[ { "type": "accessibility-statement", "name": "Accessibility Statement", "name_de": "Accessibility Statement", "category": "b2c-consumer", "schema_version": 1, "form_requirement": { "base": "electronic", "bgb_ref": "42 USC § 12181 et seq. (ADA Title III); 28 CFR Part 35 (DOJ 2024 Title II web rule); 29 USC § 794d (Section 508)", "alternatives": [], "notes": "The statement itself is not legally mandated as a published document under ADA Title III, but the absence of a statement materially increases lawsuit-triage exposure. Plaintiffs' counsel routinely scan corpus-wide for sites lacking an accessibility statement or with a stale statement as a screening signal. The statement should be published electronically and linked from the page footer. Updates at least annually, after any significant redesign, and after any third-party accessibility audit. Date of most recent update and the WCAG version targeted should be prominently disclosed. The page itself must conform to the accessibility standard it claims to target — an inaccessible accessibility statement is the canonical own-goal. DOJ 2024 final rule (28 CFR Part 35) adopts WCAG 2.1 AA for state/local government web content — compliance April 24, 2026 (populations 50,000+) / April 26, 2027 (under 50,000). Parallel Title III rule for private businesses remains pending." }, "required_clauses": [ { "id": "commitment_statement", "name": "Commitment Statement", "name_de": "Commitment Statement", "mandatory": true, "notes": "Clear, plain-language statement of the business's commitment to digital accessibility and to providing an equivalent experience for users with disabilities. Reference both the moral and the legal basis — typically the ADA, Section 508 (if applicable), Section 504 (if federally funded), and state civil-rights laws (Unruh, NYSHRL, NYCHRL, CADA, M.G.L. c. 272 § 98)." }, { "id": "standard_and_conformance_level", "name": "Standard Targeted and Conformance Level", "name_de": "Standard Targeted and Conformance Level", "mandatory": true, "bgb_ref": "W3C WCAG 2.1 AA (2018); W3C WCAG 2.2 AA (2023); 36 CFR Part 1194 (Section 508 → WCAG 2.0 AA)", "notes": "The technical standard targeted, with version specificity. Consensus is WCAG 2.1 Level AA (also incorporated by the DOJ 2024 rule). Some sophisticated organisations target WCAG 2.2 Level AA. Specify conformance level: 'fully conforms', 'partially conforms', or 'does not conform' per W3C-recommended conformance claims." }, { "id": "scope", "name": "Scope", "name_de": "Scope", "mandatory": true, "notes": "The websites, mobile applications, and other digital surfaces covered by the statement. Where third-party content (user-generated content, embedded ads, social-media widgets, third-party hosted videos) is excluded from scope, that exclusion should be stated. Authenticated portions of the site (logged-in user dashboards) should be included." }, { "id": "accessibility_features", "name": "Accessibility Features", "name_de": "Accessibility Features", "mandatory": true, "notes": "Non-exhaustive list of accessibility features built into the site — keyboard navigation, semantic HTML, ARIA landmarks, skip links, alt text on informational images, captions on videos, transcripts on audio, sufficient colour contrast, resizable text, focus indicators, accessible forms with explicit labels and error messages." }, { "id": "known_limitations", "name": "Known Limitations", "name_de": "Known Limitations", "mandatory": true, "notes": "Frank disclosure of known accessibility limitations — areas of the site that do not yet conform to the target standard. Examples: legacy PDFs without accessible markup, third-party-embedded content not under the business's control, beta features not yet remediated. Each known limitation should include a brief description, the affected pages or features, the underlying barrier, and a remediation plan or alternative-access mechanism. The single most important defensive element — shifts the litigation narrative from 'the business is ignoring accessibility' to 'the business has identified the issues and is working on them'." }, { "id": "alternate_access_feedback_mechanism", "name": "Alternate Access / Feedback Mechanism", "name_de": "Alternate Access / Feedback Mechanism", "mandatory": true, "notes": "A means by which a user encountering an accessibility barrier can request assistance or alternate access. Standard implementation: dedicated email address (accessibility@example.com) + telephone number; some add a webform with explicit accessibility-feedback fields. Commitment to respond within a stated timeframe — typically 2-5 business days for acknowledgement, 30 days for resolution where feasible." }, { "id": "assessment_approach", "name": "Assessment Approach", "name_de": "Assessment Approach", "mandatory": true, "notes": "Description of the approach used to evaluate accessibility — third-party accessibility audit (auditor named, date of most recent audit, standard against which audit was conducted), automated scanning (tools: axe-core, WAVE, Lighthouse, Siteimprove), and manual testing (assistive-technology testing with screen readers — JAWS, NVDA, VoiceOver, TalkBack — and keyboard-only testing). The burden-of-proof posture in accessibility litigation is increasingly met by documented audit history." }, { "id": "date_of_last_review", "name": "Date of Last Review and Version", "name_de": "Date of Last Review and Version", "mandatory": true, "notes": "Date of the most recent review of the accessibility statement and the WCAG version targeted. A change log preserving historical versions is good practice. Stale statements (3+ years old or referencing WCAG 2.0 without 2.1/2.2) are a plaintiff-triage signal." }, { "id": "contact_information", "name": "Contact Information", "name_de": "Contact Information", "mandatory": true, "notes": "Dedicated contact for accessibility questions — email, telephone, and (where staffing permits) designated accessibility officer or coordinator. ADA Title II coordinator requirements apply to state/local governments under 28 CFR § 35.107; private businesses typically have a designated accessibility lead within legal, product, or engineering." } ], "optional_clauses": [ { "id": "conformance_audit_history", "name": "Conformance Audit History and Remediation Roadmap", "name_de": "Conformance Audit History and Remediation Roadmap", "notes": "Summary of recent third-party audits, the findings, and the remediation status. Public visibility of the roadmap demonstrates ongoing commitment and triages serial-plaintiff targeting." }, { "id": "vpat_acr_public_posting", "name": "VPAT / Accessibility Conformance Report", "name_de": "VPAT / Accessibility Conformance Report", "bgb_ref": "36 CFR Part 1194 (Section 508)", "notes": "For B2B SaaS or software products sold to the federal government or to large enterprises, the public VPAT (ITI ACR format) is a near-universal procurement requirement. Public posting reduces the burden of per-customer VPAT generation." }, { "id": "training_and_procurement", "name": "Training and Procurement Commitments", "name_de": "Training and Procurement Commitments", "notes": "Disclosure that internal teams receive accessibility training and that third-party vendors and content contributors are required to deliver accessible content." }, { "id": "mobile_app_disclosures", "name": "Mobile Application Disclosures", "name_de": "Mobile Application Disclosures", "notes": "Separate disclosure of accessibility features in the iOS and Android versions: VoiceOver and TalkBack support, Dynamic Type / large-text support, AssistiveTouch / Switch Access compatibility." }, { "id": "atag_wcag3_forward_commitment", "name": "ATAG / WCAG 3.0 Forward-Looking Commitment", "name_de": "ATAG / WCAG 3.0 Forward-Looking Commitment", "notes": "Disclosure of any commitment to evolving standards — ATAG 2.0 (Authoring Tool Accessibility Guidelines), the in-development W3C WCAG 3.0 'Silver' standard." }, { "id": "section_504_disclosure", "name": "Section 504 Healthcare Disclosure", "name_de": "Section 504 Healthcare Disclosure", "bgb_ref": "29 USC § 794; 45 CFR Part 84 (2024)", "notes": "For healthcare providers receiving federal financial assistance: HHS 2024 Section 504 rule adopted WCAG 2.1 AA for healthcare provider websites — effective May 2024 with rolling compliance dates. Disclosure of the standard and remediation status is appropriate." } ], "forbidden_in_agb": [ { "clause_id": "overlay_only_remediation", "name_de": "Accessibility Overlay as Sole Remediation Strategy", "bgb_ref": "Murphy v. Eyebobs (S.D.N.Y. 2021); Murphy v. Kohl's (D. Or. 2022); Williams v. AudioEye (D. Ariz. 2022)", "consequence": "Tools like accessiBe, UserWay, and AudioEye that purport to retrofit accessibility through a JavaScript overlay have been the target of substantial criticism and a growing body of unsuccessful-defendant case law. Reliance on an overlay alone as the accessibility strategy materially increases litigation risk; the Overlay Fact Sheet signed by hundreds of accessibility professionals describes the technical and ethical concerns. Overlays may be a useful auxiliary tool but cannot substitute for native accessible markup and testing." }, { "clause_id": "stale_statement", "name_de": "Stale Accessibility Statement", "bgb_ref": "ADA Title III; state civil-rights laws", "consequence": "A statement dated three or more years ago, or one that refers to 'WCAG 2.0' without reference to 2.1 or 2.2, is a plaintiff-triage signal and may be presented in litigation as evidence that the business's accessibility commitment is performative. Annual review is the minimum." }, { "clause_id": "misrepresentation_of_conformance", "name_de": "Misrepresentation of Conformance Level", "bgb_ref": "15 USC § 45 (FTC Act § 5); state UDAP statutes", "consequence": "A statement that the site 'fully conforms to WCAG 2.1 AA' when it materially does not is an FTC § 5 deceptive practice and a state-law deceptive-trade-practices violation in most states. Honest 'partially conforms' or 'conforms with known limitations' language is the safer posture." }, { "clause_id": "no_alternate_access_mechanism", "name_de": "No Alternate-Access Mechanism", "bgb_ref": "42 USC § 12182(b)(2)(A)(iii); 28 CFR § 36.303", "consequence": "A statement that documents barriers but provides no email, telephone, or other channel for users to request alternate access leaves the business with no defence against actual-denial-of-access claims. ADA requires effective auxiliary aids and services where necessary to ensure that no individual with a disability is excluded." } ], "court_cases": [ { "case": "Robles v. Domino's Pizza, LLC", "year": 2019, "url": "https://cdn.ca9.uscourts.gov/datastore/opinions/2019/01/15/17-55504.pdf", "relevance": "Foundational 9th Circuit case applying the 'nexus' test to web accessibility under ADA Title III. Domino's website and mobile app sold pizza delivery from physical stores, so accessibility barriers on the digital surfaces denied access to the physical place's goods. SCOTUS denied certiorari in Domino's Pizza, LLC v. Robles, 140 S. Ct. 122 (2019). 913 F.3d 898." }, { "case": "Gil v. Winn-Dixie Stores, Inc.", "year": 2017, "url": "https://www.courtlistener.com/opinion/4421389/gil-v-winn-dixie-stores-inc/", "relevance": "S.D. Fla. found ADA Title III violations on a website-only basis — the first major post-trial verdict for a web-accessibility plaintiff. Subsequently vacated by the 11th Circuit (21 F.4th 775, 2021) for mootness following Winn-Dixie's remediation, leaving the 11th Circuit's substantive position unsettled. 257 F. Supp. 3d 1340." }, { "case": "Carparts Distribution Center, Inc. v. Automotive Wholesaler's Ass'n of New England", "year": 1994, "url": "https://law.justia.com/cases/federal/appellate-courts/F3/37/12/615577/", "relevance": "Foundational 1st Circuit case holding that ADA Title III 'public accommodation' is not limited to physical places. Established the view followed by the 1st, 2nd, and 7th Circuits that a website alone may be a place of public accommodation. 