Limiting Implied Duties and Terms in Commercial Contracts: Key Cases and Strategies to Minimize Risk

Incorporation, Merger, Choice-of-Law, Sole Discretion, Good Faith and Fair Dealing, and Additional Exclusion Clauses

A live 90-minute CLE webinar with interactive Q&A


Thursday, October 10, 2019

1:00pm-2:30pm EDT, 10:00am-11:30am PDT

or call 1-800-926-7926

This CLE webinar will provide practical guidance in structuring contractual provisions to limit or negate the invisible terms implied in every commercial contract. The panel will discuss entire agreement, incorporation and merger clauses, provide practical guidance on enforceable additional provisions to effectively exclude implied terms, duties or pre-contractual representations, examine the relevant UCC and Restatement (Second) of Contracts approaches, and highlight recent cases interpreting these provisions to eliminate the problems associated with implied rules of law serving as traps for the unwary drafter.

Description

Many legal battles revolve around contract interpretation disputes. Business, contract, intellectual property, employment, and real estate litigation often result from poor drafting. Skilled and informed contract drafting is one of the essential tools available to savvy counsel.

A fundamental principle of contract interpretation is to ascertain and give effect to the parties' objectively expressed intent. But most federal and state jurisdictions accept that a court may incorporate laws and duties as implied terms in commercial contracts, even if they are unmentioned in the agreement. This implied incorporation creates a material risk of not only unexpected costs but also "trapping parties in surprise contractual obligations that they never intended." Arcadian Phosphates Inc. v. Arcadian Corp. (2d Cir. 1989).

Counsel must consider practical strategies for limiting or negating the invisible terms implied in every contract. Parties to a commercial agreement can significantly reduce the risk of misunderstandings and costly litigation by taking the time to make sure the contract is both unambiguous and complete. And a careful analysis of judicial decisions from varying jurisdictions provides strategic insights into tailored clauses and provisions that can effectively limit implied duties and terms.

Listen as our seasoned panel of attorneys provides their perspectives on mitigating the problems associated with implied rules of law serving as traps for the unwary drafter. The panel will discuss entire agreement, incorporation and merger clauses, offer practical guidance on additional enforceable provisions to exclude implied terms, duties or pre-contractual representations effectively, examine the UCC and Restatement (Second) of Contracts approaches, and highlight recent cases interpreting these provisions.

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Outline

  1. Overview
  2. Implied duties and contracts terms
  3. Restatement and UCC
  4. Caselaw
  5. Best practices and drafting strategies
  6. Case studies
  7. Conclusion

Benefits

The panel will review these and other key issues:

  • How can contract drafters subtly leverage the disfavored status of implied contract terms?
  • What are the most common implied duties and terms in commercial agreements?
  • What are the nuances of the implied incorporation doctrine?
  • What are the relevant UCC and Restatement (Second) of Contracts approaches?
  • How can a drafter avoid contractual incompleteness?
  • How have courts employed the conclusive presumption that every party knows the law?
  • What have courts said regarding implied contract terms and the "hypothetical bargain"?
  • Is the implied incorporation doctrine a rule of interpretation or construction?
  • What are best practices for limiting or negating invisible terms?
  • What are the critical evidentiary issues upon which courts often rely?
  • What roles do choice of law and conflict of laws play?
  • What are the critical lessons from cases that have limited or rejected the inclusion of implied duties and terms?
  • How can contract drafters exploit the line of federal cases that reject the implied incorporation doctrine?

Faculty

Gotaskie, John
John R. Gotaskie, Jr.

Partner
Fox Rothschild

Mr. Gotaskie represents individuals, partnerships and companies in diverse legal matters including complex commercial...  |  Read More

Hyman, Johanna
Johanna Hyman

Atty
Greenberg Traurig

Ms. Hyman focuses her practice on complex commercial disputes, with an emphasis on financial services and intellectual...  |  Read More

Krauss, Michael
Michael M. Krauss

Shareholder
Greenberg Traurig

Mr. Krauss, a former Assistant United States Attorney for the Southern District of New York, advises banks,...  |  Read More

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