions and GoalsAssumptions and Goals

These tips apply to contracts where the 2 These tips apply to contracts where the 2 sides might have different business goalssides might have different business goals Even real Even real ““partnerspartners”” don don’’t always agreet always agree There is nothing like a mutual profit to make There is nothing like a mutual profit to make

people forget they donpeople forget they don’’t like each othert like each other No contract is so large, or so small, that No contract is so large, or so small, that

you canyou can’’t have a disputet have a dispute There are good choices that can be madeThere are good choices that can be made

Do you really want to avoid Do you really want to avoid litigation?litigation?

Litigation is getting into court, or Litigation is getting into court, or staying out of court, whichever is staying out of court, whichever is better for you in the particular better for you in the particular situation.situation. You may not want to be in court, but You may not want to be in court, but

that doesnthat doesn’’t mean you want to tell the t mean you want to tell the other side about your preferencesother side about your preferences

AttorneysAttorneys’’ Fees Clause Fees Clause

Notice the location of the apostropheNotice the location of the apostrophe Are you more likely to be paying fees or Are you more likely to be paying fees or

trying to collect feestrying to collect fees Experts witnesses and costs are *not* Experts witnesses and costs are *not*

attorneyattorney’’s feess fees It is very important whether you say It is very important whether you say

““reasonablereasonable”” fees or fees or ““allall”” fees (maybe) fees (maybe) Scope of the clauseScope of the clause

Only for collection of monies dueOnly for collection of monies due Mutuality may be presumed by lawMutuality may be presumed by law

Venue ClauseVenue Clause

An idea to minimize litigation, and An idea to minimize litigation, and avoid dispute over two different avoid dispute over two different locationslocations ““If you sue me, it must be in my location. If you sue me, it must be in my location.

If I sue you, it must be in your location. If I sue you, it must be in your location.”” Before you insist on a location, make Before you insist on a location, make

sure you plan to be there in 5 yearssure you plan to be there in 5 years

Choice of Law ClauseChoice of Law Clause

Few cases are resolved based on Few cases are resolved based on which choice of law is usedwhich choice of law is used

It is difficult for counsel to agree to a It is difficult for counsel to agree to a body of law which they donbody of law which they don’’t knowt know

Understand the Subject MatterUnderstand the Subject Matter

You must understand the subject You must understand the subject matter in order to include matter in order to include appropriate remedies and appropriate remedies and protectionsprotections

““IndemnificationIndemnification”” is a Misnomer – is a Misnomer – The Correct Term isThe Correct Term is

““Invitation to LitigationInvitation to Litigation”” Indemnification just about never Indemnification just about never

worksworks

DonDon’’t Do A Contract Until You t Do A Contract Until You Know What Is Being DeliveredKnow What Is Being Delivered

There is no substitution for There is no substitution for specificationsspecifications

If the business people understand what If the business people understand what they are getting (or giving) then:they are getting (or giving) then: There is a better chance that they wonThere is a better chance that they won ’’t be t be

asking about litigationasking about litigation They should be able to explain itThey should be able to explain it

If they canIf they can’’t, just be sure that they dont, just be sure that they don’’t t complain about the fact that a jury will be complain about the fact that a jury will be deciding for themdeciding for them

Alternative Dispute ResolutionAlternative Dispute Resolution

The term is a misnomer – Mediation The term is a misnomer – Mediation and Arbitration should not be and Arbitration should not be referred to in the same paragraphreferred to in the same paragraph

The only time when mediation is a The only time when mediation is a bad idea is when the subject matter bad idea is when the subject matter isnisn’’t worth talking about (which t worth talking about (which should mean that it isnshould mean that it isn’’t worth t worth litigating) litigating)

Arbitration ClausesArbitration Clauses

Make sure that your client understands Make sure that your client understands that the arbitrator is not required to that the arbitrator is not required to follow the lawfollow the law

If you want the right to appeal, you need If you want the right to appeal, you need to set a mechanism outside of the courtsto set a mechanism outside of the courts

Limitations on discovery may, or may Limitations on discovery may, or may not, be to your advantagenot, be to your advantage

Establish qualifications for the Establish qualifications for the arbitrator(s)arbitrator(s)

Questions And AnswersQuestions And Answers

Hopefully we have Hopefully we have inspired you to inspired you to think about your think about your profession in a new profession in a new mannermanner