37 F.3d 12." }, { "case": "National Federation of the Blind v. Target Corp.", "year": 2008, "url": "https://www.courtlistener.com/docket/4197728/national-federation-of-the-blind-v-target-corp/", "relevance": "Foundational web-accessibility class-action settlement — $6 million plus implementation of WCAG-style remediation across Target.com. Established the modern template for web-accessibility class-action settlements and the link between physical stores and digital surfaces. N.D. Cal." }, { "case": "Murphy v. Eyebobs, LLC", "year": 2021, "url": "https://www.courtlistener.com/docket/59749137/murphy-v-eyebobs-llc/", "relevance": "Refused to dismiss web-accessibility claim where defendant relied solely on accessiBe overlay. One of the first published decisions explicitly addressing overlay-only remediation strategies. S.D.N.Y." }, { "case": "United States v. Hooters of America, LLC", "year": 2001, "url": "https://www.ada.gov/hooters_sa.html", "relevance": "Early DOJ ADA Title III consent decree covering accessibility of physical restaurants. Cited as historical foundation for the DOJ enforcement posture that has since extended to digital surfaces through consent decrees with banks (H&R Block, 2014), universities (UC Berkeley, 2016), and retailers." } ], "further_reading": { "bgb_articles": [ "42 USC § 12181 et seq. — ADA Title III", "42 USC § 12101 — ADA findings and purposes", "28 CFR Part 36 — ADA Title III regulations", "28 CFR Part 35 — ADA Title II regulations (2024 web rule)", "29 USC § 794 — Section 504 of the Rehabilitation Act", "29 USC § 794d — Section 508 of the Rehabilitation Act", "36 CFR Part 1194 — Section 508 ICT Standards", "49 USC § 41705 — Air Carrier Access Act", "14 CFR Part 382 — ACAA implementing regulations", "47 CFR Part 79 — FCC CVAA closed-captioning rules", "Cal. Civ. Code § 51 — Unruh Civil Rights Act", "Cal. Civ. Code § 54-55.32 — California Disabled Persons Act", "N.Y. Exec. Law § 296 — NY State Human Rights Law", "NYC Admin. Code § 8-107 — NYC Human Rights Law", "W3C WCAG 2.1 (2018) — Web Content Accessibility Guidelines", "W3C WCAG 2.2 (October 2023) — adds focus appearance, target size, etc.", "W3C ATAG 2.0 — Authoring Tool Accessibility Guidelines" ], "chaindoc_blog": [ "https://chaindoc.io/blog/legal-strength-blockchain-e-signatures" ] }, "lastVerified": "2026-05-10", "confidence": "high", "validationConflicts": [] }, { "type": "bill-of-sale", "name": "Bill of Sale", "name_de": "Bill of Sale", "category": "b2b-commercial", "schema_version": 1, "form_requirement": { "base": "electronic", "bgb_ref": "UCC § 2-201 (sale of goods $500+); UCC § 2-401 (title-passing)", "alternatives": [ "free" ], "notes": "UCC § 2-201 requires a signed writing for any sale of goods $500 or more, satisfied by the bill of sale itself. Motor vehicle transfers require state DMV title-certificate endorsement in addition to or in place of a bill of sale; some states (Louisiana, West Virginia, Ohio) require notarisation. Coast Guard-documented vessels require a CG-1340 bill of sale witnessed by two parties or notarised. Electronic execution per ESIGN/UETA generally valid, but state DMV practices vary — many require wet-ink signature on title certificates." }, "required_clauses": [ { "id": "parties", "name": "Parties", "name_de": "Parties", "mandatory": true, "notes": "Full legal name and address of Seller and Buyer. For corporate parties, state of incorporation; for individuals, sufficient identification (driver's licence number, address) for title-records purposes." }, { "id": "property_description", "name": "Property Description", "name_de": "Property Description", "mandatory": true, "guidance": "Sufficient specificity for unique identification. Motor vehicles: make, model, year, VIN. Boats: HIN, Coast Guard documentation number, manufacturer, model, length. Equipment: manufacturer, model, serial number. Asset-purchase deals: by reference to attached schedule. Insufficient description renders the instrument unenforceable for failure of consideration of identifiable subject matter." }, { "id": "consideration", "name": "Consideration", "name_de": "Consideration", "mandatory": true, "notes": "Specific dollar amount preferred over '$1 and other valuable consideration' for sales-tax computation, capital-gains tax basis, and evidentiary value. Required to exist (gift without consideration may require additional formalities)." }, { "id": "conveyance_language", "name": "Conveyance Language", "name_de": "Conveyance Language", "mandatory": true, "bgb_ref": "UCC § 2-401", "notes": "Active present-transfer language: 'Seller hereby sells, transfers, assigns, and conveys to Buyer...'. Effects the title transfer per UCC § 2-401." }, { "id": "title_warranty_or_disclaimer", "name": "Title Warranty or Disclaimer", "name_de": "Title Warranty or Disclaimer", "mandatory": true, "bgb_ref": "UCC § 2-312; UCC § 2-403", "notes": "Standard pattern: Seller warrants good and marketable title, freedom from liens and encumbrances, and authority to sell. Quitclaim bill of sale (no warranty even as to title) used in salvage and UCC § 9-610 dispositions. UCC § 2-312 implies warranty of title that can be expressly disclaimed." }, { "id": "condition_warranty_or_as_is", "name": "Condition Warranty or AS-IS Disclaimer", "name_de": "Condition Warranty or AS-IS Disclaimer", "mandatory": true, "bgb_ref": "UCC § 2-316", "notes": "Express warranty of operating condition OR conspicuous AS-IS disclaimer per UCC § 2-316(3)(a). Conspicuousness required: typically all-caps treatment per UCC § 1-201(b)(10). 'AS IS' or 'WITH ALL FAULTS' phrases statutorily recognised." }, { "id": "date_and_signature", "name": "Date and Signature", "name_de": "Date and Signature", "mandatory": true, "notes": "Date of execution. Seller's signature is the operative formality; Buyer's signature customary but not strictly required. Witness signatures required for some Coast Guard transactions. Notarisation as required by state law." } ], "optional_clauses": [ { "id": "odometer_disclosure", "name": "Odometer Disclosure (Motor Vehicles)", "name_de": "Odometer Disclosure (Motor Vehicles)", "bgb_ref": "49 CFR § 580.5; 49 USC § 32705", "notes": "REQUIRED for motor-vehicle sales of vehicles less than 20 model years old per 2021 NHTSA rule (previously 10-year window). Written disclosure on state-prescribed form or on title certificate. False disclosure criminal under 49 USC § 32709." }, { "id": "lien_release", "name": "Lien Release", "name_de": "Lien Release", "notes": "If property subject to a recorded lien, lien-release language or separate lien-release instrument required for clean title. UCC-3 termination statement for Article 9 security interests." }, { "id": "further_assurances", "name": "Further Assurances", "name_de": "Further Assurances", "notes": "Seller agrees to execute additional documents reasonably necessary to perfect transfer of title, including title-certificate endorsements, registration applications, IP assignments, third-party-consent solicitations." }, { "id": "apa_cross_reference", "name": "Asset Purchase Agreement Cross-Reference", "name_de": "Asset Purchase Agreement Cross-Reference", "notes": "In commercial asset-purchase deals: 'Pursuant to and subject to the terms and conditions of the Asset Purchase Agreement dated [date]'. Avoids duplication of representations/warranties; preserves APA's R&W and indemnity framework as the controlling instrument." }, { "id": "schedule_of_property", "name": "Schedule of Property", "name_de": "Schedule of Property", "notes": "Detailed listing for multi-asset transfers. Equipment registers; vehicle schedules; intangible-asset cross-references. Item-by-item allocation for IRS § 1060 / Form 8594 purposes." }, { "id": "governing_law", "name": "Governing Law", "name_de": "Governing Law", "notes": "Typically Seller's home state or place of delivery. See /handbook/us/foundation/standard-clauses/." }, { "id": "notarization", "name": "Notarisation", "name_de": "Notarisation", "notes": "Required for motor vehicles in certain states (Louisiana, West Virginia, Ohio for trade-ins, Maryland for certain transactions). Required for Coast Guard-documented vessels (or two-witness alternative). Recommended for high-value or contested transfers regardless of statutory requirement." }, { "id": "sales_tax", "name": "Sales Tax Treatment", "name_de": "Sales Tax Treatment", "notes": "Allocation of sales/use tax responsibility. Exemption certificate (resale, manufacturing, agricultural, non-profit) reference if applicable. Recital that sale price excludes or includes sales tax." }, { "id": "bulk_sales_notice", "name": "Bulk Sales Notice (UCC Article 6)", "name_de": "Bulk Sales Notice (UCC Article 6)", "notes": "REQUIRED only in California, Maryland, and a few other states that retain UCC Article 6. Notice to seller's creditors before closing on bulk transfer of inventory; failure may render buyer liable to seller's creditors. Most states have repealed Article 6." } ], "court_cases": [ { "case": "Cugnini v. Reynolds Cattle Co.", "year": 1985, "url": "https://casetext.com/case/cugnini-v-reynolds-cattle-co", "relevance": "Colorado Supreme Court case applying UCC § 2-403(2) entrusting doctrine — entrusting possession of goods to a merchant who deals in goods of that kind gives the merchant power to transfer all rights of the entruster to a buyer in ordinary course. Foundational case for downstream-purchaser good-faith protection. 691 P.2d 1138." }, { "case": "Sun Cooperative Credit Union v. Bray", "year": 1986, "url": "https://casetext.com/case/sun-co-op-credit-union-v-bray", "relevance": "Application of UCC § 2-403 voidable-title doctrine: a seller with voidable title (e.g., obtained by fraud) may transfer good title to a good-faith purchaser for value. Drafting consequence: title-warranty representations in bills of sale are critical evidence of good faith. 144 Vt. 491." }, { "case": "In re Atlantic Computer Systems", "year": 1991, "url": "https://casetext.com/case/in-re-atlantic-computer-systems-1", "relevance": "Title-passing analysis under UCC § 2-401 in an equipment-leasing/sale-leaseback context. Held that title-passing depends on parties' explicit agreement or, absent agreement, on physical delivery, not on financing documentation. 173 B.R. 858 (S.D.N.Y.)." } ], "further_reading": { "bgb_articles": [ "UCC § 2-105 — Definition of 'goods'", "UCC § 2-201 — Statute of Frauds", "UCC § 2-312 — Warranty of Title and Against Infringement", "UCC § 2-314 — Implied Warranty of Merchantability", "UCC § 2-315 — Implied Warranty of Fitness for Particular Purpose", "UCC § 2-316 — Exclusion or Modification of Warranties", "UCC § 2-401 — Passing of Title", "UCC § 2-403 — Power to Transfer; Good Faith Purchase", "UCC § 2-501 — Insurable Interest and Identification", "UCC § 2-509 — Risk of Loss in Absence of Breach", "UCC § 2-510 — Effect of Breach on Risk of Loss", "UCC Article 6 — Bulk Sales (repealed in most states)", "49 CFR § 580.5 — Truth in Mileage Act disclosure", "49 USC § 32705 — Odometer disclosure requirements", "49 USC § 32709 — Penalties for odometer fraud", "46 USC § 12101 — Vessel Documentation", "33 CFR § 181.23 — Hull identification numbers", "26 USC § 1060 — Asset purchase price allocation", "California REG 135 — California Bill of Sale form", "Texas Form 130-U — Texas Application for Title and Registration" ], "chaindoc_blog": [ "https://chaindoc.io/blog/contract-management-it", "https://chaindoc.io/blog/legal-strength-blockchain-e-signatures" ] }, "lastVerified": "2026-05-10", "confidence": "high", "validationConflicts": [] }, { "type": "contract-law-basics", "name": "US Common-Law Contract Framework", "name_de": "US Common-Law Contract Framework", "category": "foundation", "schema_version": 1, "form_requirement": { "base": "free", "bgb_ref": "R2K §§ 1-26 (Restatement (Second) of Contracts) — persuasive; binding law is state common law plus UCC Art. 2 for goods", "alternatives": [ "electronic" ], "notes": "US default is no form requirement. Specific carve-outs in each state's Statute of Frauds (modeled on R2K § 110) require a signed writing for certain categories: contracts not performable within one year, sale-of-land contracts, suretyship promises, marriage contracts, executor promises, and UCC § 2-201 sale-of-goods contracts for $500 or more. ESIGN Act (15 USC §§ 7001-7031) and UETA (in 49 states; NY uses ESRA) make electronic signatures and records satisfy any Statute of Frauds writing requirement." }, "required_clauses": [], "optional_clauses": [ { "id": "offer", "name": "Offer", "name_de": "Offer", "bgb_ref": "R2K § 24", "notes": "Manifestation of willingness to enter into a bargain so made as to justify another in understanding that assent will conclude it. Distinguished from preliminary negotiations and advertisements (R2K § 26)." }, { "id": "acceptance", "name": "Acceptance", "name_de": "Acceptance", "bgb_ref": "R2K §§ 50-70", "notes": "Manifestation of assent to the terms of the offer in the manner invited or required. Mirror-image rule under common law; relaxed by UCC § 2-207 for sale-of-goods contracts." }, { "id": "consideration", "name": "Consideration", "name_de": "Consideration", "bgb_ref": "R2K § 71", "notes": "Bargained-for exchange of legal value. Nominal consideration generally insufficient outside option contracts (R2K § 87) and modifications of land-sale contracts. Hamer v. Sidway 124 N.Y. 538 (1891) is canonical." }, { "id": "capacity", "name": "Capacity", "name_de": "Capacity", "bgb_ref": "R2K §§ 12-16", "notes": "Minors (under 18 generally), persons under guardianship, and persons mentally incompetent at time of contracting lack full capacity. Minor contracts voidable at minor's option, subject to necessaries exception." }, { "id": "legality", "name": "Legality of Purpose", "name_de": "Legality of Purpose", "bgb_ref": "R2K §§ 178-199", "notes": "Contracts unenforceable on public-policy grounds — gambling debts where prohibited, agreements in restraint of trade exceeding reasonableness, contracts inducing crime or tort, certain exculpatory clauses for gross negligence." }, { "id": "statute_of_frauds", "name": "Statute of Frauds Compliance", "name_de": "Statute of Frauds Compliance", "bgb_ref": "R2K § 110; UCC § 2-201", "notes": "Six common-law categories require signed writing: contracts in consideration of marriage; contracts not performable within one year; sale-of-land contracts; executor promises; suretyship promises (the 'main purpose' exception narrows this); and under UCC § 2-201, sale of goods for $500 or more. Merchant memo exception, part performance, and admissions in pleadings cure missing writing." }, { "id": "parol_evidence", "name": "Parol Evidence Rule", "name_de": "Parol Evidence Rule", "bgb_ref": "R2K §§ 209-218; UCC § 2-202", "notes": "Bars extrinsic evidence of prior or contemporaneous agreements that contradict a fully integrated written contract. Merger / integration clauses raise presumption of full integration. Williston (four-corners) vs. Corbin (intent) approaches split state by state." }, { "id": "choice_of_law", "name": "Choice of Law", "name_de": "Choice of Law", "bgb_ref": "R2K Conflict of Laws § 187", "notes": "Party-chosen law generally enforced if (1) the chosen state has a substantial relationship to the parties or transaction or there is another reasonable basis for the choice, and (2) application would not be contrary to a fundamental public policy of a state with materially greater interest. State variations apply." }, { "id": "choice_of_forum", "name": "Choice of Forum / Forum-Selection", "name_de": "Choice of Forum / Forum-Selection", "bgb_ref": "Atlantic Marine Constr. Co. v. U.S. Dist. Court, 571 U.S. 49 (2013)", "notes": "Forum-selection clauses are presumptively enforceable in federal court under 28 USC § 1404(a); transfer is denied only in extraordinary circumstances. State enforcement varies — most follow Bremen v. Zapata 407 U.S. 1 (1972)." }, { "id": "e_signature", "name": "Electronic Signature Compliance", "name_de": "Electronic Signature Compliance", "bgb_ref": "15 USC §§ 7001-7031 (ESIGN); UETA § 7 (in 49 states); NY CPLR § 304-a / ESRA", "notes": "Electronic signature satisfies any state or federal writing requirement subject to consumer-consent rules under 15 USC § 7001(c). Carve-outs in 15 USC § 7003: wills, trusts, family-law documents, court orders, certain UCC documents (excluding sale-of-goods records), notices of cancellation of utilities, foreclosure, eviction, life/health insurance, product recalls." } ], "forbidden_in_agb": [], "court_cases": [ { "case": "Lucy v. Zehmer", "year": 1954, "url": "https://www.law.cornell.edu/wex/lucy_v_zehmer", "relevance": "Objective theory of mutual assent — outward manifestations control over subjective intent; a 'joke' contract written on a restaurant check was enforceable where reasonable person would read the words as serious offer and acceptance. 