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I have a Master Services Agreement and a prospective

I have a Master...

I have a Master Services Agreement and a prospective customer has requested a couple changes which I am not sure of its legal impact that I would like to discuss

Lawyer's Assistant: What state are you in? It matters because laws vary by location.

I am located in Florida and the Client in Indiana

Lawyer's Assistant: What steps have you taken so far?

None, just got the requested amendments back from the client

Lawyer's Assistant: Anything else you want the lawyer to know before I connect you?

Three paragraphs of concern: 1. Dealing with Intellectual Property and Work for Hire; 2. Dealing with Dispute resolution and 3. Dealing with Liability for Consequential Damages

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Customer reply replied 25 days ago
Page 3 Paragraph 12: I have no problem adding the “license to use” clause, however will need to check with an attorney what the implications are of the “work made for hire” clause as very often we will be building solutions, create SQL scripts or other customization for clients in the general course of consulting of which portions we will then reuse or adapt with other clients. Our clients typically benefit from this collective approach as we do not try to re-invent the wheel with every client. Now I can understand if we are building a custom application for TCU that would give TCU a competitive edge that it would fall under the work made for hire laws, but I am reluctant to state that “All other deliverable will be the property of COMPANY…”
Customer reply replied 25 days ago
Page 5 Paragraph 18: Dispute Resolution: I will need to seek legal advice as to the impact of changing this paragraph, as it was previously added by an attorneyPage 5 Paragraph 20: No problem adding the EEO clause; however will need to seek legal advice on the removal of the remainder of the paragraph, as it was previously added by an attorney
Answered in 28 minutes by:
3/28/2018
Attorney Wendy
Category: Legal
Satisfied Customers: 504
Experience: Member at Keefer & Keefer LLC
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Hello. My name is ***** ***** I am an attorney. I am currently reviewing the changes with which you are concerned and should have my thoughts to you shortly.

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Customer reply replied 25 days ago
Thank you

The change to Paragraph 12 allows Lamin at its own cost and expense to develop intellectual property and to remain the owner of that intellectual property. In other words, sometimes when one company or person is asked to do work for another and while doing that work new intellectual property is developed, the company paying for the work is deemed the owner of that intellectual property under the "work for hire" doctrine. This just limits that a little but also grants the company a license to use any such intellectual property. Since Lamin is a consultant and not a full-time hire and presumably Lamin Solutions also performs work for other companies or clients, this change is not too concerning or unusual.

The change to Paragraph 18 is a bit more concerning. Arbitration is typically a more efficient and less costly way to essentially "litigate" any disputes the parties have about the contract. Not only does this remove arbitration as the means of settling any such dispute, it also identifies Lamin's home county and state as the proper venue for any court case involving this contract. If Lamin is providing services for you at your location, I would prefer your state's laws apply and that any court case be filed there in Florida. You may want to push back on this change. The other thing to consider if they will not agree to arbitration - which really is a good way to resolve disputes - is to at a minimum require a good faith attempt at mediation (a process that helps parties resolve disputes out of court, but which unlike arbitration is not binding and settlement is only reached if the parties voluntarily reach an agreement) prior to filing any lawsuit. The goal is to try to set up a dispute resolution process that is quick, inexpensive, and keeps the matter out of the courts unless absolutely necessary.

As to Paragraph 20, if you are a federal contractor this really doesn't change obligations you already have. You must follow all equal employment opportunity requirements, meaning you do not hire with regard to age, gender, race, religion and the like.

I saw your request for a phone call come through; as I was nearing completion of this response I rejected that offer at this time in hopes of saving you that money. But if you still have questions I am happy to offer that premium service or to answer any additional questions via this email. If I answered your questions and provided excellent service, I would greatly appreciate your 5 star rating at this time.

Please note: This information is ​for educational purposes only and is not legal advice. No course of action is being proposed and no attorney-client relationship or privilege has been formed as a result of this conversation.

Attorney Wendy
Category: Legal
Satisfied Customers: 504
Experience: Member at Keefer & Keefer LLC
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Customer reply replied 25 days ago
Just to be clear, My company is Laminin Solutions.
Joycelaw
Joycelaw, Attorney
Category: Legal
Satisfied Customers: 114
Verified
Phone call session started
Customer reply replied 25 days ago
Also: Laminin is not currently a federal contractor. The MSA we are looking at here is Laminin (my company) agreement I sent to the customer. The customer is requesting the amendments. My Company, Laminin Solutions, want to contract to provide primarily remote consulting services to the customer, TCU.

