Drafting Game Rules to Minimize Litigation

Drafting Game Rules to Minimize Litigation

Litigation & Corporate Counsel

Asia Summit 2013

Make the Rules

Endless Cycle of Litigation

Drafting Contracts

Voltaire

Spider-Man

Opportunity to Make the Rules

Transactional Work

Sometimes Transactions Collapse

Drafting Game Rules

Dispute Resolution

Missing the Bigger Picture

Redirect the Dispute

Already have a Dispute

If the parties have a dispute that they are unable to resolve themselves....

- Typical Arbitration Clause

Business Resolution Already Failed

Parties are Already Taking Positions

Contract Roadmap

Rules of Engagement

Opportunity to Draft the Game Rules

Back to Basics

Back to Law School

Essential Legal Terms

1. Parties 2. Subject 3. Time 4. Price

Contracting Parties

Contract Subject Matter

Time for Performance

Contract Price


Not Abstract Legal Concepts

Underlying Business Deal

Law Students’ Point of View

Lawyers’ Point of View

Lawyers have Super-Powers

Anahad O’Connor, Cracking Under the Pressure? It's Just the Opposite for Some

September 10, 2004, The New York Times

In studies, researchers have found that perhaps the only time pessimists thrive is when they become lawyers... If you're drawing up a contract, the ability to see every foreseeable danger is something that goes along with pessimism...

Business Risk

Extract Value from the Contract

Disrupt Ability to Extract Value


Party Risks Solvency Competency Performance

Subject Matter Risks Meet Requirements Perform as Expected Conform to Specifications Intellectual Property Rights

Time Risks Late Delivery Late Payment Early Termination

Price Risks Inflation Best Price Value for Money Unamortized Costs Currency Fluctuation

Business Risk

Legal Risk

Legal Risk

Legal Risks are Business Risk

Disrupt Ability to Extract Value

Risk Mitigation

Path to Resolution

Procedures to Divert

Business Resolution Before Dispute


Party Risk Mitigation Quarterly Business Reviews Financial Analysis Key-Personnel Retention

Subject Matter Risk Mitigation Representations and Warranties Service Level Agreement Model Acceptance Testing Qualification

Time Risk Mitigation Service Level Agreement Model Late Delivery Consequences Early Termination Schedule Take-Or-Pay Liquidated Damages

Price Risk Mitigation Service Level Agreement Model Early Termination Costs Quarterly Price Review Competitive Sourcing Best Price Guarantee

Path to Resolve Disputes

Procedures to Divert Disputes

Business Resolution Before Dispute

Choosing Your Battle Lines

Entrenched Positions

Keep Them Playing at the Table

Keep Everyone Playing Peacefully

Write Your Own Rules

Drafting Game Rules to Minimize Litigation

Litigation & Corporate Counsel

Asia Summit 2013

About the Author Eric Pesik is the Associate General Counsel and Compliance Officer at Seagate Singapore International Headquarters Pte Ltd. This work represents the opinions of the author alone, and not the opinion his employer. http://www.linkedin.com/in/ericpesik/ Image Acknowledgments All of the images used in this work are the property of their respective owners. All image sources are acknowledged in the pages that follow. If you wish to reuse any of the images from in this presentation, you must obtain the original image from the original source and comply with any licensing restrictions. Creative Commons Attribution License Except for the images used in this presentation, you are free to share, copy, distribute, and transmit this work; to remix or adapt this work; and to make commercial use of this work, under the condition that you must attribute this work to the author (but not in any way that suggests that he endorses you or your use of this work). http://creativecommons.org/licenses/by/3.0/ Copyright © 2013 Eric Pesik

Monopoly by Mike Fleming Flickr Creative Commons Attribution License http://www.flickr.com/photos/flem007_uk/3168012226/

Arcade Rules by David Goehring Flickr Creative Commons Attribution License http://www.flickr.com/photos/carbonnyc/269389847/

Motor Racing Board Game by Puuikibeach Flickr Creative Commons Attribution License http://www.flickr.com/photos/puuikibeach/6913255742/

Harrington Signing Contract by Cushing Memorial Library and Archives Texas A+M Flickr Creative Commons Attribution License http://www.flickr.com/photos/cushinglibrary/3738556077/

Atelier de Nicolas de Largillière, portrait de Voltaire Wikimedia Commons http://commons.wikimedia.org/wiki/File:Atelier_de_Nicolas_de_Largilli%C3%A8re,_portrait_de_Voltaire,_d%C3%A9tail_(mus%C3%A9e_Carnavalet)_-002.jpg

2006 Spider-Man Ornament by JD Hancock Flickr Creative Commons Attribution License http://www.flickr.com/photos/jdhancock/4234966590/

Monopoly by John-Morgan Flickr Creative Commons Attribution License http://www.flickr.com/photos/aidanmorgan/5588594181/

Business people in a meeting by Victor 1558 Flickr Creative Commons Attribution License http://www.flickr.com/photos/76029035@N02/6829506735/

Board game time with Josh and Spenser by Chelsea Hicks Flickr Creative Commons Attribution License http://www.flickr.com/photos/seafaringwoman/7183600123/

Monopoly by Jeramey Jannene Flickr Creative Commons Attribution License http://www.flickr.com/photos/compujeramey/22023732/

Meeting by Voka Kamer van Koophandel Limburg Flickr Creative Commons Attribution License http://www.flickr.com/photos/vokakvklim/4522913512/

James, I think your cover's blown! by Ludovic Bertron Flickr Creative Commons Attribution License http://www.flickr.com/photos/23912576@N05/2962194797/

