A recent Seventh-Circuit case should serve as a cautionary tale that business owners need to consider the requirements of applicable insurance policies when trying to resolve a quality issue with a customer.
When Arbor Homes LLC’s plumbing contractor, Willmez Plumbing Inc., made a major mistake, Arbor worked with its customers, the Lorches, to make them whole. Unfortunately for Arbor, it didn’t comply with the requirements of the plumber’s commercial general liability insurance policy with West Bend Mutual Insurance Co. — under which Arbor was an additional insured — which allowed West Bend to successfully deny the claim.
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In his lesser-known recent opinion in which ostriches make an appearance, Judge Richard Posner of the U.S. Seventh Circuit Court of Appeals considered whether a memorandum of understanding and a letter of intent formed binding contracts. As you might have guessed from this post’s title—which is a quote from the opinion—the answer was no.
(In his better-known ostrich opinion, Judge Posner benchslapped one of the lawyers arguing before the court for disregarding precedent that was detrimental to his case. The opinion, in which Judge Posner compares the lawyer to an ostrich with his head in the sand, is complete with pictures. See this post at Above the Law for the picture of man in suit with head in sand.) [click to continue…]
Every once in a while I read a court’s opinion and want to know the back story. That’s how I feel about last month’s Seventh Circuit decision in Digitech Computer v. Trans-Care.
Here’s a short version of the business story from the Southern District of Indiana’s three separate opinions and the Seventh Circuit’s opinion. Trans-Care personnel met representatives of Digitech at a trade show. Wanting to win Trans-Care’s business away from a competitor, Digitech later persuaded Trans-Care to negotiate for the purchase of Digitech’s software by offering a 90-day “satisfaction guarantee,” which was unusual for the software company. [click to continue…]
If you’ve ever negotiated a contract, you know what I’m talking about. Most of the important deal terms have been agreed to. Both parties—as well as their lawyers—are eager to wrap up negotiations. But there’s a sticking point that won’t be a big deal until months, or even years, down the road. So why not put off making a tough call and agree to make the decision later?
Denil v. deBoer, Inc.
The U.S. Seventh Circuit Court of Appeals decided a case earlier this month where the parties decided to put off making difficult choices in contract negotiations. [click to continue…]