Sorry about that - wasn't sure which company was yours. I do not see a problem with the change to Paragraph 12, then, unless you do not want to grant the company a license to any intellectual property created by you.

I think it even more important though that you try to keep the arbitration provision in should there be any issues about the intellectual property those issues are arbitrated and not fully litigated.

And, if you are providing services primarily remotely I would also not consent to jurisdiction in an out of state court and would instead request any litigation be filed, after arbitration or mediation, in your home jurisdiction.

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Customer reply replied 25 days ago
Okay, then what about the impact of customer wanting to remove the entire Liability for Consequential Damages paragraph? Does that unduly expose my company?
Customer reply replied 25 days ago
BTW, I see that I got charged the $59 for a phone call regardless

You should get a refund for the phone call; I don't have control over that part but will check with the moderators for you.

On the deleted damages, they also deleted your warrantying any standard of workmanship which actually helps you and not them; so that is odd. If you are the one providing services to them, it actually seems quite odd to me that they would delete the warranty and reference to damages as it is more likely damages would flow to them for your failure to perform than the other way. But, of course, we can never envision all future scenarios.

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Customer reply replied 25 days ago
Okay. Thank you very much. I will rate you 5 stars now. It definitely provides me with advice I can take back to the customer as I push back against especially the Dispute Resolution paragraph. I appreciate the help.

In reading through the deleted damages provision, you may want to ask that a more general limitation be considered in lieu of complete deletion - something like, "neither party shall be liable to the other for any unforeseeable damages as long as the parties perform as would be expected in their relative industries and in connection with the type of work being provided by Laminin." You do want some protection but also don't necessarily want the warranty of workmanship added back in.

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In other words - and sorry for the many emails - you don't want that provision completely deleted but you can soften it some.

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Customer reply replied 25 days ago
Thank you. How do I rate you? Looks like I cannot click on the green stars at the top? All 5 are green, does that mean I already rated you?

You did already rate me; I think that may happen automatically when you ask for a premium service for a phone call. If you have any other questions about the contract or anything they come back with, you should be able to return to this conversation and email me for follow-up.

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Customer reply replied 25 days ago
Thank you. Will do. I will now go amend the contract and get it back to them for another round. :)

Best of luck and let me know if you need anything further.

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Customer reply replied 17 days ago
The below was the conversation with the client:1. In your opinion, is it worth not gaining a client if they are not willing to agree to using Florida law in the remote chance that there are disputes? They are very insistent on wanting to use Indiana law. I am okay with them proposing a mediation clause.2. The deletion of consequential damages does not seem to be putting Laminin (me) at a substantial risk, so I think I will accept that.Conversation extract:ARNIE>> Page 5 Paragraph 18: Arbitration is typically a more efficient and less costly way to essentially "litigate" any disputes the parties have about the contract. The other thing to consider if you will not agree to arbitration - which really is a good way to resolve disputes - is to at a minimum require a good faith attempt at mediation (a process that helps parties resolve disputes out of court, but which unlike arbitration is not binding and settlement is only reached if the parties voluntarily reach an agreement) prior to filing any lawsuit. The goal is to try to set up a dispute resolution process that is quick, inexpensive, and keeps the matter out of the courts unless absolutely necessary. Since we will be providing services primarily remotely I do not want to consent to jurisdiction in an out of state court and would instead request any litigation be filed, after arbitration or mediation, in our home jurisdiction.
CLIENT>>Louise will NOT agree to arbitration but they can propose mediation language which will likely be OK provided it and governing law are Indiana.
ARNIE>> Page 5 Paragraph 20: Was it your intent to remove the entire paragraph dealing with Liability for Consequential Damages? Maybe we can write in a more general limitation be considered in lieu of complete deletion – something like “neither party shall be liable to the other for any unforeseeable damages as long as the parties perform as would be expected in their relative industries and in connection with the type of work being provided by Laminin.”CLIENT>>The consequential damages section was deleted because it duplicated substantively the same language above so that needs to stay deleted

1. I think using Indiana law is not the biggest issue if they will mediate and/or arbitrate disputes. You just need to be comfortable either having to go to Indiana in the event of a dispute and having Indiana law applied (which is the lesser burden as the laws are not that different).

2. That makes sense.

Obviously you will need to comfortable with everything; but these sound like reasonably compromised points.

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Customer reply replied 17 days ago
Thank you for the response and confirmations.
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