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Business Contracts

Cover Two?

Arbitration clauses are common in corporate agreements, but can an employee invoke her company's arbitration clause in a contract with a plaintiff to compel arbitration? In a recent decision, the First Circuit held a defendant employee could do just, calling the plaintiff's arguments to the contrary "illogical and impractical." Grand Wireless, Inc. v. Verizon Wireless, Inc., No. 13-1149, 2014 WL 1054418 at *9 (1st Cir., Mar. 19, 2014).

It's a bird! It's a plane! It's a contract!

Following an appellate mandate, a federal judge in California granted summary judgment to Warner Bros. in late March, all but ending almost a decade of copyright litigation between the entertainment conglomerate and Laura Siegel Larson, heir of Superman co-creator Jerry Siegel. See Larson v. Warner Bros. Entm't, Inc., 2013 WL 1164434 at * 9 (C.D. Cal. March 20, 2013). In a counterclaim, Warner Bros. sought (and was granted) a declaratory judgment that an October 2001 letter from Larson's then-attorney to Warner Bros.'s then-general counsel constituted a binding contract regarding the rights to the Man of Steel, even though subsequent negotiations to formalize the agreement fell apart. In January, the Ninth Circuit considered the letter kryptonite to Larson's claims under California law because it "constituted an acceptance of terms negotiated between the parties," specifically and accurately reflecting "the material terms [counsel for both parties] had orally agreed to" during a conversation three days earlier, in which they "had resolved the last outstanding point in the deal" following "years of negotiations." See Larson v. Warner Bros. Entm't, Inc., --- F.App'x. ---, 2013 WL 1113259 at *1 (9th Cir. 2013).

Instagram's New Terms of Service Anger Users

Social media users are fuming over changes in the popular photo-sharing and social networking website Instagram's Terms of Service.  The most talked-about change appears to give Instagram the right to sell users' photographs to third parties for use in advertisements: "...You agree that a business or other entity may pay us to display your username, likeness, photos..., and/or actions you take, in connection with paid or sponsored content or promotions, without any compensation to you."  The backlash against that clause has been severe, but it isn't the only change Instagram made to its TOS.  Beginning January 16, 2013, Instagram users will be obligated to arbitrate most disputes they have with the company and to waive rights to participate in a class action lawsuit or class-wide arbitration against Instagram, unless they opt-out of the arbitration clause in writing.

Read (and Draft) That Forum Selection Clause Carefully!

The Massachusetts Appeals Court has ruled that a party to a business contract could file suit in Massachusetts even though the contract specified that "jurisdiction shall vest in the State of Illinois."  The Appeals Court held that the "jurisdiction shall vest" language is merely permissive and does not require that suit between the contracting parties be brought in Illinois. Boland v. George S. May International Company, No. 11-P-1300, slip op. (Mass.App.Ct. June 7, 2012).  

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