Key Considerations When Negotiating Technology Contracts with US Companies
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For English law lawyers negotiating with US technology companies, understanding key differences in contract law and interpretation between jurisdictions is crucial for effective representation.
Interpretation and Construction
US contracts, particularly from California tech companies, often differ from English contracts in several ways:
More extensive definitions sections
Greater use of examples and illustrations
Less reliance on implied terms
Different approaches to contra proferentem
Broader interpretation of "reasonable" efforts clauses
More detailed force majeure provisions
Indemnification Clauses
US indemnities typically:
Have broader scope than English equivalents
May cover first-party and third-party losses
Often include defense obligations
May extend to consequential losses
Frequently include duty to defend provisions
May trigger immediate payment obligations
Liability and Damages
Key differences include:
US courts more readily award punitive damages
Different approaches to consequential loss exclusions
Varying interpretations of limitation of liability clauses
US tendency toward higher damage awards
Different treatment of liquidated damages
Governing Law and Jurisdiction
Critical considerations include:
California's tendency to enforce its own law
Impact of California public policy on choice of law
Mandatory local law application for certain provisions
Enforcement challenges across jurisdictions
Recognition of foreign judgments
Alternative dispute resolution preferences
Local Law Compliance
Be aware of:
California's strict data privacy regulations
Technology export control requirements
Employment law implications
Consumer protection regulations
Intellectual property differences
Competition law variations
Practical Considerations
Consider including:
Clear governing law and jurisdiction clauses
Specific definitions of key terms
Express survival clauses
Detailed dispute resolution procedures
Compliance with local regulatory requirements
Cross-border enforcement mechanisms
Understanding these differences enables English lawyers to negotiate more effectively and draft agreements that protect their clients' interests while remaining enforceable across jurisdictions. Seek local counsel input for specific requirements or complex transactions.
