Session #402 Why US Standard Terms Won't Work Overseas Comparing US, EU, Latin American and Asian Enforceability Challenges Session #402 - Why US Standard Terms Won't Work Overseas Comparing US, EU, Latin American and Asian Enforceability Challenges Sarah Sederstrom / Contracts Counsel / KBM Group Mark Webber, Partner / Fieldfisher Chris DiCarlo / Corporate Counsel / Good Technology Corporation The contractual dilemma An impending overseas deal, but only local terms are on hand Limited time and its your deal General text slide Options: - Push to use the local terms without any review? - Fully localise the US terms - Review of mandatory laws Specific consumer laws / rights cannot be overruled Negotiation required and this will dictate form Appetite for negotiation is limited Framework can dictate use and applicability 4 Cross-border contracting Ability to impose a one-size-fits-all approach High Low But should you? Recognised/ Approved Form Standard B2B Form Negotiated contract Consumer How fast should you drive? V d 6 Source: https://commons.wikimedia.org/wiki/User:Javitomad#/media/File:LegalSystemsOfTheWorldMap.png Legal systems of the World IACCM Top Terms in Negotiation Report (and see ACC Boston Materials for this Session) International counsel - the sophisticated juggling act Do not lose perspective Take the right local advice and read between the lines Choose the advisor careful Look for clues in their language Many decide to accept some commercial risk here Make cultural interpretations and gather evidence Understand the differences in local regulatory systems Make the most of the resources and information available to you Understand what factors drive contractual risk What Risks? Who am I dealing with? Which entity? Location and location of operations/assets/HQ/control If this goes wrong: Whats most likely to fail/happen? Whats the impact? ($ value?) What limitations are there around negotiation Pre-contract considerations Freedom of contract For most B2B contracts you really can choose Concepts of applicable law and electing a jurisdiction are frequently confused Think about the reality before you jump to whats familiar and comfortable What actual risks? What likely risks? What may you need to rely on in the contract? Alternative options to home and courts (pragmatic) Dont overly complicate as a compromise Effectively excluding liability Make the necessary provisions for mandatory laws Am I dealing with the same concepts ? Are there any overriding principles which will interfere with my provisions ? Whats the norm? Blank USA Watch exclusions from caps on direct/indirect Indirect: Vague, list specific types of damages to be excluded and customize Some damages cant exclude from liability, e.g. statutorily imposed (e.g. HIPAA) Lost profits (direct and indirect) Common Law Blank Severability Reasonableness to limitation (NA to intl supply contract) Conforming language for items that cannot be excluded: death/personal injury due to negligence Conforming language for items that cannot be excluded: death/personal injury due to negligence UK No requirement of capital letters Common Law Blank Use capital letters B2B: 30 day notification for defects and price reduction (180 for hidden defects) Exclusion or waiver provisions unenforceable; lost profits are direct and cannot be waived Cannot exempt liability for third party IP claims LOL generally enforced if reasonable and no high level negligence or wilful misconduct Brazil Civil Law Blank China Exclusions for deliberate intent or gross negligence are void (in addition to personal injury and death) Use text, punctuation and typeface to mark limitations Explain exemptions and negotiate Mixed (Civil law and customary) Blank Other exclusions, depending on type of contract Transparency and Formality Specific exclusions, not to max extent allowed by law Capitalization not a focus Exclusions not allowed: essential duties, intentional and grossly negligent acts, restricting liability to certain amount of indemnity (along injury to life, body or health not allowed.) Germany Civil Law Do familiar IP terms of art have the same effect ? What is needed to perfect a legal assignment (and can additional assurances be gained)? Are there additional rights which I could attain protection for or which require additional consideration? Dealing with Intellectual Property Make the necessary provisions for mandatory laws Take care: Where can you exclude, and Where does trying to exclude get you into more difficulty? Consider and assess mandatory laws Assess and understand what terms are automatically implied into contracts What is the subject matter of the contract? What may be implied? If relevant, do I want to exclude this (and how can I)? Understand what you are trying to achieve and how Revenue $ ! Differentiation from your peers Stakeholder engagement Demonstrating that you take your legal obligations seriously Enabling you to address legal obligations correctly and in a timely fashion Helping you manage cross-jurisdictional issues properly Helping you close deals, attract customers Integrating legal as a part of the sales team Any questions? Thank you for attending. Mark Webber, Partner - Fieldfisher Sarah Sederstrom / Contracts Counsel / KBM Group Chris DiCarlo / Corporate Counsel / Good Technology Corporation