You are a technical product manager at Aviant Inc., a hypothetical Florida company that manufactures aircraft engines for commercial jets. Aviant would like to hire Inteq Corp., a hypothetical Virginia-based company, to develop improved fuel control components that Aviant can incorporate into its aircraft engines (allowing for greater fuel efficiency). The fees to be paid by Aviant to Inteq under the Agreement are approximately $250,000. Review the clauses included in the attached document from the draft Master Services Agreement that Inteq has provided to Aviant.
Add comment bubbles for each clause mentioned above and provide a brief explanation for your redline changes.please see the attached documents in order to finish this exercise. Also this link: https://lawshelf.com/videocoursesmoduleview/remedi…
Business Law for
Technical Professionals
Breach of Contract and Remedies
Overview
Breach of contract and an anticipatory breach of
contract
Remedies available for breach of contract
Key Clauses for Assignment (Part 2)
2
Breach and Anticipatory Breach
§ Definition of Breach
o Failure to act or perform in the manner called for by the contract
§ Anticipatory Breach
o Occurs when a party declares performance will not be made as required
§ A breach can be waived by the non-offending party (act or expression – often under
reservation of rights)
3
Remedies
§ Remedies Upon Anticipatory Breach
o Regard the contract as broken and bring a lawsuit without waiting for
performance
o Regard as an offer to cancel the contract which can be accepted or rejected
§ Remedies in General and the Measure of Damages
o Courts provide quasi-contractual remedies when a contract in unenforceable
o Measure of damages is based on the reasonable value of services
o Monetary damages/specific performance
o Injured party will be given the benefit of the bargain by the court
4
Remedies
§ Monetary Damages
o Compensatory damages compensate for damages incurred due to the breach
o Punitive Damages: exceed the actual loss and are imposed to punish the
defendant
• Punitive Damages are rarely awarded in contract actions
o Direct and Consequential Damages
• Direct damages naturally flow from the breach and include
• Consequential damages foreseeably occur because of the breach
o Mitigation of Damages: injured party has a duty to limit damages to the extend
possible
5
Remedies
§ Rescission
o Injured party may rescind upon a material breach
o Value of services rendered may be recovered
§ Action for Specific Performance
o Only if the subject matter of the contract is unique
§ Action for an Injunction
o Court order to refrain from or to do a specified act
§ Reformation of Contract by a Court
o Correct mistakes
6
Provisions Related to Remedies
§ Limitation of Remedies
o The contract may limit remedies available
§ Liquidated Damages
o Where it is difficult to determine damages (but cannot be punitive)
§ Attorneys’ Fees
o “American Rule” states each party responsible for own fees, but court has
discretion to award them
• Unless the parties agree to allocate the cost of litigation
7
Key Clauses For Assignment (Part 2)
§ Ownership of Work Product
o Customer should generally get ownership of the work product that is created for
customer
o Avoids ownership disputes
o Exceptions for pre-existing intellectual property of vendor
8
Key Contract Clauses (cont)
§ Indemnification
o Indemnification – protection from third party suits:
• Party A does something wrong and, because of that, Party B gets sued by
some third party.
• Indemnification clauses state that Party A pays expenses, losses (including
attorney’s fees), damages that Party B suffers as a result of that lawsuit.
o Typically requested:
• Intellectual property indemnification from service provider (e.g., suits by
patent or copyright owner)
• Indemnification for violations of applicable laws
• Indemnification for personal injury or property damage caused by service
provider during the performance of the services
9
Key Contract Clauses (cont)
§ Limitation of Liability
o Places limits on the potential liability one party has to another
o Should be mutual
o Common Limitations:
• disclaim liability for incidental and special/consequential damages
• liability cap tied to the value of the contract
§ The assignment this week requires you to mark up a few clauses of a contract. An
example, including how to “red-line” a document is provided in the video.
10
References
§ Cengage Learning, www.cengage.com
§ Twomey, D. P., Jennings, M. M., and Greene, S, M. (2022). Anderson’s business law
and the legal environment. Comprehensive edition (24th edition)
§ Sharron Alavi-Hantman
11
© The Johns Hopkins University 2021, All Rights Reserved.
Assignment 11 Contract Provisions
Business Law for Technical Professionals
Provisions from Master Services Agreement between technology services provider Inteq Corp.
(“Inteq”) and hypothetical aircraft engine manufacturer, Aviant Inc. (“Customer”).
Intellectual Property Rights. Customer understands and agrees that nothing contained in
this Agreement shall be construed as granting ownership rights to Customer of any Inteq Preexisting Intellectual Property. “Inteq Pre-existing Intellectual Property” shall mean materials or
work product created by Inteq prior to the effective date of this Agreement.
Indemnification. Inteq agrees to defend, indemnify, and hold harmless Customer from any
and all damages, costs, losses, expenses or other liability (including reasonable attorneys’
fees) in connection with claims brought by a third party and arising from Inteq’s violation of
applicable laws, rules, or regulations in performing the Services under this Agreement.
Limitation of Liability. IN NO EVENT WILL INTEQ BE LIABLE FOR ANY CONSEQUENTIAL,
INDIRECT, SPECIAL, OR INCIDENTAL DAMAGES, INCLUDING LOST PROFITS, ARISING FROM
OR RELATING TO THIS AGREEMENT. INTEQ’S TOTAL CUMULATIVE LIABILITY IN
CONNECTION WITH THIS AGREEMENT, WHETHER IN CONTRACT, TORT, OR OTHERWISE,
WILL NOT EXCEED $50,000, EVEN IF INTEQ HAS BE ADVISED OF THE POSSIBILITY OF SUCH
DAMAGES.
1
Assignment 11 Contract Provisions
Business Law for Technical Professionals
Provisions from Master Services Agreement between technology services provider Inteq Corp.
(“Inteq”) and hypothetical aircraft engine manufacturer, Aviant Inc. (“Customer”).
Intellectual Property Rights. Customer understands and agrees that nothing contained in
this Agreement shall be construed as granting ownership rights to Customer of any Inteq Preexisting Intellectual Property. “Inteq Pre-existing Intellectual Property” shall mean materials or
work product created by Inteq prior to the effective date of this Agreement.
Indemnification. Inteq agrees to defend, indemnify, and hold harmless Customer from any
and all damages, costs, losses, expenses or other liability (including reasonable attorneys’
fees) in connection with claims brought by a third party and arising from Inteq’s violation of
applicable laws, rules, or regulations in performing the Services under this Agreement.
Limitation of Liability. IN NO EVENT WILL INTEQ BE LIABLE FOR ANY CONSEQUENTIAL,
INDIRECT, SPECIAL, OR INCIDENTAL DAMAGES, INCLUDING LOST PROFITS, ARISING FROM
OR RELATING TO THIS AGREEMENT. INTEQ’S TOTAL CUMULATIVE LIABILITY IN
CONNECTION WITH THIS AGREEMENT, WHETHER IN CONTRACT, TORT, OR OTHERWISE,
WILL NOT EXCEED $50,000, EVEN IF INTEQ HAS BE ADVISED OF THE POSSIBILITY OF SUCH
DAMAGES.
1
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