Portland attorney Joe Durkee offers advice on how to read standard business contracts. He discusses a number of clauses common to vendor service agreements and offered counsel on how to approach them.

1. Let’s Shake on It
Contracts in the Market Research World
Joe Durkee, Esq.

2. PACTA SUNT SERVANDA

4. BAD
RESEARCH
Client Risk
Bad Strategic
Decisions

6. I cant get it out of my
head!

7. • Lack of clarity and anything
hidden
• Anything complicated
• Others’ greed
• Competition in its own
territory

9. Anything that helps survival
Openness
Simplicity
Its’ own greed

10. • Things that hurt or scared us • Things that made you feel safe
when young when young
• Immobility • Mobility (ability to do what
• Confinement you want when you want)
• Arrogance • Itself (being alive)
• Cruelty • Feeling important (your own
• Loneliness power)
• Liars • Altruism (a better safer
community)
• Hypocrisy
• Gratitude
• A smile without eyes
• Sychophants

12. Our Social Contract

13. Individual Freedoms

14. Scarcity of resource (money, water, safety...)
Motivation for competition for the resource
Belief that social interaction and cooperation =
potential for gain

15. Let’s Make a Deal
vs

16. Clauses To Pay Attention To
Clause and Effect

17. Attorney Fees Clause
“In the event of litigation relating to the
subject matter of this Agreement, the non-
prevailing party shall reimburse the prevailing
party for all reasonable attorney fees and
costs resulting therefrom.”

18. Attorney Fees Clause
Effect: In the event of litigation, the loser reimburses the
prevailing party's attorney fees.
Take Away: You can end up paying your own attorney and
the other attorneys fees as well as the judgment and
usually costs!
Fees usually must be reasonable as determined by the
Court.

19. Choice of Law and Forum Clause
“This agreement shall be interpreted under the
laws of the State of Bliss. Any litigation under
this agreement shall be resolved in the trial
courts of Harmony town, State of Bliss.”

20. Choice of Law and Forum Clause
Effect:
• Contracts to be interpreted under the laws of a particular
state or jurisdiction
• Any litigation will occur within a specified jurisdiction
Take Away: It costs a lot to:
-travel to other states
-pay for meals and housing
Working with attorneys from other jurisdictions can cause
effort coordination and communication issues.

21. Merger and Integration Clause
“This Agreement and the exhibits attached hereto
contain the entire agreement of the parties with
respect to the subject matter of this Agreement,
and supersede all prior negotiations, agreements
and understandings with respect thereto. This
Agreement may only be amended by a written
document duly executed by all parties.”

22. Merger and Integration Clause
Effect: Prevents the parties to a contract from later
claiming that the contract:
• does not reflect their entire understanding
• was changed by a subsequent oral agreement
• is not consistent with prior agreements
Take Away: Make sure that all promises and agreements
are actually included in the written contract. It may be
impossible to enforce those unwritten promises.

23. Indemnity Clause
“X company agrees to indemnify and hold
harmless Y company against loss or threatened
loss or expense by reason of the liability or
potential liability of X company for or arising out
of any claims for damages.”

24. Indemnity Clause
Effect: An indemnity clause requires that one party pay
the other, in the event that certain expenses are incurred.
Take Away: This clause, like the attorney fee clause can
significantly increase your exposure in the extent of an
unexpected event or breach of the contract.

25. Time of Performance Clause
“Time is of the essence for the completion of
the work described in this contract. It is
anticipated by the parties that all work
described herein will be completed within two
(2) weeks of the date of execution, and that any
delay in the completion of the work described
herein shall constitute a material breach of this
contract.”

26. Time of Performance Clause
Effect: Failure to complete the agreed upon terms in the
Agreement can result in a breach of contract claim.
Take Aways:
• Make sure the time can be completed within the specified
window
• Have other clauses that excuses untimely performance such as
Acts of God, War, Disruption in supply chain etc…
• If time is not of the essence, consider having a clause that states
as such, “The parties agree that time is not of the essence in the
completion of the work described in this contract. All parties
shall act to complete the work described within a reasonable
time.”

27. Arbitration Clause
“All disputes, controversies, or claims arising out
of or relating to this contract shall be submitted
binding arbitration in accordance with the
applicable rules of the American Arbitration
Association then in effect.”

28. Arbitration Clause
Effect: Has the potential to take away the right to a
jury trial and appellate rights a person normally has.
Take Aways:
• Litigation is always expensive and takes a long time
• Arbitration can be much less expensive and move
much more quickly
• Trial is very formal whereas arbitrations can be less
so
• A well written arbitration clause is worth considering

29. Savings (Severability) Clause
“If any provision of this Contract is held
unenforceable, then such provision, if
allowable, will be modified to reflect the
parties' intention. All remaining provisions of
this Contract shall remain in full force and
effect.”

30. Savings (Severability) Clause
Effect: Meant to ensure that the contract remains
enforceable even if part of the contract is later held
invalid.
Take Away:
• In the absence of a savings clause, it is possible that if a
single clause is held invalid, the entire contract will also
be rendered invalid
• Don’t think you are going to get out of your contractual
obligations just because one clause is held invalid

31. Non-Waiver Clause
“The failure by one party to require
performance of any provision of this
Agreement shall not affect that party's right
to require performance at any time
thereafter, nor shall a waiver of any breach
or default of this Contract constitute a
waiver of any subsequent breach or default
or a waiver of the provision itself.”

32. Non-Waiver Clause
Effect: Meant to prevent a party from saying that
they were allowed to breach a certain provision in
the contract in the past so they should be allowed to
do it forever more
Take Away:
• This clause allows some flexibility in party behavior
• Allows for a breach of a provision without losing
the rights under that provision

33. Service Agreement Exclusion Clause
Effect: Tells the Client what they are NOT to expect
under the Agreement
Take Away:
While the Integration Clause states that the
Agreement represents the total understanding of the
parties, it is always prudent to make clear what you
will NOT be doing so the Client cannot say “but you
said you would do that”

34. Selecting Counsel
• Interview as Many as It Takes!
• Counsel You Like
• Shared Values
• Communicate Well With (both ways)
• Multiple Recommendations
• Reputation in the Community
• Don’t Blindly rely on-
• Member of X, Y or Z Association
• Ratings
• “Super Lawyer” Status

35. Billing
• Get a bid
• Flat fee an option?
• Value based billing an option?
• Blended billing an option?
• Understand completely how you are going to be
billed!
• Lawyer willing to reduce bill if request is
reasonable?
• Always scrutinize the bill!

36. Branding

37. It’s a Wrap