the Zealous

14 May 23

In high stakes transactions in which vast sums of wealth are exchanged in return for ownership in ongoing complex businesses, mergers and acquisitions (M&A) contracts are an oft-overlooked source of clever legal craftsmanship. With so much value and risk embodied in these transactions, much compelling contract language that's produced in these deals is readily amenable for use in non-M&A contexts.

Glenn D. West, a prominent M&A lawyer and commentator whose insights reach well beyond the M&A context, has written extensively about the appropriate contract language to use in order to effectively disclaim the threat of fraud claims and avoid liability for extra-contractual statements. In two highly regarded pieces for the ABA Business Lawyer (regarding measures to avoid extra-contractual liability and fraud liability carveouts), Mr. West has proven an effective advocate for, inter alia, the following propositions:

29 Apr 23

George Remus emigrated from Germany to America with his family in 1882. By the age of 19, he became a certified pharmacist in Chicago, and by the age of 21, he had purchased his first pharmacy. At 24, after his purchase of yet another drugstore, George decided to quit the pharmacy business and instead pursue a career in law.

He attended what is now the DePaul University College of Law at night (in half the usual time) and was admitted to the Illinois Bar in 1904. He became an accomplished criminal defense lawyer. He pioneered the progenitor to the temporary insanity defense in a notorious murder case in 1914. By 1920, George was earning close to $500,000 a year, or nearly $7.5 million in today's dollars. But this was not enough for George.

By that time, the 18th Amendment to the US Constitution, and its implementing federal statute, the Volstead Act, banned the manufacture and sale of alcoholic beverages. George noticed that many of his clients were becoming wealthy by circumventing the law, despite their numerous brushes with it. He decided he could do bootlegging better.

24 Feb 23

Nearly all NDAs and confidentiality provisions exclude from the confidentiality and restricted use obligations information that is or becomes “public,” “publicly available,” or “publicly known.”

Contract drafting guru Ken Adams has given his imprimatur to the “is or becomes public” formulation. His preferred version of this exclusion is any information that is “already public when the Disclosing Party discloses it to the Recipient or becomes public (other than as a result of breach of this agreement by the Recipient) after the Disclosing Party discloses it to the Recipient.”

But is the “public” characterization the appropriate standard when it comes to the protection of trade secrets?