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Practice Clauses |
If you indicate that a contract asks us to ensure that third parties abide by the terms of the agreement, the checklist will recommend the following:
Limit any requirement that we ensure adherence to contract terms by employees or third parties to taking reasonable steps to do so.
How would you implement this recommendation in the following paragraph?
2. Program License
2.1 Rights Granted
a. * * *
- b.
- University shall not copy or use the Programs (including the Documentation) except as otherwise specified in this Agreement or an Order Form. University shall have the right to allow faculty, students and staff to use the Programs for non-commercial academic use and educational purposes so long as University ensures that such use of the Programs is in accordance with the terms of this Agreement.
If you indicate that a contract contains a customer indemnification for use of data, the checklist will recommend the following:
Delete any requirement that Customer will indemnify the Vendor against harms that could result from Customer's use of data.
How would you implement the checklist recommendation in the following paragraph?
Customer agrees to indemnify and hold Licensor harmless from and against all claims of third parties arising out of or related to the use of the Product by Customer.
If you do not indicate that a contract contains a Vendor intellectual property indemnfication, the checklist will recommend the following:
In the absence of an infringement indemnity, add the following standard clause:
Vendor will defend, indemnify and hold Customer harmless from any action based on a claim that Customer's use of the Database in accordance with this agreement, infringes any patent, copyright, or trade secrets of any third party.
Review our sample contract. Where would you put the intellectual property infringement indemnification?
The next recommendation would be:
Now look through the agreement for a cap on damages that would limit the value of this indemnity. If damages are limited, for example, to the license fee for the software or database, edit the damages limitation clause to exclude claims of infringement (language to add is in boldface):
Except for claims involving intellectual property infringement as provided in Section (n), Vendor's total liability for damages under this agreement shall not exceed the license fee received by Vendor from Customer.
How would you edit the following clause to implement the checklist recommendation?
LIMITATION OF LIABILITY. LICENSOR SHALL NOT BE LIABLE FOR ANY INDIRECT, INCIDENTAL, SPECIAL OR CONSEQUENTIAL DAMAGES, OR DAMAGES FOR LOSS OF PROFITS, REVENUE, DATA OR DATA USE, INCURRED BY CUSTOMER OR ANY THIRD PARTY, WHETHER IN AN ACTION IN CONTRACT OR TORT, EVEN IF CUSTOMER OR ANY OTHER PERSON HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. LICENSOR'S LIABILITY FOR DAMAGES HEREUNDER SHALL IN NO EVENT EXCEED THE FEES PAID BY CUSTOMER FOR THIS LICENSE.
If you indicate that there is an indemnification the checklist would recommend the following:
If the indemnity is a long form of indemnity, look for a clause that gives the Vendor the right to assume control over the defense of any infringement claim. If you find such a clause, edit it to make clear that our Attorney General will have certain obligations to perform if the State is sued. Insert the language in boldface below:
Subject to the statutory duties of the Texas Attorney General,Vendor will control the defense of any claim (or however Vendor phrases its right to control)...
How would you edit the following clause to implement the checklist recommendation?
Infringement of Intellectual Property Rights. In the event of an intellectual property right claim, Licensor agrees to indemnify and hold Customer harmless provided Customer (i) gives Licensor prompt written notice of such claim, (ii) permits Licensor to defend or settle the claim and (iii) provides all reasonable assistance to Licensor in defending or settling the claim.
If you indicate that a contract clauses shortens the statute of limitations, the checklist will recommend the following:
Do not accept contractual limits on the time you have to bring suit - normal statute of limitation is four (4) years for contract disputes.
How would you edit the following clause to implement this recommendation?
No action, regardless of form, arising out of this Agreement may be brought by Institution/Licensee more than two years after the cause of action has arisen.
If you indicate that another state's law governs a contract, the checklist will recommend the following:
Change the governing law to Texas or delete the governing law clause.
Governing law clauses sometimes also addresses venue and jurisdiction. For example the clause may go on to state that the parties agree to submit to the jurisdiction of the courts of a particular county (in another state), or that venue will lie with those courts. If your clause addresses these issues and you are going to request that governing law be changed to Texas, delete the venue/jurisdiction part of the clause entirely.
How would you edit the following clause to implement this recommendation?
This Agreement and performance hereunder shall be governed by the laws of the State of Illinois, and each party agrees to submit to the jurisdiction and venue of the Circuit Court of Cook County, Illinois.
If you indicate that a contract contains a clause that allows the Vendor to terminate but does not allow the Customer to terminate, the checklist will recommend the following:
Add the following clause to give Customer appropriate termination rights:
If Vendor (a) breaches any term of this agreement, (b) terminates or suspends its business, (c) becomes subject to any bankruptcy or insolvency proceeding under any Federal or State statute, or (d) becomes insolvent or becomes subject to direct control by a trustee, receiver or similar authority, Customer may, in addition to its other legal rights and remedies, terminate this agreement on seven days' notice to Vendor.
How would you edit the following clause?
(a) Licensor may terminate this Agreement upon written notice if Customer fails to comply with any material term or condition of the Agreement and does not cure such noncompliance within five (5) days of receiving written notice of the breach. Licensor also reserves the right to terminate this Agreement at any time and for any or no reason by providing Customer written notice thereof, such termination to take place as of the date of Licensor's notice. In the event Licensor terminates this Agreement, other than as a result of Customer's breach hereof, Licensor shall refund to Customer a prorata portion of the license fees paid to Licensor for the unexpired portion of the then current term.
(b) Upon expiration or termination of this Agreement, all rights and licenses granted to Customer and its Authorized Users hereunder shall terminate effective immediately, and Customer shall purge, and shall require all persons using the Software to purge any and all portions of the Software. If requested by Licensor, Customer shall provide written confirmation of its compliance with the obligations set forth in this paragraph.
If you indicate that a contract provides for automatic renewal, the checklist will recommend the following:
Add the following clause to the agreement in order to require the Vendor to give Customer sufficient notice of changes so that Customer can take them into account before making the decision whether to renew the contract:
Vendor shall notify Customer of any changes in the terms of the agreement at least 30 days prior to the notice period for renewal, i.e., 60 days prior to the expiration of the then current term if the notice period is 30 days or 90 days prior to the expiration of the then current term if the notice period is 60 days.
How would you edit the following clause to implement the checklist recommendation?
4. License Renewal
University may renew the Programs licensed hereunder by notifying Sponsor in writing thirty days prior to the expiration of the Term and amending this Agreement for each additional, successive one-year term. Fees for such additional one-year terms shall be subject to Sponsor's policies in effect at the time of renewal.
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Software and Database License Review | It's
All in the Fine Print
Copyright in the Library: Acquisition Under Contract
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Intellectual Property Section | Office
of General Counsel
Comments to Intellectual Property
intellectualproperty@utsystem.edu
Last updated: November 8, 2001