196 Va. 493." }, { "case": "Atlantic Marine Constr. Co. v. U.S. Dist. Court", "year": 2013, "url": "https://www.law.cornell.edu/supremecourt/text/12-929", "relevance": "Forum-selection clauses are presumptively enforceable; a court considering transfer under 28 USC § 1404(a) where a valid forum-selection clause exists may not weigh the parties' private interests, only public-interest factors. 571 U.S. 49." }, { "case": "AT&T Mobility LLC v. Concepcion", "year": 2011, "url": "https://www.law.cornell.edu/supremecourt/text/09-893", "relevance": "FAA preempts state laws (such as California's Discover Bank rule) that condition arbitration clause enforceability on the availability of class-wide proceedings; class-action waivers in consumer arbitration clauses are enforceable. 563 U.S. 333." }, { "case": "Williams v. Walker-Thomas Furniture Co.", "year": 1965, "url": "https://www.law.cornell.edu/wex/williams_v._walker-thomas_furniture", "relevance": "Establishes procedural and substantive unconscionability framework for refusing enforcement of one-sided consumer contracts. 350 F.2d 445 (D.C. Cir.)." } ], "further_reading": { "bgb_articles": [ "Restatement (Second) of Contracts § 1 — Contract Defined", "Restatement (Second) of Contracts § 17 — Requirement of a Bargain", "Restatement (Second) of Contracts § 24 — Offer Defined", "Restatement (Second) of Contracts § 71 — Requirement of Exchange", "Restatement (Second) of Contracts § 110 — Classes of Contracts within the Statute of Frauds", "Restatement (Second) of Contracts § 178 — Public Policy Unenforceability", "Restatement (Second) of Contracts § 209 — Integrated Agreements", "Restatement (Second) of Contracts §§ 151-158 — Mistake", "Restatement (Second) of Contracts §§ 174-177 — Duress and Undue Influence", "UCC § 2-201 — Statute of Frauds for Sale of Goods", "UCC § 2-207 — Battle of the Forms", "15 USC §§ 7001-7031 — ESIGN Act", "UETA (Uniform Electronic Transactions Act) — Uniform Law Commission 1999", "9 USC §§ 1-307 — Federal Arbitration Act" ], "chaindoc_blog": [ "https://chaindoc.io/blog/legal-strength-blockchain-e-signatures", "https://chaindoc.io/blog/digital-signature-compliance-eidias-gdpr-nist" ] }, "lastVerified": "2026-05-10", "confidence": "high", "validationConflicts": [] }, { "type": "cookie-consent", "name": "Cookie Consent", "name_de": "Cookie Consent", "category": "b2c-consumer", "schema_version": 1, "form_requirement": { "base": "electronic", "bgb_ref": "Cal. Civ. Code § 1798.135; 11 CCR §§ 7012, 7025; Colo. Rev. Stat. § 6-1-1306(1)(a)(IV)", "alternatives": [], "notes": "No federal cookie-consent statute analogous to EU ePrivacy Directive 2002/58 or German TTDSG § 25. US framework derives the disclosure obligation from CCPA/CPRA sale-share treatment, state-law UOOM recognition, VPPA/ECPA/CIPA backstop, and FTC § 5 enforcement. The standard implementation pairs (1) the homepage 'Do Not Sell or Share My Personal Information' link (Cal. Civ. Code § 1798.135) — also reachable as a 'Your Privacy Choices' link with the CPPA-prescribed icon (11 CCR § 7015), (2) a cookie banner with layered notice + easy reject + persistence, (3) server-side and client-side recognition of the Global Privacy Control signal, and (4) a CMP (OneTrust, Cookiebot, Didomi, Sourcepoint, Osano, Usercentrics) handling per-user consent logging and IAB GPP signal transmission. For EU traffic, geographic gating to a GDPR-style opt-in regime is required." }, "required_clauses": [ { "id": "categories_of_cookies", "name": "Categories of Cookies and Similar Technologies", "name_de": "Categories of Cookies and Similar Technologies", "mandatory": true, "notes": "Categorical breakdown: strictly necessary, functional/preferences, analytics/performance, advertising/targeting, social media, personalisation. For each category, plain-English description of purpose, the providers (with links to their privacy policies), and the typical retention period. Session-replay, live-chat transcription, and product-analytics SDKs (Heap, Mixpanel, Amplitude, FullStory, Hotjar, LogRocket) should be separately enumerated given the CIPA/ECPA exposure profile." }, { "id": "specific_cookies_table", "name": "Specific Cookies and Trackers Deployed", "name_de": "Specific Cookies and Trackers Deployed", "mandatory": true, "notes": "Table listing each cookie or tracker name, the domain, the type (HTTP cookie, localStorage, sessionStorage, IndexedDB, fingerprinting), the purpose, the third party (if any), and the retention period. Industry practice is to generate and update this table automatically via CMP scanning." }, { "id": "sale_share_disclosure", "name": "Sale and Sharing Disclosure", "name_de": "Sale and Sharing Disclosure", "mandatory": true, "bgb_ref": "Cal. Civ. Code § 1798.140(ad)-(ah); 11 CCR § 7012", "notes": "Explicit yes/no — whether the deployment of advertising or social-media tracking technologies constitutes 'sale' or 'share' within Cal. Civ. Code § 1798.140(ad)-(ah). For the typical consumer business using Meta Pixel, Google Ads, TikTok, LinkedIn, the answer is yes for both; the cookie policy must disclose this and link to the 'Do Not Sell or Share' mechanism." }, { "id": "do_not_sell_or_share_link", "name": "Do Not Sell or Share My Personal Information Link", "name_de": "Do Not Sell or Share My Personal Information Link", "mandatory": true, "bgb_ref": "Cal. Civ. Code § 1798.135(a)(1); 11 CCR § 7015", "notes": "Clear and conspicuous link on the business's internet homepage titled 'Do Not Sell or Share My Personal Information' that enables the consumer to opt out of sale and sharing. Combinable with the sensitive-PI link into a single 'Your Privacy Choices' link with the CPPA-prescribed icon. Opt-out must be effective without requiring account creation or login." }, { "id": "limit_use_sensitive_pi_link", "name": "Limit the Use of My Sensitive Personal Information Link", "name_de": "Limit the Use of My Sensitive Personal Information Link", "mandatory": true, "bgb_ref": "Cal. Civ. Code § 1798.135(a)(2); § 1798.121", "notes": "Required where the business uses sensitive PI (government identifiers, financial credentials, precise geolocation, racial/ethnic origin, religious beliefs, union membership, contents of mail/email/text not directed to the business, genetic data, biometric data for unique identification, health, sex-life or sexual-orientation data) for purposes other than the enumerated permitted purposes in § 1798.121. Combinable with the Do Not Sell link into a single 'Your Privacy Choices' link." }, { "id": "universal_opt_out_recognition", "name": "Universal Opt-Out Signal Recognition (GPC)", "name_de": "Universal Opt-Out Signal Recognition (GPC)", "mandatory": true, "bgb_ref": "11 CCR § 7025; Colo. Rev. Stat. § 6-1-1306(1)(a)(IV); Conn. Gen. Stat. § 42-520(e)", "notes": "Clear statement that the business recognises the Global Privacy Control signal (HTTP Sec-GPC: 1 header + navigator.globalPrivacyControl DOM property), with description of the effect — which categories of tracking are suppressed, whether suppression is browser-level or account-wide. Recognition must be server-side and client-side and must result in actual suppression of the relevant tracking technologies. Mandatory in CA, CO, CT, TX, MT, DE, OR, NJ." }, { "id": "third_party_opt_out_mechanisms", "name": "Third-Party Advertising Partner Opt-Out Links", "name_de": "Third-Party Advertising Partner Opt-Out Links", "mandatory": true, "notes": "Links to the NAI opt-out (https://optout.networkadvertising.org/), DAA opt-out (https://optout.aboutads.info/), and YourAdChoices for behavioural-advertising opt-out across multiple ad networks. For mobile, links to the AAID / IDFA opt-out instructions for Android and iOS respectively." }, { "id": "children_directed_disclosure", "name": "Children-Directed Services Disclosure", "name_de": "Children-Directed Services Disclosure", "mandatory": true, "bgb_ref": "15 USC § 6501; 16 CFR § 312.4", "notes": "For services that knowingly collect personal information from children under 13: COPPA-compliant disclosure of the cookies and tracking technologies used and the verifiable parental consent mechanism (16 CFR § 312.5). Several state laws extend opt-in consent to minors 13-17 (CTDPA, CPA, MDPA) — cookie policy should disclose where applicable." }, { "id": "last_updated_and_change_log", "name": "Last Updated Date and Change Log", "name_de": "Last Updated Date and Change Log", "mandatory": true, "notes": "Date of the most recent update, with a change log preserving historical versions. Material changes to tracking technologies (adding new third-party tracker, changing categories) should trigger contemporaneous user notification." } ], "optional_clauses": [ { "id": "eu_geographic_gating_disclosure", "name": "EU / UK / EEA Geographic Gating Disclosure", "name_de": "EU / UK / EEA Geographic Gating Disclosure", "notes": "Where the business serves EU residents, disclosure of the GDPR-style opt-in regime applied to that traffic and the geographic detection mechanism (IP-based or browser-locale-based) used to surface the EU consent banner." }, { "id": "iab_framework_disclosure", "name": "IAB Framework Disclosure (CCPA / GPP)", "name_de": "IAB Framework Disclosure (CCPA / GPP)", "notes": "Disclosure of the IAB CCPA Compliance Framework and IAB Global Privacy Platform (GPP) signal transmission used by the CMP to communicate user consent and opt-out status to downstream advertising partners. Industry-standard for businesses using major ad-tech vendors." }, { "id": "session_replay_consent", "name": "Session-Replay / Heatmap Consent", "name_de": "Session-Replay / Heatmap Consent", "bgb_ref": "Cal. Penal § 631 (CIPA); 18 USC § 2511 (ECPA)", "notes": "For businesses deploying FullStory, Hotjar, LogRocket, Microsoft Clarity, or similar session-replay tools: explicit consent mechanism in two-party-consent states (CA, PA, MA, CT, MD, WA, FL). Several recent CIPA class actions have targeted session-replay deployment without consent." }, { "id": "hipaa_tracking_disclosure", "name": "HIPAA Tracking-Technology Disclosure", "name_de": "HIPAA Tracking-Technology Disclosure", "bgb_ref": "45 CFR §§ 164.500-534; HHS OCR Bulletin December 2022 (updated March 2024)", "notes": "For HIPAA-covered entities deploying third-party tracking technologies on patient portals, scheduling pages, or condition-specific information pages: disclosure of the tracking arrangement, the underlying BAA with the tracking provider, and the patient-authorisation mechanism under 45 CFR § 164.508 where applicable." }, { "id": "vppa_consent", "name": "VPPA Consent for Video Disclosure", "name_de": "VPPA Consent for Video Disclosure", "bgb_ref": "18 USC § 2710", "notes": "For websites or apps that embed video content paired with Meta Pixel or similar advertising trackers: separate, conspicuous, written consent under 18 USC § 2710(b)(2)(B) to disclosure of video-viewing information to specified third parties. ToS-acceptance language is generally insufficient — distinct, granular consent is required." } ], "forbidden_in_agb": [ { "clause_id": "deny_sale_while_running_pixels", "name_de": "Denial of Sale/Share While Running Advertising Pixels", "bgb_ref": "Cal. Civ. Code § 1798.140(ad)-(ah); 15 USC § 45", "consequence": "Statutory definitions of 'sale' and 'share' capture cross-context behavioural advertising integrations even when no money changes hands. Denial-of-sale posture in the cookie policy while running Meta Pixel, Google Ads, TikTok, or LinkedIn Insight Tag is both a CCPA violation and an FTC Act § 5 deceptive practice. Sephora (Cal. AG 2022, $1.2M) is the canonical enforcement matter." }, { "clause_id": "decorative_gpc_recognition", "name_de": "Decorative-Only GPC Recognition", "bgb_ref": "11 CCR § 