Contracts and Contracting:Laws, Issues, and Tips

Definitions

Request for Proposal

a formal request to vendors to make a proposal offer to provide a product or service according to the requestor’s specific needs and budget.

Contract

a legally binding, formal agreement provides terms and conditions that govern the use of goods or services.

One-sided Agreement

a contract that protects the owner’s

interest, which states the terms and conditions that govern the use of a website, the availability, accuracy, or warranty or lack thereof of content provided on the site, and that litigation must be in the owner’s local jurisdiction.

Clickwrap

forces a site visitor to affirmatively select a button that allows them to accept the terms and conditions of a website or software use agreement. If the visitor chooses not to accept, the site will not allow entry to the site or the software to be uploaded.

Browsewrap

less enforceable than clickwrap when it provides an inconspicuous link to an agreement that may be in tiny writing at the bottom of the webpage. The link should be in a conspicuous location and clearly state that it is the location of terms and conditions that govern use of the site.

Letter of Intent

also known as Memorandums of Understanding, Agreement in Principle, Term Sheet

usually intended to be a prelude to a more formal agreement or contract. They summarizes the agreement before further, more detailed negotiations of a formal contract.

Confidentiality agreements

the most common type of agreements. They are agreements on the reciprocal exchange of confidential information, and are not derived from standard, cookie cutter templates.

Trade secret

an idea that has independent economic value derived from not being known or readily available to those who could gain economic value from knowing the information. Also, efforts must have been made to maintain nondisclosure and secrecy.

Warranty

a guarantee that goods or services are as represented, or will be repaired or replaced if defective; protection against unacceptable loss for a measure of time.

Limits of Liability

the maximum or minimum amount of liability taken at the outset of an agreement. Limits can range from no liability accepted, to solely on technical failure, performance, to cost paid for the product or service, excluding losses such as documents, data, other software, or other tangible or intangible losses.