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Announcement: The Common Draft contract clauses and templates, with extensive research notes and commentary, are posted (in draft). If you’d like to be notified of significant developments in the project, please subscribe to updates at right, because I’ll be posting announcements on this blog. See also my first e‑book, Signing a Business Contract? A Quick Final Checklist for Greater Peace of Mind.

For the love of God, will everyone please STOP with the use of they as a gender-neutral singular pronoun. History shows us that there's a better way: Decades ago, feminists coined the term Ms.; that neologism has all but completely replaced the old-fashioned Miss and Mrs. Those concerned with gender neutrality should do likewise, instead of inflicting ambiguity on the rest of us by (mis)using they.

In an English case, a Hong Kong freight forwarder used its standard bill-of-lading form in accepting cargo for shipment from China to Venezuela. The form provided in part that "[t]his Bill of Lading and any claim or dispute arising hereunder shall be subject to English law and the jurisdiction of the English High Court of Justice in London." The UK Court of Appeal, after reviewing case law concerning similar language, held that the bill of lading's wording conferred exclusive jurisdiction on the English courts. Hin-Pro International Logistics Limited v Compania Sud Americana De Vapores S.A. [2015] EWCA Civ 401 ¶¶ 4, 61-78.

(Hat tip: Mark Anderson, who in his write-up makes additional observations about the case.)

In my contract-drafting class, we've been discussing employment agreements, studying (among others) those of Martha Stewart and Facebook's Sheryl Sandberg. I've long thought that "politically" it'd be advantageous for executives to sign their companies' standard employment-agreement forms,* along with an addendum to cover executive-specific issues such as severance and the like. That way, the HR department could legitimately tell employees, "everybody signs this — even the executives sign it, along with an addendum with a few extra provisions arising from their positions."

* This presupposes that all employees sign employment agreements. In the tech world that's a fairly-common practice, mainly to nail down the employer's ownership of IP rights, and secondarily to confirm employment-at-will.

You get what you inspect, not what you expect

In working on the Common Draft audit-rights clause, I found a citation for a saying I learned in the nuclear Navy: You get what you inspect, not what you expect.

The source of the citation is certainly authoritative: Admiral Jonathan Greenert, the current Chief of Naval Operations — that is, the top officer in the U.S. Navy* — who came up as a nuclear submariner.

* Unless the Chairman of the Joint Chiefs of Staff is also a Navy officer

Document those oral conversations!

Imagine that "Alice," a lawyer, has a phone conversation with "Bob." During the conversation, Bob says something that's important to a matter that Alice is handling for a client. It'd be wise for Alice to document the conversation promptly — for example, with a confirming email or letter to Bob (for which Alice would want to be able to prove that Bob actually received it), or at the very least, with a memo to file written promptly after the conversation.

Why would Alice want to do this? Because someday in court, she and Bob might get into a "he said / she said" swearing match about what exactly was said during the phone conversation. If Alice can't produce contemporaneous written documentation of the conversation, the judge might find her version less credible than Bob's version.

Something much like that happened in Bell v. Safeco Ins. Co. of Illinois, No. HHDCV126028741S (Conn. Super. Oct. 7, 2014). There, an attorney testified that two insurance adjusters had told her orally that the limitation period for making an underinsured-motorist claim was longer than it actually was under the insurance policy terms. The two adjusters denied having said that; they also produced contemporaneous written summaries of their conversations in question. The attorney produced a memo to file, but it was written long after the fact.

The court sided with the insurance carrier, remarking that:

This finding is based both on [the adjusters'] demeanor while testifying and on the corroborative evidence of the claim activity log.

Attorney Crockett's file notes, by contrast, were created many months after the alleged conversations, at a time when she had to rely on distant recollections and after she had realized that the limitation period might have run. [Emphasis and extra paragraphing added.]

Lesson: After any important oral conversation, it's not a bad idea to promptly send a follow-up email confirming any important points of the conversation.

(Hat tip: Tara Kowalski of the Jones Day law firm.)

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