While much of OTT’s work deals with the review, protection, and management of the inventions made by our faculty, there is a whole other side that is of equal importance: negotiating contracts with industry, be it for licenses, clinical trials, collaborations, sponsored work, or confidential discussions. Just as the world of patents has its own set of jargon and terms, contracts do too. Below we’ve compiled a helpful list of some common terms you may encounter in contracts. You can find part 1 of this blog here.
Common Contract Terms & Concepts Continued
Representation: A fact that one party states with the knowledge that the other party is relying on that fact to make an agreement. If one makes a false representation, it can allow the other party to have the contract be voided or seen as a fraud in the inducement, meaning that an intentionally untrue fact was construed in the contract. For example we often represent that we have the ability to enter into the contract, or that to the best of our knowledge we are owner of a certain technology.
Warranty: A promise of the reliability of a given product or service. If a warranty is incorrect, the other party can deem it as fraudulent and claim breach of warranty and contract claim.
Disclaimer of Warranty: A provision that denies warranties that would otherwise be applicable to a given product or service. For example, in license agreements, Emory will often disclaim any warranty of merchantability.
Material Breach: A breach of a term or terms of the contract by one party substantial enough that it relieves the other party of their obligations to perform under that contract and provides grounds for termination of the agreement.
Waiver: Failure to exercise a right under an agreement that results in the loss of that right. Agreements will often have a waiver provision that says failure to exercise a right under the contract won’t preclude that party from exercising that right or any other right under the agreement.
Injunctive Relief: Remedies provided by a court of law that are not compensatory or punitive, for an example an injunction which is when a judge orders a party to do or not do something.
Other Jargon
“Including but not limited to or without limitation”: A phrase which signals to the court that a party is not trying to create a limited list of options, but that the list is meant to be expansive, and the list is only providing some common examples.
“Indemnify and hold harmless”: The terms indemnify and hold harmless are synonyms, however they are often both stated in contracts. These terms mean that one will have to pay any damages owed to or provide legal support for the other party if they are sued by a 3rd party.
“Good Faith”: Meaning both parties in a contract agree not to lie, give complete honesty, and act with no deception in contract discussion and formation. This is considered to be breached when a party uses clever word games, denies facts that are clearly understood between the two negotiating parties, or use other means to avoid delivering on their obligations under the terms of a contract.
“Incorporated by reference herein”: When a document and its terms are made a part of a contract without having to physically attach that document to the contract. With clinical trial agreements, the protocol is a part of the agreement but are typically lengthy at approximately 60 pages long, so they are incorporated in the agreement simply by reference rather than by including all 60 pages into the contract.