7025", "consequence": "Banner appearance change on GPC detection without functional suppression of the tracking is non-compliant under California's mandatory UOOM recognition rule. CPPA enforcement advisories 2023-2025 have repeatedly targeted this pattern." }, { "clause_id": "asymmetric_accept_reject", "name_de": "Asymmetric Accept-All vs. Reject-All Banner", "bgb_ref": "11 CCR § 7004 (dark patterns)", "consequence": "Dark pattern under CCPA Regulations — the 'Reject all' option must be at least as easy to click as 'Accept all'. Common violations include burying Reject in a sub-menu while presenting Accept as the primary action." }, { "clause_id": "pre_consent_pixel_firing_eu", "name_de": "Pre-Consent Pixel Firing for EU Traffic", "bgb_ref": "GDPR Article 6; ePrivacy Directive 2002/58 Article 5(3)", "consequence": "For EU traffic, non-essential tracking technologies firing before the consent action is a per-se ePrivacy / GDPR violation. CNIL, ICO, and other DPAs have fined Google, Meta, Amazon, and others tens of millions of euros for this pattern." }, { "clause_id": "session_replay_no_consent_two_party", "name_de": "Session Replay / Live Chat Transcription Without Consent in Two-Party-Consent State", "bgb_ref": "Cal. Penal § 631; 18 USC § 2511", "consequence": "CIPA (California, $5,000 statutory damages per violation) and ECPA (federal, $10,000+) impose two-party-consent requirements. Session-replay and live-chat transcription that captures user inputs without explicit consent has been the substantive basis for hundreds of class actions since 2022." }, { "clause_id": "hipaa_tracking_no_baa", "name_de": "HIPAA-Covered Tracking Without BAA and Patient Authorisation", "bgb_ref": "45 CFR §§ 164.500-534; OCR Bulletin Dec 2022 (updated Mar 2024)", "consequence": "Deployment of Meta Pixel, Google Analytics, or similar trackers on HIPAA-regulated web properties (patient portals, scheduling, condition-specific pages) without a Business Associate Agreement and patient authorisation under 45 CFR § 164.508 is a potential HIPAA violation. Multiple class actions and OCR investigations 2022-2025." } ], "court_cases": [ { "case": "People v. Sephora USA, Inc.", "year": 2022, "url": "https://oag.ca.gov/news/press-releases/attorney-general-bonta-announces-settlement-sephora-part-ongoing-enforcement", "relevance": "$1.2M California AG settlement — first major CCPA enforcement action. Held that businesses that disclose personal information to third parties for cross-context behavioural advertising are engaged in 'sale' under CCPA § 1798.140(ad), must honour Do Not Sell opt-outs including the Global Privacy Control signal, and that decorative-only GPC recognition is insufficient." }, { "case": "FTC v. BetterHelp, Inc.", "year": 2023, "url": "https://www.ftc.gov/legal-library/browse/cases-proceedings/2023169-betterhelp-inc-matter", "relevance": "$7.8M FTC settlement for sharing consumer mental-health intake responses with Facebook, Snapchat, Criteo, and Pinterest via tracking pixels while representing the information would be kept private. Established the FTC enforcement template for health-data pixel-tracking under FTC Act § 5." }, { "case": "FTC v. Easy Healthcare Corporation (Premom)", "year": 2023, "url": "https://www.ftc.gov/legal-library/browse/cases-proceedings/192-3160-easy-healthcare-corporation", "relevance": "$200,000 civil penalty plus permanent injunction for sharing fertility-app user data with Google, AppsFlyer, and two Chinese analytics firms via SDKs after representing the data would be kept private. First FTC matter under the Health Breach Notification Rule (16 CFR Part 318) for tracking-technology disclosures." }, { "case": "In re Vizio, Inc., Consumer Privacy Litigation", "year": 2017, "url": "https://www.courtlistener.com/docket/4499884/in-re-vizio-inc-consumer-privacy-litigation/", "relevance": "$2.2M FTC + NJ AG settlement for Vizio smart-TV ACR (automatic content recognition) data collection without consent. Foundational case for tracking-technology consent and one of the first VPPA-adjacent FTC enforcement matters in the connected-device space." }, { "case": "Doe v. Meta Platforms, Inc.", "year": 2023, "url": "https://www.courtlistener.com/docket/64158687/doe-v-meta-platforms-inc/", "relevance": "Multidistrict litigation consolidating class-action claims that the Meta Pixel deployed on healthcare provider websites (including UCSF, Hopkins, and dozens of hospital systems) transmitted protected health information to Meta in violation of HIPAA, CMIA, VPPA, ECPA, and state-law privacy torts. Driving force behind HHS OCR's December 2022 / March 2024 tracking-technology guidance." } ], "further_reading": { "bgb_articles": [ "Cal. Civ. Code § 1798.135 — CCPA Do Not Sell or Share / Limit Use Links", "Cal. Civ. Code § 1798.140(ad)-(ah) — CCPA Sale and Share Definitions", "Cal. Civ. Code § 1798.121 — CCPA Sensitive Personal Information", "11 CCR § 7012 — CCPA Notice at Collection", "11 CCR § 7015 — Your Privacy Choices Link", "11 CCR § 7025 — Opt-Out Preference Signals", "11 CCR § 7026 — Methods for Submitting Opt-Out Requests", "11 CCR § 7004 — Dark Patterns", "Colo. Rev. Stat. § 6-1-1306 — Colorado UOOM Recognition", "Conn. Gen. Stat. § 42-520 — Connecticut UOOM Recognition", "18 USC § 2710 — Video Privacy Protection Act", "18 USC § 2511 — ECPA / Federal Wiretap Act", "Cal. Penal Code § 631 — California Invasion of Privacy Act", "16 CFR § 312.4 — COPPA Notice and Verifiable Parental Consent", "16 CFR Part 318 — FTC Health Breach Notification Rule", "45 CFR §§ 164.500-534 — HIPAA Privacy Rule", "15 USC § 45 — FTC Act § 5" ], "chaindoc_blog": [ "https://chaindoc.io/blog/legal-strength-blockchain-e-signatures" ] }, "lastVerified": "2026-05-10", "confidence": "high", "validationConflicts": [] }, { "type": "dpa", "name": "Data Processing Agreement", "name_de": "Data Processing Agreement", "category": "b2b-commercial", "schema_version": 1, "form_requirement": { "base": "electronic", "bgb_ref": "Cal. Civ. Code § 1798.140(ag); 11 CCR § 7051; Va. Code § 59.1-579; Colo. Rev. Stat. § 6-1-1305(5); CGS § 42-520; Reg. (EU) 2016/679 Art. 28(3)", "alternatives": [ "free" ], "notes": "Written contract required by every controller-processor statute (CCPA / CPRA, VCDPA, CPA, CTDPA, UCPA, TDPSA, OCPA, etc.) and by GDPR Article 28(3). ESIGN / UETA and eIDAS permit electronic execution; market standard is electronic signature. Verbal or implied processing arrangements are non-compliant and collapse the processor status — under CCPA the recipient is recharacterised as a 'third party' and the disclosure becomes a 'sale' or 'share' triggering opt-out and downstream liability." }, "required_clauses": [ { "id": "definitions", "name": "Definitions", "name_de": "Definitions", "mandatory": true, "bgb_ref": "Cal. Civ. Code § 1798.140; Reg. (EU) 2016/679 Art. 4", "notes": "Personal Data / Personal Information, Processing, Controller / Business, Processor / Service Provider, Sub-processor, Data Subject / Consumer, Personal Data Breach, Special Categories / Sensitive Personal Information, Supervisory Authority, Restricted Transfer. Tracking statutory definitions across regimes avoids scope disputes." }, { "id": "scope_nature_purpose", "name": "Scope, Nature, and Purpose of Processing", "name_de": "Scope, Nature, and Purpose of Processing", "mandatory": true, "bgb_ref": "Reg. (EU) 2016/679 Art. 28(3); 11 CCR § 7051(a)", "notes": "Subject matter, duration, nature and purpose of processing, type of personal data, categories of data subjects. Annex I of the 2021 SCCs format works well — single annex serves both GDPR and US state-law requirements. Specify business purposes per CCPA service-provider regulations." }, { "id": "documented_instructions", "name": "Processing on Documented Instructions", "name_de": "Processing on Documented Instructions", "mandatory": true, "bgb_ref": "Reg. (EU) 2016/679 Art. 28(3)(a); Cal. Civ. Code § 1798.140(ag)(1)(A)", "notes": "Processor processes personal data only on the controller's documented instructions, including with regard to international transfers. Processor must notify the controller if an instruction infringes applicable data-protection law." }, { "id": "prohibition_on_selling_combining", "name": "Prohibition on Selling, Sharing, and Combining (CCPA Service-Provider)", "name_de": "Prohibition on Selling, Sharing, and Combining (CCPA Service-Provider)", "mandatory": true, "bgb_ref": "Cal. Civ. Code § 1798.140(ag); 11 CCR § 7051(a)", "notes": "REQUIRED for CCPA / CPRA service-provider qualification. Prohibit (1) selling or sharing personal information, (2) retention/use/disclosure outside the specified business purposes, (3) retention/use/disclosure for any commercial purpose other than business purposes, (4) combining personal information received with personal information from any other source (subject to permitted exceptions for fraud prevention and service delivery). Failure recharacterises the recipient as a 'third party' and the disclosure as a 'sale.'" }, { "id": "confidentiality", "name": "Confidentiality of Personnel", "name_de": "Confidentiality of Personnel", "mandatory": true, "bgb_ref": "Reg. (EU) 2016/679 Art. 28(3)(b); Colo. Rev. Stat. § 6-1-1305(5)(a)", "notes": "Persons authorised to process personal data committed to confidentiality (NDAs, training). Colorado, Virginia, Connecticut, and most other state laws make this an express requirement." }, { "id": "security_toms", "name": "Security — Technical and Organisational Measures", "name_de": "Security — Technical and Organisational Measures", "mandatory": true, "bgb_ref": "Reg. (EU) 2016/679 Art. 28(3)(c), Art. 32; Cal. Civ. Code § 1798.100(e)", "notes": "TOMs schedule annexed. Tracks Article 32 GDPR: pseudonymisation and encryption, ongoing confidentiality/integrity/availability/resilience, restoration after incident, regular testing of effectiveness. Reference certifications maintained (SOC 2 Type II, ISO 27001 / 27701, HITRUST CSF, FedRAMP). CCPA requires 'reasonable security' — typically read against NIST CSF, CIS Controls, ISO 27001." }, { "id": "sub_processors", "name": "Sub-Processor Engagement", "name_de": "Sub-Processor Engagement", "mandatory": true, "bgb_ref": "Reg. (EU) 2016/679 Art. 28(2), 28(4); 11 CCR § 7051(d); Va. Code § 59.1-579", "notes": "Prior specific or general written authorisation. General authorisation pattern: published sub-processor list + notification of changes + controller right of objection + termination remedy on unresolved objection. Sub-processor bound by written contract with obligations no less protective; processor remains liable to controller for sub-processor compliance." }, { "id": "data_subject_rights_assistance", "name": "Data Subject / Consumer Rights Assistance", "name_de": "Data Subject / Consumer Rights Assistance", "mandatory": true, "bgb_ref": "Reg. (EU) 2016/679 Art. 28(3)(e); Cal. Civ. Code §§ 1798.105, 1798.106, 1798.110, 1798.115, 1798.120, 1798.121", "notes": "Processor assists controller in responding to access, deletion, correction, portability, opt-out of sale/sharing, limit-use of sensitive personal information, and other rights requests. Specify response timelines aligned with controller's 30-45 day statutory windows." }, { "id": "breach_notification", "name": "Personal Data Breach Notification", "name_de": "Personal Data Breach Notification", "mandatory": true, "bgb_ref": "Reg. (EU) 2016/679 Art. 28(3)(f), Art. 33", "notes": "Processor notifies controller of personal data breach without undue delay after awareness; market practice is 24-48 hours (controller has 72 hours to notify supervisory authority under Art. 33). Notification contents track Art. 33(3): nature of breach, categories and approximate number of data subjects and records, likely consequences, measures taken or proposed. Cooperation with investigation and remediation." }, { "id": "dpia_assistance", "name": "DPIA and Prior Consultation Assistance", "name_de": "DPIA and Prior Consultation Assistance", "mandatory": true, "bgb_ref": "Reg. (EU) 2016/679 Art. 28(3)(f), Art. 35, Art. 36", "notes": "Processor assists controller with data-protection impact assessments and prior consultations with supervisory authorities, taking into account the nature of processing and information available to the processor." }, { "id": "cross_border_transfers", "name": "Cross-Border Transfer Mechanism", "name_de": "Cross-Border Transfer Mechanism", "mandatory": true, "bgb_ref": "Reg. (EU) 2016/679 Art. 44-50; Commission Implementing Decision (EU) 2021/914; Commission Implementing Decision (EU) 2023/1795", "notes": "Standard Contractual Clauses 2021 (Module 2: C2P, or Module 3: P2P for sub-processor flows) incorporated by reference. Where DPF certification relied upon, controller confirmation of active DPF self-certification with Department of Commerce. Transfer Impact Assessment per Schrems II (C-311/18); supplementary measures (encryption with controller keys, pseudonymisation, contractual government-access challenge commitments)." }, { "id": "audit_rights", "name": "Audit and Information Rights", "name_de": "Audit and Information Rights", "mandatory": true, "bgb_ref": "Reg. (EU) 2016/679 Art. 28(3)(h); 11 CCR § 7051(e); Va. Code § 59.1-579(B)(7)", "notes": "Processor makes available all information necessary to demonstrate compliance, and allows for / contributes to audits, including inspections. Market practice: SOC 2 Type II report annually under NDA; on-site audit reserved for documented breach or material non-compliance, once per year, controller expense unless material findings. Penetration-test