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Basic contract provisions are outlined below for contracts created between IEEE and other parties.

 

Term and Termination

The term specifies the period of time during which an agreement is binding.  Suppliers agreements often specify an initial term followed by automatic renewal unless either party gives notice of termination prior to expiration of the then-current term.  IEEE should avoid such automatic renewal provisions, because it is difficult to keep track of the deadlines by which notices of termination must be given and renewal of an agreement can be easily accomplished through the written consent of both parties.

The termination provision governs circumstances under which an agreement may be terminated.  At a minimum, the agreement should permit termination by IEEE upon the following conditions:

1.    A material breach by the vendor that remains uncured thirty (30) days after notice of breach from IEEE; and

2.    Immediately upon the bankruptcy/insolvency of the vendor.

If the services at issue are on-demand in nature (e.g., printing services) and not project-oriented (e.g., development of IT infrastructure), then it would also be advisable for the agreement to allow termination by IEEE for any reason upon reasonable notice to the vendor.

 
 

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Warranty

A warranty is a specific assurance from a party to an agreement that certain representations it has made are or will be true.  The key warranties that a vendor should make in an agreement for goods or services are:

1.    All of the services to be performed by the vendor will be rendered using sound, professional practices in a competent manner by knowledgeable, trained and qualified professionals; and

2.    All services and deliverables provided under the agreement will materially conform to the specifications set forth in the applicable statement of work or comparable document and shall not violate the copyright, patent, trademark, trade secret or other right of any third party.

 
 

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Indemnification

An indemnification is a promise by a party to defend against claims that may arise from that party’s wrongdoing.  When IEEE procures goods or services, the vendor should agree to indemnify IEEE against third-party claims based upon the following:

1.    Infringement of the intellectual property rights (copyright, patent, trademark or trade secret) of a third party attributable to the goods or services provided by the vendor;

2.    Negligence or willful misconduct by the vendor; and

3.    Breach of the vendor’s representations or warranties under the agreement.

Some vendors may require IEEE to grant a reciprocal set of indemnifications. In most cases, it would be acceptable for IEEE to grant such indemnifications, provided that they are no broader in scope than those granted by the vendor.

 
 

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Intellectual Property

In general, intellectual property consists of copyrights, patents, trademarks and trade secrets.  Copyright protects literary, artistic and musical works, as well as other creative works such as architectural designs and computer software.  A patent is a property right given by the government to an inventor to exclude others from making, using, offering for sale or selling that inventor’s invention.  Trademarks, often referred to as brand names, distinguish one company’s goods and services from those of others, thereby letting consumers know that those goods and services come from a particular source.  A trade secret is information that is important to a party’s business that has value because it is not known by the general public (e.g., customer lists, business plans, data analyses, technical procedures).

Agreements with vendors should include the following provisions concerning intellectual property rights:

1.    IEEE retains all rights to its pre-existing intellectual property and any intellectual property it creates in connection with the agreement; and

2.    The vendor assigns to IEEE all rights in any work product developed pursuant to the agreement and acknowledges that all materials created by the vendor pursuant to the agreement shall be deemed “works for hire” under the United States Copyright Act.  If the vendor will not agree to an assignment, then the vendor should, at a minimum, grant IEEE a perpetual, irrevocable, worldwide, royalty-free license to use the work product developed pursuant to the agreement.

Any provision in an agreement that grants a party rights to IEEE intellectual property should be reviewed by Procurement and/or IEEE counsel because any assignment or licensing of IEEE’s proprietary rights must be carefully assessed.

 
 

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Publicity

Vendors will often seek permission to use IEEE’s name, trademark or logo to communicate to the public that IEEE is a customer of the vendor.  If a vendor requests such permission, it is important that no use of IEEE’s name, trademark or logo be made without IEEE’s express written consent, and IEEE should review all requests to ensure that use of IEEE’s name, trademark or logo will be consistent with IEEE’s policies and objectives.  A vendor must not be given free reign to use IEEE’s name, trademark or logo, particularly in connection with efforts that may suggest to the public that IEEE endorses or otherwise approves of the vendor’s goods or services.

If there is a need for IEEE to use a vendor’s name, trademark or logo, IEEE should obtain that permission expressly within the agreement.

 
 

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Confidential Information

The confidentiality provision of an agreement defines what information disclosed by the parties will be regarded as confidential, and it further specifies the conditions upon which such confidential information may be used or disclosed by the recipient.  To the extent that IEEE will disclose any confidential information (e.g., customer lists, business plans, data analyses, technical procedures) under an agreement, the confidentiality provision should clearly define such information as “confidential information” bound by the conditions restricting use and disclosure set forth in the provision.  IEEE should also ensure that any such information is clearly marked with a “Confidential” or “Proprietary” notation prior to disclosure.

 
 

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Choice of Law and Venue

The choice of law provision determines which jurisdiction’s laws will be applied in interpreting an agreement (e.g., in the event of a legal dispute between the parties).  The venue provision determines the location where any lawsuit relating the agreement must be brought.

As an initial matter, IEEE should press for the following:

Choice of Law: the laws of the State of New York

Venue: a court of competent jurisdiction in the County and State of New York

If the vendor will not agree to accept the foregoing, then the following are acceptable alternatives, in decreasing order of preference:

Alternative #1

Choice of Law: the laws of the State of New York

Venue: a court of competent jurisdiction in the County and State of New York if the claim is brought by the vendor, and a court of competent jurisdiction in the County and State where the vendor is located if the claim is brought by IEEE

Alternative #2

Choice of Law: the laws of the State of New York

Venue: remain silent

Alternative #3

Choice of Law: remain silent

Venue: remain silent

 
 

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Force Majeure

A force majeure provision excuses either party in an agreement from fulfilling its contractual obligations when an extraordinary event or circumstance out of its reasonable control prevents performance.  Such circumstances may include natural disasters (e.g., flood, earthquake), governmental restrictions, war, fire or other casualty.  All services agreements should include a force majeure provision.

 
 

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