We have contracts all over. You buy a car, you have a contract. You rent a property, you have a contract. You buy a house, you have a contract. Our lives are filled with contracts, and most of us probably don’t read them word for word. However, to put it simply: Read the Contracts!
In this episode, Host, Jean Lawler–commercial + insurance mediator and arbitrator–discusses four examples of conditions in contracts that can become impediments to rights if not complied with.
To read the full episode transcript please see the Podcast Website.
Case Mentioned:
Santa Clara Valley Water District v. Century Indemnity Company, 2023 DJ DAR 2729
About the Host:
Based in Los Angeles, CA, Jean Lawler is an attorney and mediator, focusing on commercial, insurance and civil litigation matters pending at the trial and appellate levels - wherever filed. She regularly mediates a wide variety of insurance, business, and tort matters, as well as federal ADA accessibility lawsuits re architectural barriers and websites. CIPP/US (Certified Information Privacy Professional) certified, Jean also mediates matters involving data breaches, ransomware, and cyber losses. She has mediated hundreds upon hundreds - thousands - of cases over the years with a myriad of issues. For a more detailed sampling of the types of mediations that she has conducted and participated in, both when in practice and as a full-time mediator, please refer to her web page detailing Representative Matters.
Prior to becoming a full-time mediator in 2017, Jean was a Senior Partner in a Los Angeles based litigation firm, representing corporations, professionals, non-profits, individuals, and insurers in a broad range of matters, at trial and on appeal - mediating hundreds upon hundreds of cases over the years. Her legal experience has been diverse and international, and she has a deep knowledge of the insurance industry, insurance policies and the various risks they insure against (primary, excess, reinsurance, program, surplus lines, London Market, and international insurers). She also served as a Managing Partner of her former law firm, at times chairing the firm’s Insurance Law, Cyber & Privacy Law, International Law, and Business & Real Estate Transactions practice groups and, ultimately, served her many clients as counselor and trusted advisor.
As she would tell you if asked: “I absolutely love what I do! I would be honored to serve as your Mediator or Arbitrator.”
Connect with Jean:
Thanks for listening to the podcast! Want more?
LinkedIn
Website
YouTube Channel
Follow the podcast:
Available on Apple Podcasts, Spotify, Google Podcasts, and more!
Thank you for reading this transcript of the ROADS TO Resolution ~Closure ~Certainty Podcast for the episode entitled, “Have You Read The Conditions In Your Contracts?”. To improve readability, this clean verbatim transcript also includes additional headings (not part of the audio). The transcript is human generated, so there may be minor errors. Thanks for your time!
[intro music]
Hi, I’m Jean Lawler, I’m your host of the ROADS TO Resolution ~Closure ~Certainty Podcast, and as always, it's great to be here with you today. So, today, I wanted to talk about contracts, and terms in the contracts that can become an impediment to rights that you would otherwise have under a contract if you don’t comply with conditions, etc.
So, simply put: Read the Contracts.
Read them all. Whether it's a lease, a rental agreement, a business agreement, perhaps an insurance policy, an employment contract. We have contracts all over. You buy a car, you have a contract. You have your car repaired, you have a contract. You rent a property, you have a contract. You buy a house, you have a contract. Our lives are filled with contracts, and most of us probably don’t read them word for word, especially the fine print in all of them, but there are times, if you have disputes, that you absolutely should read them. Even I guess, as a lawyer, I should say, you should read them before you sign them, of course. But whether you have or not, definitely take another look at them before you initiate any sort of legal activity, because there could well be terms in those contracts–whatever they are–that would mean that you don’t have certain rights, or that you could end up waiving some of your rights.
So, let’s talk a few examples.
Example #1: Mediation before Lawsuit or Arbitration
One that came to me because of a mediation that I had this morning is…In certain contracts, and I think it's becoming more common, there is a requirement that mediation must be conducted before a party initiates a lawsuit or files for arbitration, and the consequence if you don’t, I mean it all depends on the contract, of course…But one of the things from this morning and that I’ve seen in some prior mediations–where a pre-suit mediation was going on for this particular reason–was that then there may be no right to collect attorney fees if you would have otherwise maybe had that right, but didn’t take the opportunity to participate in a mediation before you went into litigation or arbitration. Or even if one was initiated, but you didn’t really, “you” being the party, didn’t really participate…So that could be a big thing to lose.