summaries; SIG / CAIQ questionnaires." }, { "id": "deletion_or_return", "name": "Deletion or Return at End of Processing", "name_de": "Deletion or Return at End of Processing", "mandatory": true, "bgb_ref": "Reg. (EU) 2016/679 Art. 28(3)(g); Va. Code § 59.1-579(B)(4); Colo. Rev. Stat. § 6-1-1305(5)(b)", "notes": "At choice of controller, processor deletes or returns all personal data at end of provision of services and deletes existing copies, unless retention required by law. Certified destruction (NIST SP 800-88 Clear / Purge / Destroy). Compliance-archive carve-out typical with continuing protections." } ], "optional_clauses": [ { "id": "baa_precedence", "name": "HIPAA BAA Precedence", "name_de": "HIPAA BAA Precedence", "bgb_ref": "45 CFR § 164.504(e)", "notes": "Where processed data is PHI, separate BAA required. DPA references the BAA and provides that BAA controls for PHI handling. See /handbook/us/compliance/hipaa-baa/." }, { "id": "glba_flow_down", "name": "GLBA Safeguards Rule Flow-Down", "name_de": "GLBA Safeguards Rule Flow-Down", "bgb_ref": "16 CFR Part 314; 15 USC §§ 6801-6809", "notes": "Where processed data is non-public personal information of consumers of a financial institution, processor complies with the FTC Safeguards Rule (16 CFR Part 314) and aligns with the financial institution's information-security program." }, { "id": "coppa_flow_down", "name": "COPPA Flow-Down", "name_de": "COPPA Flow-Down", "bgb_ref": "15 USC §§ 6501-6506; 16 CFR Part 312", "notes": "Where data subjects are children under 13, processor complies with COPPA requirements: verifiable parental consent prerequisites, no retention beyond necessary period, prohibition on conditioning service on more information than reasonably necessary." }, { "id": "ftc_section_5_alignment", "name": "FTC Section 5 Alignment", "name_de": "FTC Section 5 Alignment", "bgb_ref": "15 USC § 45", "notes": "Processor's representations and practices must align with the controller's privacy notice; misalignment creates FTC § 5 deception exposure for the controller." }, { "id": "liability_super_cap", "name": "Super-Cap / Uncapped Liability for Privacy Breaches", "name_de": "Super-Cap / Uncapped Liability for Privacy Breaches", "notes": "Standard architecture preserves MSA liability cap except for (a) breach of confidentiality and security, (b) breach of cross-border transfer obligations, (c) indemnification for regulatory penalties and data-subject claims. Super-cap (3×-10× annual fees) or uncapped treatment reflects asymmetric financial exposure (mass-notification, regulatory penalties, third-party claims)." }, { "id": "indemnification", "name": "Indemnification for Regulatory Penalties and Third-Party Claims", "name_de": "Indemnification for Regulatory Penalties and Third-Party Claims", "notes": "Mutual indemnification allocated by root cause: processor breach of TOMs or unauthorised processing = processor indemnifies; controller unlawful instructions or invalid consent = controller indemnifies. Coverage includes regulatory penalties, data-subject claims, notification costs, forensic and credit-monitoring costs." }, { "id": "cyber_insurance", "name": "Cyber Liability Insurance", "name_de": "Cyber Liability Insurance", "typical": "Cyber liability $5M-$25M depending on data volume and sensitivity", "notes": "First-party breach response + third-party liability coverage. Certificate of insurance on engagement and annually." }, { "id": "regulatory_change", "name": "Regulatory Change Amendment", "name_de": "Regulatory Change Amendment", "notes": "Parties agree to amend DPA as necessary to reflect subsequent amendments to applicable data-protection laws (new state privacy statutes, supervisory-authority guidance, new SCCs, new adequacy decisions)." }, { "id": "governing_law_forum", "name": "Governing Law and Forum", "name_de": "Governing Law and Forum", "notes": "Subject to underlying agreement governing law. 2021 SCCs governed by an EU Member State law per Clause 17. See /handbook/us/foundation/standard-clauses/ for the broader architecture." } ], "court_cases": [ { "case": "Data Protection Commissioner v. Facebook Ireland & Schrems (Schrems II)", "year": 2020, "url": "https://curia.europa.eu/juris/liste.jsf?num=C-311/18", "relevance": "CJEU judgment of 16 July 2020. Invalidated the EU-US Privacy Shield adequacy decision. Held the 2010 Standard Contractual Clauses valid but conditioned reliance on a Transfer Impact Assessment of the importing country's surveillance laws; where law does not provide equivalent protection, parties must implement supplementary measures (technical, contractual, organisational). Case C-311/18." }, { "case": "Schrems v. Data Protection Commissioner (Schrems I)", "year": 2015, "url": "https://curia.europa.eu/juris/liste.jsf?num=C-362/14", "relevance": "CJEU judgment of 6 October 2015. Invalidated the EU-US Safe Harbor adequacy decision. Established that national supervisory authorities can examine the adequacy of third-country protection notwithstanding a Commission adequacy decision. Foundation for the modern transfer-mechanism analysis. Case C-362/14." }, { "case": "Sephora — California Attorney General Settlement", "year": 2022, "url": "https://oag.ca.gov/news/press-releases/attorney-general-bonta-announces-settlement-sephora-part-ongoing-enforcement", "relevance": "$1.2 million CCPA settlement — first major CCPA enforcement action by the California AG. Findings included failure to disclose 'sale' of personal information to third-party analytics and advertising providers, and failure to honor user-enabled global privacy controls (Global Privacy Control). Illustrates that the absence of qualifying service-provider contracts recharacterises analytics/advertising disclosures as 'sales' subject to opt-out." } ], "further_reading": { "bgb_articles": [ "Cal. Civ. Code § 1798.140 — CCPA / CPRA definitions", "Cal. Civ. Code § 1798.100 — CCPA general duties of business", "11 CCR §§ 7050-7053 — CPPA service-provider / contractor regulations", "Va. Code § 59.1-579 — VCDPA controller-processor contracts", "Colo. Rev. Stat. § 6-1-1305 — Colorado Privacy Act", "CGS § 42-520 — Connecticut Data Privacy Act", "Regulation (EU) 2016/679 — GDPR (Articles 28, 32, 33, 35, 44-50)", "Commission Implementing Decision (EU) 2021/914 — 2021 SCCs", "Commission Implementing Decision (EU) 2023/1795 — EU-US DPF Adequacy Decision", "Case C-311/18 Schrems II (CJEU 2020)", "Case C-362/14 Schrems I (CJEU 2015)", "16 CFR Part 314 — GLBA Safeguards Rule", "16 CFR Part 312 — COPPA Rule", "15 USC § 45 — FTC Act § 5", "EDPB Guideline 07/2020 — Concepts of controller and processor" ], "chaindoc_blog": [ "https://chaindoc.io/blog/legal-strength-blockchain-e-signatures" ] }, "lastVerified": "2026-05-10", "confidence": "high", "validationConflicts": [] }, { "type": "employment-agreement", "name": "Employment Agreement", "name_de": "Employment Agreement", "category": "employment", "schema_version": 1, "form_requirement": { "base": "free", "bgb_ref": "R2K § 17 (Statute of Frauds) generally inapplicable; 29 USC § 213 (FLSA); 42 USC § 2000e (Title VII)", "alternatives": [ "electronic" ], "notes": "No federal Statute of Frauds covers employment by subject matter unless the contract is by its terms not performable within one year (R2K § 130). At-will employment is presumed in 49 states; Montana is the lone exception (Mont. Code § 39-2-901, Wrongful Discharge from Employment Act). Writing is universal practice for evidentiary reasons and to satisfy state-specific wage-theft notice obligations (Cal. Lab. Code § 2810.5; NY Lab. Law § 195.1; MA wage notice). I-9 (employment eligibility verification) is mandatory within three business days of start (8 USC § 1324a). Form W-4 and state withholding forms are tax-administrative rather than contractual." }, "required_clauses": [ { "id": "parties", "name": "Parties", "name_de": "Parties", "mandatory": true, "notes": "Employer legal entity (state of incorporation, principal place of business) and employee (legal name, residential address). For multi-entity groups, identify the specific employing entity — payroll, benefits eligibility, and PEO arrangements depend on it." }, { "id": "position_and_duties", "name": "Position, Title, and Duties", "name_de": "Position, Title, and Duties", "mandatory": true, "guidance": "Title, reporting relationship, duties (often by reference to a job description). Reservation of right to modify duties consistent with at-will status. Avoid promissory language about scope ('you will be responsible for X') which may create implied-contract claims under Toussaint v. Blue Cross Blue Shield of Michigan, 408 Mich. 579 (1980)." }, { "id": "compensation", "name": "Compensation", "name_de": "Compensation", "mandatory": true, "bgb_ref": "29 USC § 206 (minimum wage); 29 USC § 207 (overtime); 29 USC § 213 (exemptions)", "notes": "Base salary stated as a rate ('$X per year, payable in accordance with Company's regular payroll practices') rather than as an annual amount, to avoid implied one-year-promise reading. Bonus eligibility (target + discretionary disclaimer). FLSA exempt-vs-non-exempt classification under 29 USC § 213 with salary-basis test and duties test. DOL 2024 salary threshold ($43,888 effective July 2024, scheduled increase to $58,656 January 2025) was vacated nationwide by the Eastern District of Texas in State of Texas v. DOL (November 2024); the pre-2024 threshold of $35,568 controls pending appeal." }, { "id": "benefits_and_pto", "name": "Benefits and Paid Time Off", "name_de": "Benefits and Paid Time Off", "mandatory": true, "notes": "Benefits described as 'eligibility for Company benefit plans as in effect from time to time' rather than guaranteed benefits — preserves Company's right to change plans (ERISA § 502(a)(1)(B) governs vested benefits only). PTO/vacation policy reference; state-specific accrual and pay-on-termination rules (e.g., California requires payout of accrued unused vacation at termination, Lab. Code § 227.3)." }, { "id": "at_will_or_term", "name": "At-Will Employment (or Term)", "name_de": "At-Will Employment (or Term)", "mandatory": true, "guidance": "Conspicuous at-will disclaimer for at-will employment: 'Employment is at-will and may be terminated by either party at any time, with or without cause and with or without notice. Nothing in this Agreement creates a contract of employment for any specific duration.' Modification only by writing signed by an authorized officer. Implied-contract exception (Toussaint, Michigan) and implied-covenant-of-good-faith exception (Foley v. Interactive Data, 47 Cal. 3d 654 (1988)) both narrowed by clear at-will language. Montana fixed-term contracts permitted under Mont. Code § 39-2-901." }, { "id": "termination", "name": "Termination", "name_de": "Termination", "mandatory": true, "notes": "Procedure for termination by either party; definition of 'Cause' (typical: material breach, gross negligence, willful misconduct, conviction of felony, material policy violation) and 'Good Reason' (typical for executive contracts: material reduction in salary/duties, relocation > X miles); severance (if any) and conditions (release of claims, compliance with restrictive covenants); WARN Act notice (29 USC § 2101) — 60 days for plant closing or mass layoff (≥50 employees), with mini-WARN states (CA Cal-WARN, NY WARN, NJ WARN) imposing additional triggers." }, { "id": "ip_assignment_and_inventions", "name": "IP Assignment and Inventions", "name_de": "IP Assignment and Inventions", "mandatory": true, "bgb_ref": "17 USC §§ 101, 201, 204; Cal. Lab. Code §§ 2870-2872", "notes": "Work-for-hire recital plus backup present assignment of all rights ('Employee hereby assigns'). For employees, 17 USC § 201(b) work-for-hire operates within scope of employment, so backup assignment less critical than for contractors — but standard. Prior-inventions schedule (Exhibit A). State carve-outs: Cal. Lab. Code § 2870 (and analogous Delaware, Illinois, Kansas, Minnesota, North Carolina, Utah, Washington statutes) excludes inventions developed on employee's own time without employer resources unrelated to employer business; § 2872 requires written notice of the carve-out." }, { "id": "confidentiality", "name": "Confidentiality (with DTSA Notice)", "name_de": "Confidentiality (with DTSA Notice)", "mandatory": true, "bgb_ref": "18 USC § 1833(b); 18 USC § 1836", "notes": "Confidentiality of trade secrets and proprietary information. MUST include DTSA whistleblower-immunity notice (18 USC § 1833(b)) to preserve exemplary damages and attorneys' fees under 18 USC § 1836(b)(3)(D). SEC Rule 21F-17 and NLRA Section 7 carve-outs required for employees (SEC has fined Activision Blizzard $35M (2023), Anheuser-Busch InBev $6M (2016), and BlackRock $340K (2016) for non-compliant restrictive covenants). Speak Out Act (2022) and state-NDA bans (Cal. Code Civ. P. § 1001 'STAND Act'; NY Gen. Oblig. Law § 5-336) further constrain harassment-related NDAs." }, { "id": "post_termination_obligations", "name": "Post-Termination Obligations", "name_de": "Post-Termination Obligations", "mandatory": true, "notes": "Continuing confidentiality, return of property, cooperation in litigation, non-disparagement (subject to Speak Out Act and state limits), non-solicitation of employees and customers. Non-compete only where enforceable (see /handbook/us/employment/non-compete/). Garden leave alternative in MA (M.G.L. c. 149 § 24L) and increasingly in private executive agreements." }, { "id": "governing_law_and_dispute_resolution", "name": "Governing Law and Dispute Resolution", "name_de": "Governing Law and Dispute Resolution", "mandatory": true, "bgb_ref": "9 USC § 2 (FAA); Cal. Lab. Code § 925", "notes": "Choice of law and forum. California voids out-of-state choice-of-law and forum-selection clauses for California-resident employees (Cal. Lab. Code § 925, except where employee was individually represented by counsel). Arbitration of employment disputes generally enforceable post-Epic Systems v. Lewis, 138 S. Ct. 1612 (2018); class-action waivers enforceable under FAA. California Private Attorneys General Act (PAGA) claims subject to Viking River Cruises v. Moriana, 596 U.S. 639 (2022) split-arbitration rules. EFAA (9 USC § 402, 2022) voids pre-dispute arbitration of sexual-harassment and sexual-assault claims at the employee's election." } ], "optional_clauses": [ { "id": "signing_bonus", "name": "Signing Bonus / Sign-On Bonus", "name_de": "Signing Bonus / Sign-On Bonus", "typical": "Pro-rata clawback over 12-24 months", "notes": "Pro-rata clawback if employee resigns without Good Reason or is terminated for Cause within the clawback period. Enforceable in most states; California treats clawback as wage deduction subject to Lab. Code § 224 limits." }, { "id": "equity", "name": "Equity Grant", "name_de": "Equity Grant", "notes": "Reference to separate Stock Option Agreement or RSU Agreement, subject to board approval and the governing equity plan. Vesting (typical 4-year with 1-year cliff). Acceleration on change-of-control (single-trigger or double-trigger). 