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Axis and Allies by James Lee Flickr Creative Commons Attribution License http://www.flickr.com/photos/jronaldlee/6413610641/

Typical Arbitration Clause In contracts everywhere

Meeting by Voka Kamer van Koophandel Limburg Flickr Creative Commons Attribution License http://www.flickr.com/photos/vokakvklim/4522283313/

Placing the go stone by Luis de Bethencourt Flickr Creative Commons Attribution License http://www.flickr.com/photos/luisbg/2094497611/

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Risk by Bien Stephenson Flickr Creative Commons Attribution License http://www.flickr.com/photos/benstephenson/27298596/

Monopoly by Jeramey Jannene Flickr Creative Commons Attribution License http://www.flickr.com/photos/compujeramey/22023732/

Case Briefing by David Ortez Flickr Creative Commons Attribution License http://www.flickr.com/photos/davidortez/5350562485/

Classroom by velkr0 Flickr Creative Commons Attribution License http://www.flickr.com/photos/velkr0/3472576304/

Contract for 1000 per week by Casey Konstantin Flickr Creative Commons Attribution License http://www.flickr.com/photos/sercasey/503706091/

Candyland by John-Morgan Flickr Creative Commons Attribution License http://www.flickr.com/photos/aidanmorgan/5589183352/

Life by Wil Folsom Flickr Creative Comons http://www.flickr.com/photos/willfolsom/5134869124/

The Hour by BigBirdz Flickr Creative Commons Attribution License http://www.flickr.com/photos/bigbirdz/4352531157/

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De literarum obligationibus (Of the obligation litteris) by Yale Law Library Flickr Creative Commons Attribution License http://www.flickr.com/photos/yalelawlibrary/5495035219/

Contract for 1000 per week by Casey Konstantin Flickr Creative Commons Attribution License http://www.flickr.com/photos/sercasey/503706091/

Classroom by velkr0 Flickr Creative Commons Attribution License http://www.flickr.com/photos/velkr0/3472576304/

Confident businesspeople by Victor 1558 Flickr Creative Commons Attribution License http://www.flickr.com/photos/76029035@N02/6829325255/

2006 Spider-Man Ornament by JD Hancock Flickr Creative Commons Attribution License http://www.flickr.com/photos/jdhancock/4234966590/

Cracking Under the Pressure? It's Just the Opposite for Some by Anahad O’Connor September 10, 2004, The New York Times http://www.nytimes.com/2004/09/10/health/10stress.html?pagewanted=all&_r=0

Craps Dice Advertise Tylenol with Codeine by Woodleywonderworks Flickr Creative Commons Attribution License http://www.flickr.com/photos/wlwworks/4238080094/

The Godfather directed by Francis Ford Coppola 1972 Paramount Pictures Offical Website http://www.thegodfather.com/

Houses on Coins by Images of Money Flickr Creative Commons Attribution License http://www.flickr.com/photos/59937401@N07/5474806608/

House on Fire by Images of Money Flickr Creative Commons Attribution License http://www.flickr.com/photos/59937401@N07/5857234643/




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Monopoly Money by John-Morgan Flickr Creative Commons Attribution License http://www.flickr.com/photos/aidanmorgan/5589184944/

Office.com and Office Web App Media Elements Used with permission from Microsoft http://office.microsoft.com/en-001/images/results.aspx?qu=MP900178584&ex=1#ai:MP900178584|

Office.com and Office Web App Media Elements Used with permission from Microsoft http://office.microsoft.com/en-001/images/results.aspx?qu=MP900178584&ex=1#ai:MP900178584|

Monopoly Time by Dustin Askins Flickr Creative Commons Attribution License http://www.flickr.com/photos/dustinaskins/1401246474/

House on Fire by Images of Money Flickr Creative Commons Attribution License http://www.flickr.com/photos/59937401@N07/5857234643/


Magically Shift the Maze to Reach Your Goal by David Goehring Flickr Creative Commons Attribution License http://www.flickr.com/photos/carbonnyc/1392828721/

Chutes and Ladders by Ben Husmann Flickr Creative Commons Attribution License http://www.flickr.com/photos/benhusmann/3120095949/

40+118 POW!! by Bark Flickr Creative Commons Attribution License http://www.flickr.com/photos/barkbud/4385145755/




Magically Shift the Maze to Reach Your Goal by David Goehring Flickr Creative Commons Attribution License http://www.flickr.com/photos/carbonnyc/1392828721/

Chutes and Ladders by Ben Husmann Flickr Creative Commons Attribution License http://www.flickr.com/photos/benhusmann/3120095949/

40+118 POW!! by Bark Flickr Creative Commons Attribution License http://www.flickr.com/photos/barkbud/4385145755/

Axis n Allies Aircraft Carrier by Ivan Salas Flickr Creative Commons Attribution License http://www.flickr.com/photos/skalasinc/356614149/


Space Marines by Himitsu Monban Flickr Creative Commons Attribution License http://www.flickr.com/photos/monban/3422589888/

The Game of Life by Djprybyl kathryn Flickr Creative Commons Attribution License http://www.flickr.com/photos/prybylphotos/2397671520/

Scrabble by Betsssssy Flickr Creative Commons Attribution License http://www.flickr.com/photos/betsssssy/628133114/

Harrington Signing Contract by Cushing Memorial Library and Archives Texas A+M Flickr Creative Commons Attribution License http://www.flickr.com/photos/cushinglibrary/3738556077/

Monopoly by Mike Fleming Flickr Creative Commons Attribution License http://www.flickr.com/photos/flem007_uk/3168012226/