And every contract is unique, of course, so every one will have its own nuances and whatever language, but take a look at any contract you would have with someone as to whether or not you need to initiate or conduct a mediation before you initiate a lawsuit or an arbitration.
Then of course, there are other sorts of conditions that may be required before you can sue someone or initiate an arbitration, and if you don’t, then you would have some consequences you may not want.
Example #2: “Right to Repair” Provision
For example, if you have an agreement over a vehicle, Lemon Law thing…When you buy a car, or lease, or something like that, there may well be a “right to repair” provision in the contract requiring you to take the vehicle back, to let the manufacturer have a chance to look at it and decide what to do, make an attempt to fix the vehicle, whatever, as opposed to just straight out being surprised with a lawsuit. And if you haven’t complied with that condition, then there are usually consequences of some sort or another.
Example #3: Advance Notice
Advance notice is another thing. You know, rather than surprising some business or some entity with whom you have this contract, rather than surprising them with a lawsuit, usually there’s some sort of notice requirement that is required to be given to them for, again, early dispute resolution processes. And that’s really the key to see if you can resolve any dispute you may have early and outside of a formal litigation or arbitration process.
Example #4: Insurance Policy Conditions
So what’s another kind of example? And that would be insurance policies. Insurance policies have conditions. Of course, if you’re the insured, you’ve submitted an application for insurance that may or may not be deemed to form a part of the insurance. It depends on the wording, of course, of the application and of the policy. But there are sections of the policy, usually near the end for example, under the CG 00 01 Form, the General Liability Coverage Form, just using that for example. And it would have conditions in it.
Every policy is going to have conditions. Usually they require prompt or reasonable notice or may give a time parameter for what’s considered “reasonable notice” if there is a loss or a claim that’s been asserted against you, and this is especially important in professional liability, directors & officers, any sort of policy that’s a claims-made policy.
And then one of the other conditions that you will often find…For example in cyber policies is that you’ve complied with whatever the requirements are to maintain a safe network. If in the application you’ve checked off the box, ticked the box saying…Oh yeah, we update regularly, we use multi-factor authentication, we do this, we do that, and if you don’t really do that, including on an ongoing basis, then there may be no coverage because you didn’t comply with the contract.
The most recent example of this I have is the Santa Clara Valley Water District v. Century Indemnity Company case out of California. It came out of Santa Clara, in the appellate district there. The citation is 2023 DJ DAR 2729, and it was filed April 3, 2023. So you can find it wherever you pick up your cases. But anyway, in this particular case, it involved environmental contamination and the insureds, Santa Clara Valley Water District, they entered into negotiations with the entity that was suing them, and they agreed to pay money, and they made a payment, and the court in this case goes in to a nice discussion about voluntary payments and how then they could not recover that payment that they made from their insurance company. So the Santa Clara Valley Water District was out of luck on that one because they made the payment without involving their insurance carrier, because they failed to follow a condition in the policy.
And so really, what is it that we learned from all these things? Contracts are there for a reason and reading them sooner than later is good. But definitely at any point in time before or when a dispute might start or when something might be happening, go back and read it and see what you need to do as a condition-precedent, perhaps, to the contract being applicable to whatever it is you might be seeking from the other party. And I especially urge you for a cyber policy that management, the legal department, and the tech department, all need to be on the same page to make sure that whatever requirements there are for that particular policy to be effective are actually met by the business, by the insured. So that’s it for today. Read your contracts.
I'm Jean Lawler, it's a pleasure as always to be here with you. Please follow me on LinkedIn. Subscribe to my YouTube channel. Listen to my podcast on your favorite podcasting provider and I’ll see you again. Thank you so much. Bye bye.
[outro music]