90-day post-termination exercise window for options is standard; ISO qualifying status (IRC § 422) requires exercise within 3 months of termination." }, { "id": "change_of_control", "name": "Change of Control Protections", "name_de": "Change of Control Protections", "notes": "Double-trigger severance and accelerated vesting on change of control plus termination without Cause or resignation for Good Reason within 12-24 months. Section 280G golden-parachute analysis (IRC § 280G) and gross-up or best-net election. Section 409A compliance for any deferred payments (IRC § 409A)." }, { "id": "section_409a", "name": "Section 409A Compliance", "name_de": "Section 409A Compliance", "bgb_ref": "IRC § 409A", "notes": "Severance and deferred-comp payments structured to qualify for short-term deferral exception (paid within 2.5 months of year following separation) or separation pay safe harbor (2x max comp, paid within 24 months, capped at 2x IRS Section 401(a)(17) limit). Specified-employee 6-month delay for public-company key employees." }, { "id": "expense_reimbursement", "name": "Expense Reimbursement", "name_de": "Expense Reimbursement", "notes": "Business expenses reimbursed per Company policy. State-mandatory reimbursement: California (Lab. Code § 2802 — necessary expenses including cell phone, home internet for remote work), Illinois (820 ILCS 115/9.5), Massachusetts, Montana, New Hampshire, North Dakota, South Dakota, District of Columbia, Iowa, New York (Lab. Law § 198-c)." }, { "id": "remote_work", "name": "Remote Work / Workplace", "name_de": "Remote Work / Workplace", "notes": "Primary work location; remote-work permission and any required schedule. Tax-nexus implications: employee work in a state can create employer-side state income-tax withholding, unemployment insurance, and workers'-comp obligations. Convenience-of-the-employer rule in NY, CT, DE, NE, PA — non-resident remote workers taxed as if working in employer's state." }, { "id": "indemnification_and_d_o", "name": "Indemnification and D&O Coverage", "name_de": "Indemnification and D&O Coverage", "notes": "For officers and senior executives: indemnification under Delaware General Corporation Law § 145 (or applicable state corporate statute) plus separate indemnification agreement; D&O insurance coverage. Tail coverage (Side A DIC) on departure." } ], "forbidden_in_agb": [ { "clause_id": "harassment_nda_pre_dispute", "name_de": "Pre-Dispute NDA Covering Sexual Harassment", "bgb_ref": "Speak Out Act (2022); Cal. Code Civ. P. § 1001", "consequence": "Pre-dispute non-disclosure and non-disparagement provisions covering sexual harassment and sexual assault are unenforceable under the Speak Out Act (Pub. L. 117-224). California's STAND Act (Cal. Code Civ. P. § 1001) extends the void to discrimination and retaliation claims. New York (Gen. Oblig. Law § 5-336), New Jersey (N.J.S.A. 10:5-12.8), Washington (RCW 49.44.210) impose similar bans." }, { "clause_id": "pre_dispute_arbitration_harassment", "name_de": "Pre-Dispute Arbitration of Sexual Harassment Claims", "bgb_ref": "9 USC §§ 401-402 (EFAA, 2022)", "consequence": "Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021 (9 USC §§ 401-402) gives employees a unilateral right to void pre-dispute arbitration agreements as to sexual-harassment and sexual-assault claims. Class-action waivers in the same dispute also voidable at employee's election." }, { "clause_id": "wage_waiver", "name_de": "Waiver of FLSA Minimum Wage or Overtime", "bgb_ref": "29 USC §§ 206, 207; Brooklyn Savings Bank v. O'Neil, 324 U.S. 697 (1945)", "consequence": "FLSA rights to minimum wage and overtime cannot be waived prospectively by private agreement. Settlements require DOL or court approval (Lynn's Food Stores v. United States, 679 F.2d 1350 (11th Cir. 1982))." }, { "clause_id": "noncompete_california", "name_de": "Non-Compete on California Employee", "bgb_ref": "Cal. Bus. & Prof. Code §§ 16600-16600.5; Edwards v. Arthur Andersen, 44 Cal. 4th 937 (2008)", "consequence": "Void per se under Cal. B&P § 16600. 2024 amendments (§§ 16600.1-16600.5) extend void status to out-of-state non-competes covering California-resident employees and create employer notice obligations and civil penalties." }, { "clause_id": "ban_box_violation", "name_de": "Pre-Offer Criminal History Inquiry", "bgb_ref": "EEOC Enforcement Guidance (2012); state ban-the-box statutes", "consequence": "Approximately 37 states and 150+ localities prohibit criminal-history inquiry before a conditional offer (e.g., Cal. Lab. Code § 432.9, Cal. Gov. Code § 12952 (Cal. Fair Chance Act); NY Corr. Law § 752; Massachusetts Ch. 6 § 171A). EEOC disparate-impact analysis under Title VII." } ], "court_cases": [ { "case": "Murphy v. American Home Products Corp.", "year": 1983, "url": "https://law.justia.com/cases/new-york/court-of-appeals/1983/58-n-y-2d-293-0.html", "relevance": "New York Court of Appeals refused to recognize a tort of wrongful discharge for at-will employees absent statutory or public-policy basis. Reaffirms the strong at-will presumption in New York. 58 N.Y.2d 293." }, { "case": "Petermann v. International Brotherhood of Teamsters Local 396", "year": 1959, "url": "https://law.justia.com/cases/california/court-of-appeal/2d/174/184.html", "relevance": "Foundational public-policy exception to at-will employment — employer could not terminate employee for refusing to commit perjury before a legislative committee. 174 Cal. App. 2d 184." }, { "case": "Toussaint v. Blue Cross & Blue Shield of Michigan", "year": 1980, "url": "https://law.justia.com/cases/michigan/supreme-court/1980/60792-3.html", "relevance": "Implied-contract exception to at-will employment based on oral assurances and employee-handbook just-cause language. Created the modern handbook-disclaimer drafting practice. 408 Mich. 579." }, { "case": "Foley v. Interactive Data Corp.", "year": 1988, "url": "https://law.justia.com/cases/california/supreme-court/3d/47/654.html", "relevance": "California Supreme Court held the implied covenant of good faith and fair dealing in employment contracts sounds in contract, not tort — limiting punitive-damages exposure. Approximately 11 states recognize the covenant in at-will employment. 47 Cal. 3d 654." }, { "case": "Epic Systems Corp. v. Lewis", "year": 2018, "url": "https://www.law.cornell.edu/supremecourt/text/16-285", "relevance": "Federal Arbitration Act preempts NLRA Section 7 challenges to class-action waivers in employment arbitration agreements. Employer-mandated individual arbitration of wage-and-hour claims is enforceable. 138 S. Ct. 1612." }, { "case": "Viking River Cruises, Inc. v. Moriana", "year": 2022, "url": "https://www.law.cornell.edu/supremecourt/text/20-1573", "relevance": "FAA partially preempts California PAGA — individual PAGA claims arbitrable, but the employee retains standing for representative PAGA claims (a holding the California Supreme Court rejected in Adolph v. Uber Technologies, 14 Cal. 5th 1104 (2023)). 596 U.S. 639." } ], "further_reading": { "bgb_articles": [ "29 USC §§ 201-219 — Fair Labor Standards Act", "29 USC § 213 — FLSA exemptions", "29 USC § 2101 — WARN Act", "29 USC § 621 — Age Discrimination in Employment Act", "42 USC § 2000e — Title VII of the Civil Rights Act of 1964", "42 USC § 12101 — Americans with Disabilities Act", "42 USC § 2000ff — Genetic Information Nondiscrimination Act", "29 USC § 206(d) — Equal Pay Act", "38 USC § 4301 — USERRA", "42 USC § 2000gg — Pregnant Workers Fairness Act (2023)", "8 USC § 1324a — I-9 employment eligibility verification", "IRC § 409A — Deferred compensation", "IRC § 280G — Golden parachute payments", "Mont. Code § 39-2-901 — Wrongful Discharge from Employment Act", "Cal. Lab. Code § 2810.5 — Wage Theft Prevention Act notice", "Cal. Lab. Code § 925 — Choice of law for California employees", "Cal. Lab. Code §§ 2870-2872 — Inventions carve-out" ], "chaindoc_blog": [ "https://chaindoc.io/blog/contract-management-it", "https://chaindoc.io/blog/legal-strength-blockchain-e-signatures" ] }, "lastVerified": "2026-05-10", "confidence": "high", "validationConflicts": [] }, { "type": "hipaa-baa", "name": "HIPAA Business Associate Agreement", "name_de": "HIPAA Business Associate Agreement", "category": "b2b-commercial", "schema_version": 1, "form_requirement": { "base": "electronic", "bgb_ref": "45 CFR § 164.504(e); 45 CFR § 164.502(e); HITECH Act (Pub. L. 111-5)", "alternatives": [ "free" ], "notes": "Written agreement required. HIPAA does not prescribe form (paper or electronic) but the agreement must exist before disclosure of PHI. ESIGN / UETA permit electronic execution; standard market practice for BAAs is electronic signature. Verbal or implied BAAs are non-compliant — the Privacy Rule's 'satisfactory assurances' requirement at 45 CFR § 164.502(e)(1)(ii) is satisfied only by a written contract or other written agreement that meets § 164.504(e)." }, "required_clauses": [ { "id": "definitions", "name": "Definitions", "name_de": "Definitions", "mandatory": true, "bgb_ref": "45 CFR §§ 160.103, 164.103, 164.402, 164.501", "notes": "Incorporate by reference HIPAA definitions of PHI, ePHI, Breach, Security Incident, Subcontractor, Unsecured PHI, Covered Entity, Business Associate. Tracking the regulatory definitions verbatim avoids later disputes about scope." }, { "id": "permitted_uses_and_disclosures", "name": "Permitted Uses and Disclosures of PHI", "name_de": "Permitted Uses and Disclosures of PHI", "mandatory": true, "bgb_ref": "45 CFR § 164.504(e)(2)(i), (e)(4)", "guidance": "Establish the permitted and required uses tied to the underlying services. May not authorise uses or disclosures that would themselves violate the Privacy Rule. Reserve Business Associate's right to use PHI for its own management, administration, and legal responsibilities subject to the reasonable-assurances safeguards at § 164.504(e)(4)(ii)." }, { "id": "prohibited_uses", "name": "Prohibited Uses and Disclosures", "name_de": "Prohibited Uses and Disclosures", "mandatory": true, "bgb_ref": "45 CFR § 164.504(e)(2)(ii)(A)", "notes": "Business Associate must agree not to use or disclose PHI other than as permitted by the BAA or required by law. No sale of PHI without authorization (45 CFR § 164.502(a)(5)(ii)); no use of PHI for marketing without authorization (§ 164.508(a)(3))." }, { "id": "safeguards", "name": "Safeguards", "name_de": "Safeguards", "mandatory": true, "bgb_ref": "45 CFR § 164.504(e)(2)(ii)(B); 45 CFR §§ 164.308, 164.310, 164.312", "notes": "Implement appropriate administrative, physical, and technical safeguards. For ePHI, comply directly with the Security Rule (HITECH § 13401 made the Security Rule directly applicable to Business Associates). Specify encryption (NIST SP 800-111 / FIPS 140-2 / 140-3), access controls, workforce training, audit logging." }, { "id": "breach_and_incident_reporting", "name": "Reporting of Breaches and Security Incidents", "name_de": "Reporting of Breaches and Security Incidents", "mandatory": true, "bgb_ref": "45 CFR § 164.504(e)(2)(ii)(C); 45 CFR § 164.410", "notes": "Notify Covered Entity of any unauthorised use or disclosure. Breach notification within 60 days of discovery is the regulatory maximum; market practice compresses to 5-30 days, often 24-72 hours. Risk-assessment factors at § 164.402(2): nature/extent of PHI, recipient identity, actual acquisition/viewing, mitigation. Document the four-factor analysis even when concluding 'no breach.'" }, { "id": "subcontractor_requirements", "name": "Subcontractor BAA Flow-Down", "name_de": "Subcontractor BAA Flow-Down", "mandatory": true, "bgb_ref": "45 CFR § 164.504(e)(2)(ii)(D); 45 CFR § 164.502(e)(1)(ii)", "notes": "Business Associate must ensure each subcontractor that creates, receives, maintains, or transmits PHI agrees to restrictions and conditions at least as restrictive as those in the upstream BAA. Chain of compliance extends indefinitely downstream. 2013 Omnibus Rule made subcontractor BAAs mandatory." }, { "id": "individual_access", "name": "Individual Right of Access", "name_de": "Individual Right of Access", "mandatory": true, "bgb_ref": "45 CFR § 164.504(e)(2)(ii)(E); 45 CFR § 164.524", "notes": "Make PHI available to enable Covered Entity to comply with individual access requests in the designated record set. Specify response timelines (typically 15-20 days, supporting Covered Entity's 30-day regulatory window)." }, { "id": "individual_amendment", "name": "Amendment of PHI", "name_de": "Amendment of PHI", "mandatory": true, "bgb_ref": "45 CFR § 164.504(e)(2)(ii)(F); 45 CFR § 164.526", "notes": "Make PHI available for amendment and incorporate amendments received from the Covered Entity." }, { "id": "accounting_of_disclosures", "name": "Accounting of Disclosures", "name_de": "Accounting of Disclosures", "mandatory": true, "bgb_ref": "45 CFR § 164.504(e)(2)(ii)(G); 45 CFR § 164.528", "notes": "Maintain disclosure logs sufficient to support the Covered Entity's six-year accounting obligation. Track date, recipient, description, purpose." }, { "id": "hhs_audit_access", "name": "Availability of Records to HHS", "name_de": "Availability of Records to HHS", "mandatory": true, "bgb_ref": "45 CFR § 164.504(e)(2)(ii)(H)", "notes": "Internal practices, books, and records relating to use and disclosure of PHI must be available to the Secretary of HHS to determine the Covered Entity's compliance with HIPAA." }, { "id": "return_or_destruction", "name": "Return or Destruction at Termination", "name_de": "Return or Destruction at Termination", "mandatory": true, "bgb_ref": "45 CFR § 164.504(e)(2)(ii)(J)", "notes": "Return or destroy all PHI received from or created or received on behalf of Covered Entity at termination; retain no copies. If return or destruction is infeasible, extend BAA protections to retained PHI and limit further uses to those that make return or destruction infeasible. Specify destruction standard (NIST SP 800-88 Clear / Purge / Destroy for media)." }, { "id": "termination_for_breach", "name": "Termination for Material Breach", "name_de": "Termination for Material Breach", "mandatory": true, "bgb_ref": "45 CFR § 164.504(e)(2)(iii)", "notes": "Covered Entity must have the right to terminate the BAA and the underlying services agreement on material breach by the Business Associate. If cure is feasible, opportunity to cure (typically 30 days). Where termination is infeasible, Covered Entity must report the breach to HHS." } ], "optional_clauses": [ { "id": "state_law_flow_down", "name": "State Law Flow-Down", "name_de": "State Law Flow-Down", "bgb_ref": "45 CFR § 160.203", "notes": "HIPAA preempts contrary state law unless state law is more stringent. Cal. CMIA, Tex. Med. Records Privacy Act, N.Y. SHIELD Act impose additional obligations. BAA should require Business Associate to comply with applicable state privacy/security laws." }, { "id": "indemnification", "name": "Indemnification", "name_de": "Indemnification", "notes": "Mutual indemnification for HIPAA violations, breach-notification costs, OCR penalties, and third-party claims. Super-cap or uncapped treatment for breach of confidentiality and security. HIPAA breach-notification costs (mailing, credit-monitoring, call-centre, forensics) routinely run $200-$300 per affected individual." }, { "id": "cyber_insurance", "name": "Cyber Liability Insurance", "name_de": "Cyber Liability Insurance", "typical": "Cyber liability $5M-$25M; tech E&O $2M-$10M; depending on PHI volume", "notes": "Cyber liability covers first-party breach response (notification, forensics, credit monitoring) and third-party liability (regulatory defence, third-party claims). Certificate of insurance on engagement and annually." }, { "id": "audit_rights", "name": "Audit and Assessment Rights", "name_de": "Audit and Assessment Rights", "notes": "Annual SOC 2 Type II report (Security and Confidentiality criteria); right of independent third-party audit on reasonable notice; HITRUST CSF certification increasingly required by hospital systems and payers. Penetration test summaries quarterly or annually." }, { "id": "information_blocking", "name": "Information Blocking Compliance", "name_de": "Information Blocking Compliance", "bgb_ref": "45 CFR Part 171; 21st Century Cures Act Pub. L. 114-255", "notes": "For EHR, health information exchange, and certified health-IT engagements. Compliance with the eight information-blocking exceptions (privacy, security, infeasibility, health-IT performance, content and manner, fees, licensing, manner)." }, { "id": "amendment_to_reflect_regulatory_change", "name": "Regulatory Change Amendment", "name_de": "Regulatory Change Amendment", "notes": "Parties agree to amend the BAA from time to time as necessary to comply with subsequent amendments to HIPAA, HITECH, or implementing regulations. Avoids each regulatory update requiring new contract negotiation." }, { "id": "governing_law_forum", "name": "Governing Law and Forum", "name_de": "Governing Law and Forum", "notes": "See /handbook/us/foundation/standard-clauses/ for the full architecture. HIPAA is federal; state law typically governs the contract dispute." } ], "court_cases": [ { "case": "Anthem Inc. — HHS OCR Resolution Agreement", "year": 2018, "url": "https://www.hhs.gov/hipaa/for-professionals/compliance-enforcement/agreements/anthem/index.html", "relevance": "$16 million settlement — largest HIPAA settlement to date — following 2015 cyberattack exposing ePHI of approximately 79 million individuals. OCR findings: failure to conduct enterprise-wide risk analysis, insufficient procedures to regularly review system activity, failure to identify and respond to suspected security incident, failure to implement adequate minimum-access controls." }, { "case": "Premera Blue Cross — HHS OCR Resolution Agreement", "year": 2020, "url": "https://www.hhs.gov/hipaa/for-professionals/compliance-enforcement/agreements/premera/index.html", "relevance": "$6.85 million settlement following 2014 cyberattack affecting 10.4 million individuals. OCR cited deficient risk analysis, risk management, audit-controls, and contingency-planning practices. Illustrates HITECH-era direct enforcement against insurer and the cascading liability through BAA chains." }, { "case": "Memorial Healthcare System — HHS OCR Resolution Agreement", "year": 2017, "url": "https://www.hhs.gov/hipaa/for-professionals/compliance-enforcement/agreements/memorial/index.html", "relevance": "$5.5 million settlement for impermissible access to over 115,000 patient records by employees and a former employee of an affiliated physician practice. Failure to terminate user access in a timely manner and to regularly review system access logs. Illustrates 'minimum necessary' and access-management requirements that flow into BAA safeguard obligations." } ], "further_reading": { "bgb_articles": [ "45 CFR Part 160 — General administrative requirements", "45 CFR Part 164 Subpart A — General provisions", "45 CFR Part 164 Subpart C — Security standards (Security Rule)", "45 CFR Part 164 Subpart D — Breach Notification Rule (§§ 164.400-414)", "45 CFR Part 164 Subpart E — Privacy Rule (uses and disclosures)", "45 CFR § 164.504(e) — Business Associate contract required terms", "42 USC § 1320d-5 — HIPAA civil money penalties", "42 USC § 1320d-6 — Wrongful disclosure of PHI (criminal)", "42 USC § 17934 — HITECH § 13404 (BA direct liability)", "45 CFR Part 171 — ONC Information Blocking Rule", "HIPAA — Pub. L. 104-191 (1996)", "HITECH Act — Pub. L. 111-5 Title XIII (2009)" ], "chaindoc_blog": [ "https://chaindoc.io/blog/legal-strength-blockchain-e-signatures" ] }, "lastVerified": "2026-05-10", "confidence": "high", "validationConflicts": [] }, { "type": "independent-contractor", "name": "Independent Contractor Agreement", "name_de": "Independent Contractor Agreement", "category": "b2b-commercial", "schema_version": 1, "form_requirement": { "base": "free", "bgb_ref": "R2K § 110; UCC § 2-201 N/A. Cal. Labor Code § 2776 requires written contract for B2B exemption from ABC test", "alternatives": [ "electronic" ], "notes": "No federal Statute of Frauds applies, but a written contract is operationally essential for misclassification defense and is statutorily required under California's B2B exemption (Cal. Labor Code § 2776). 17 USC § 204(a) requires copyright assignments to be in writing, making the IP-assignment clause's effectiveness contingent on a signed instrument. Universal practice is written execution per ESIGN/UETA." }, "required_clauses": [ { "id": "independent_contractor_recital", "name": "Independent Contractor Recital", "name_de": "Independent Contractor Recital", "mandatory": true, "notes": "Contractor is independent contractor, not employee/agent/partner/joint venturer. Not decisive of classification under IRS common-law test, FLSA economic-realities test, or state ABC test — but operates as 'stated intent' factor under each. Must be consistent with substantive provisions (no withholding, no benefits, contractor tools, multiple clients permitted)." }, { "id": "scope_and_deliverables", "name": "Scope and Deliverables", "name_de": "Scope and Deliverables", "mandatory": true, "guidance": "Define result/output, not manner-and-means of performance. Excessive instruction on 'how' tilts IRS common-law test toward employee status." }, { "id": "fees_and_payment", "name": "Fees and Payment", "name_de": "Fees and Payment", "mandatory": true, "notes": "Project-based or milestone-based fees more consistent with IC status than hourly billing. Net 30 typical. No tax withholding; contractor responsible for own tax remittance." }, { "id": "term_and_termination", "name": "Term and Termination", "name_de": "Term and Termination", "mandatory": true, "notes": "Defined start and end date or specific project completion. Open-ended engagements without clear termination inconsistent with IC status. Termination for cause + termination for convenience (notice typical, e.g., 30 days)." }, { "id": "taxes_and_benefits_waiver", "name": "Taxes and Benefits Waiver", "name_de": "Taxes and Benefits Waiver", "mandatory": true, "bgb_ref": "26 USC § 3401; 29 USC § 203", "notes": "Contractor responsible for all federal/state/local taxes (income, self-employment). Waiver of any claim to employee benefits (health, retirement, paid leave, equity). Note: benefits waiver ineffective if contractor reclassified as employee (Vizcaino v. Microsoft, 120 F.3d 1006 (9th Cir. 1997))." }, { "id": "ownership_of_work_product", "name": "Ownership of Work Product (Work-for-Hire + Backup Assignment)", "name_de": "Ownership of Work Product (Work-for-Hire + Backup Assignment)", "mandatory": true, "bgb_ref": "17 USC §§ 101, 201, 204", "guidance": "WORK-FOR-HIRE PROBLEM: contractors are not employees, so 17 USC § 101 work-for-hire requires (a) work in one of 9 enumerated commissioned categories AND (b) written agreement. Software, marketing, consulting work NOT in those categories. Cure: belt-and-suspenders pattern — primary work-for-hire recital PLUS backup irrevocable assignment of all rights. Further-assurance recital required to satisfy 17 USC § 204(a) writing requirement for patent recordations." }, { "id": "confidentiality", "name": "Confidentiality (with DTSA Notice)", "name_de": "Confidentiality (with DTSA Notice)", "mandatory": true, "bgb_ref": "18 USC § 1833(b); 18 USC § 1836", "notes": "NDA-style provisions; MUST include DTSA whistleblower-immunity notice (18 USC § 1833(b)) to preserve exemplary damages and attorneys' fees under 18 USC § 1836(b)(3)(D). For individual contractors, include SEC Rule 21F-17 and NLRA Section 7 reservation-of-rights carve-outs." }, { "id": "indemnification_for_taxes", "name": "Indemnification for Misclassification / Tax Liability", "name_de": "Indemnification for Misclassification / Tax Liability", "mandatory": true, "notes": "Contractor indemnifies Company for contractor's tax liabilities, penalties, interest. Shifts financial risk but does not cure misclassification — a reclassification finding still triggers Company's employer-side withholding, FICA, and benefits obligations." } ], "optional_clauses": [ { "id": "non_solicitation", "name": "Non-Solicitation", "name_de": "Non-Solicitation", "typical": "12-24 months post-engagement", "notes": "Non-solicitation of Company employees and clients widely enforceable. Carve-outs for general solicitations and public job postings. California: narrow per Edwards v. Arthur Andersen 44 Cal. 4th 937 (2008) and Cal. B&P § 16600." }, { "id": "non_compete_caution", "name": "Non-Compete (Caution)", "name_de": "Non-Compete (Caution)", "warning_bgb_ref": "Cal. Bus. & Prof. Code § 16600 (void); Okla. Stat. tit. 15 § 219A; ND Cent. Code § 9-08-06; Minn. Stat. § 181.988 (2023, void); FTC 2024 rule (stayed)", "notes": "Increasingly restricted. California voids most post-employment non-competes (extended to IC per Edwards v. Arthur Andersen). Oklahoma, North Dakota, Minnesota (2023+) impose similar bans. FTC 2024 ban stayed by N.D. Tex. and remains in litigation. Enforceable in NY, TX, FL under reasonableness review with state-specific constraints. Omit except in known-enforceable jurisdictions." }, { "id": "insurance", "name": "Insurance", "name_de": "Insurance", "typical": "Professional liability $1M-$2M; CGL $1M; Workers' Comp where applicable", "notes": "Contractor carries professional liability, general liability, and (where applicable) workers' comp. Company named additional insured or waiver-of-subrogation. Certificate of insurance pre-engagement." }, { "id": "compliance_with_laws", "name": "Compliance with Laws", "name_de": "Compliance with Laws", "notes": "Anti-corruption (FCPA, UK Bribery Act); export controls (EAR, ITAR, OFAC); data protection (CCPA/CPRA, GDPR if applicable); employment law for contractor's own personnel." }, { "id": "ab5_b2b_exemption", "name": "California AB5 B2B Exemption Compliance", "name_de": "California AB5 B2B Exemption Compliance", "bgb_ref": "Cal. Labor Code § 2776", "notes": "For California contractors: contract must satisfy 12 specific Cal. Labor Code § 2776 requirements (separately incorporated/licensed contractor; own business address; own tools; sets own rates; advertises to public; multiple clients; controls own work; no entity employee performing same work; written contract specifying duration and rate; etc.) for B2B exemption from ABC test." }, { "id": "arbitration", "name": "Arbitration with Carve-Out", "name_de": "Arbitration with Carve-Out", "bgb_ref": "9 USC § 2 (FAA)", "notes": "See standard-clauses for full arbitration architecture. California: arbitration of individual IC's claims subject to Armendariz v. Foundation Health, 24 Cal. 4th 83 (2000) procedural-substantive unconscionability requirements." }, { "id": "governing_law", "name": "Governing Law and Forum", "name_de": "Governing Law and Forum", "notes": "See /handbook/us/foundation/standard-clauses/ for full architecture." } ], "court_cases": [ { "case": "Community for Creative Non-Violence v. Reid", "year": 1989, "url": "https://www.law.cornell.edu/supremecourt/text/490/730", "relevance": "Multi-factor common-law agency test for whether hired party is 'employee' for 17 USC § 101 work-for-hire purposes. Held sculptor was independent contractor, so work was not a work-for-hire by operation of statute. 490 U.S. 730." }, { "case": "Nationwide Mutual Insurance Co. v. Darden", "year": 1992, "url": "https://www.law.cornell.edu/supremecourt/text/503/318", "relevance": "Applied the Reid common-law agency test to determine 'employee' status under ERISA. Reinforces uniform federal common-law test for IC status across copyright, ERISA, and other federal statutes silent on the definition. 503 U.S. 318." }, { "case": "Dynamex Operations West, Inc. v. Superior Court", "year": 2018, "url": "", "relevance": "California Supreme Court adopted the ABC test for wage-order claims, replacing the Borello multi-factor common-law test. Codified by AB5 at Cal. Labor Code § 2775. 4 Cal. 5th 903." }, { "case": "Vizcaino v. Microsoft Corp.", "year": 1997, "url": "https://law.justia.com/cases/federal/appellate-courts/F3/120/1006/527127/", "relevance": "9th Circuit held that workers Microsoft classified as ICs but who satisfied common-law employee test were entitled retroactively to ERISA benefits including employee stock-purchase plan participation, despite IC-agreement waivers. Classic retroactive-reclassification-liability case. 120 F.3d 1006." }, { "case": "Edwards v. Arthur Andersen LLP", "year": 2008, "url": "https://law.justia.com/cases/california/supreme-court/4th/44/937.html", "relevance": "California Supreme Court held Cal. Business & Professions Code § 16600 voids virtually all post-employment restrictive covenants, including most non-solicits. Rule extended in subsequent cases to IC arrangements. 44 Cal. 4th 937." }, { "case": "Armendariz v. Foundation Health Psychcare Services", "year": 2000, "url": "https://law.justia.com/cases/california/supreme-court/4th/24/83.html", "relevance": "California Supreme Court imposed procedural-substantive unconscionability requirements on pre-dispute arbitration of employment / IC claims: neutral arbitrator, adequate discovery, written decision, no employee-side cost burden, no remedy limitations. 24 Cal. 4th 83." } ], "further_reading": { "bgb_articles": [ "26 USC § 3401 — Income tax withholding (no IC withholding)", "29 USC § 203 — FLSA definitions (employee, economic realities)", "29 CFR Part 795 — DOL 2024 IC final rule", "Cal. Labor Code § 2775 — ABC test (codifies Dynamex)", "Cal. Labor Code § 2776 — B2B exemption from ABC test", "Cal. Labor Code §§ 2777-2785 — Profession-specific exemptions", "Cal. Bus. & Prof. Code § 16600 — Non-compete prohibition", "17 USC § 101 — Work made for hire (9 enumerated categories)", "17 USC § 201 — Initial ownership", "17 USC § 204(a) — Writing required for transfer", "18 USC § 1833(b) — DTSA whistleblower notice", "Restatement (Second) of Agency § 220 — Servant/IC distinction", "Restatement (Third) of Agency § 7.07 — Scope of employment", "Revenue Act of 1978 § 530 — IRS Safe Harbor" ], "chaindoc_blog": [ "https://chaindoc.io/blog/contractor-nda-for-software-companies", "https://chaindoc.io/blog/contract-management-it" ] }, "lastVerified": "2026-05-10", "confidence": "high", "validationConflicts": [] }, { "type": "letter-of-intent", "name": "Letter of Intent / Term Sheet", "name_de": "Letter of Intent / Term Sheet", "category": "b2b-commercial", "schema_version": 1, "form_requirement": { "base": "free", "bgb_ref": "R2K § 27 (intent to be bound); UCC § 2-201 N/A for non-binding LOI", "alternatives": [ "electronic" ], "notes": "An LOI's enforceability is determined by intent to be bound under R2K § 27, not by form. A signed LOI containing all material terms may be held binding notwithstanding a 'non-binding' disclaimer (Texaco v. Pennzoil). Conversely, a fully-prose document explicitly disclaiming binding effect can preserve non-binding character even with both parties' signatures. The binding carve-outs (confidentiality, exclusivity, expenses, governing law) ARE binding regardless of overall character. Electronic execution per ESIGN/UETA universally valid for both binding and non-binding LOIs." }, "required_clauses": [ { "id": "parties_and_recitals", "name": "Parties and Transaction Recital", "name_de": "Parties and Transaction Recital", "mandatory": true, "notes": "Legal entity names, state of incorporation, principal place of business. Recital of contemplated transaction (acquisition, financing, joint venture, distribution arrangement)." }, { "id": "non_binding_disclaimer", "name": "Non-Binding Nature Disclaimer", "name_de": "Non-Binding Nature Disclaimer", "mandatory": true, "bgb_ref": "R2K § 27", "guidance": "REQUIRED for non-binding LOI. Must operate at every level: no offer, no acceptance, no agreement, no commitment. Must enumerate binding carve-outs by section number. Must include 'no liability for withdrawal' recital to defeat later Type II good-faith-negotiation claims. Failure can result in unintended Type I binding effect (Texaco v. Pennzoil $10.5B verdict)." }, { "id": "deal_terms_outline", "name": "Deal Terms Outline", "name_de": "Deal Terms Outline", "mandatory": true, "notes": "Material commercial terms: structure (asset / stock / merger / financing), price/valuation, payment mechanics, key conditions to closing. Sufficient specificity to identify the deal but explicit reservation that final terms are subject to Definitive Agreement." }, { "id": "due_diligence_access", "name": "Due Diligence Access", "name_de": "Due Diligence Access", "mandatory": true, "notes": "Scope (financial, legal, commercial, technical, HR, IT, environmental), data-room mechanics, management presentation, third-party diligence (customer/supplier with consent procedures), site visits." }, { "id": "exclusivity_no_shop", "name": "Exclusivity / No-Shop (Binding Carve-Out)", "name_de": "Exclusivity / No-Shop (Binding Carve-Out)", "mandatory": true, "notes": "Binding restriction on Seller (M&A) or Company (financing) from soliciting, entertaining, or negotiating competing transactions. Standard duration 30-90 days. Comprehensive enumeration of restricted verbs. Fiduciary out for public companies (Revlon duties). Notice obligations for unsolicited inquiries." }, { "id": "confidentiality", "name": "Confidentiality (Binding Carve-Out)", "name_de": "Confidentiality (Binding Carve-Out)", "mandatory": true, "notes": "Cross-reference to stand-alone NDA, or include full confidentiality provision binding existence/terms of LOI and non-public information disclosed in negotiations. Often paired with public-announcement restrictions." }, { "id": "expense_allocation", "name": "Expense Allocation (Binding Carve-Out)", "name_de": "Expense Allocation (Binding Carve-Out)", "mandatory": true, "notes": "Each Party bears its own expenses; or buyer reimburses certain seller expenses up to cap on consummation. Break-up fee in M&A (typically 1-3% of transaction value) paid on specified termination events." }, { "id": "termination", "name": "Termination (Binding Carve-Out)", "name_de": "Termination (Binding Carve-Out)", "mandatory": true, "notes": "Mechanics: mutual agreement, expiration of LOI period, signing of Definitive Agreement, material breach of binding provisions. Survival of binding provisions post-termination." }, { "id": "governing_law", "name": "Governing Law (Binding Carve-Out)", "name_de": "Governing Law (Binding Carve-Out)", "mandatory": true, "notes": "Required even for non-binding LOI to govern disputes over the binding carve-outs. Delaware standard for M&A and VC; New York for finance-heavy. See /handbook/us/foundation/standard-clauses/." } ], "optional_clauses": [ { "id": "purchase_price_mechanics", "name": "Purchase Price and Payment Mechanics (M&A)", "name_de": "Purchase Price and Payment Mechanics (M&A)", "notes": "Cash, stock, contingent consideration (earnouts, holdbacks, escrow), working-capital adjustment, indebtedness/cash treatment. Sufficient specificity for serious deal but explicit reservation for final negotiation in Definitive Agreement." }, { "id": "conditions_to_closing", "name": "Conditions to Closing (M&A)", "name_de": "Conditions to Closing (M&A)", "notes": "Due-diligence satisfaction, regulatory approvals (HSR Act, CFIUS), key employee retention, third-party consents (lessors, customers, licensors, lenders), no material adverse change, R&W bring-down at closing." }, { "id": "vc_economic_terms", "name": "VC Economic Terms", "name_de": "VC Economic Terms", "notes": "Pre-money, post-money, option pool (typically pre-money), liquidation preference (1× non-participating preferred 2025 standard), anti-dilution (broad-based weighted average standard), dividends (non-cumulative standard), conversion." }, { "id": "vc_control_terms", "name": "VC Control Terms", "name_de": "VC Control Terms", "notes": "Board composition, protective provisions, drag-along, tag-along, ROFR, pre-emptive rights, information rights, voting agreement, founder vesting, founder non-compete/non-solicit (subject to Cal. B&P § 16600)." }, { "id": "definitive_agreement_timing", "name": "Definitive Agreement Timing", "name_de": "Definitive Agreement Timing", "notes": "Outside date for signing Definitive Agreement (often 30-90 days from LOI signing); outside date for closing thereafter." }, { "id": "covenants_pending_closing", "name": "Covenants Pending Closing (M&A)", "name_de": "Covenants Pending Closing (M&A)", "notes": "Ordinary-course operation of business, no extraordinary transactions, employee retention, access to records, no material change to corporate structure." }, { "id": "tax_treatment", "name": "Tax Treatment", "name_de": "Tax Treatment", "notes": "Asset deal vs. stock deal step-up/carryover basis; § 338(h)(10) election; § 1060 allocation methodology." }, { "id": "regulatory_approvals", "name": "Regulatory Approvals", "name_de": "Regulatory Approvals", "notes": "HSR Act filing (15 USC § 18a), CFIUS (50 USC § 4565), industry-specific (FCC, FERC, banking, healthcare)." }, { "id": "key_employee_terms", "name": "Key Employee Terms", "name_de": "Key Employee Terms", "notes": "Identified key employees; new employment / consulting agreements as condition to closing; founder roll-over equity in PE deals." }, { "id": "public_announcement_restriction", "name": "Public Announcement Restriction", "name_de": "Public Announcement Restriction", "notes": "No public announcement except as required by law (SEC filings for public-company parties) or with the other party's consent. Critical to avoid Texaco-style 'agreement in principle' press-release liability." } ], "court_cases": [ { "case": "Texaco, Inc. v. Pennzoil Co.", "year": 1987, "url": "https://casetext.com/case/texaco-inc-v-pennzoil-co", "relevance": "Texas appellate court affirmed $10.53 billion jury verdict ($7.53B compensatory + $3B punitive) against Texaco for tortious interference with a 'Memorandum of Agreement' and 'agreement in principle' between Pennzoil and Getty Oil. Court applied New York law and held the agreement in principle was binding notwithstanding contemplated definitive agreement to follow. Largest civil verdict in US history at the time; forced Texaco into Chapter 11. Permanent reminder: form, not label, controls binding effect. 729 S.W.2d 768." }, { "case": "Adjustrite Systems, Inc. v. GAB Business Services, Inc.", "year": 1998, "url": "https://law.justia.com/cases/federal/appellate-courts/F3/145/543/619247/", "relevance": "Second Circuit articulated the Type I vs. Type II preliminary-agreement framework. Type I = fully binding even though further formal document contemplated. Type II = binding obligation to negotiate remaining open terms in good faith, but no obligation to consummate. Four-factor test from Teachers Insurance v. Tribune (1987) controls classification. 145 F.3d 543." }, { "case": "Brown v. Cara", "year": 2005, "url": "https://law.justia.com/cases/federal/appellate-courts/F3/420/148/611105/", "relevance": "Second Circuit reaffirmed Type I/Type II framework. Type II 'binding preliminary commitment' requires parties to negotiate further details in good faith but imposes no substantive obligations beyond that procedural duty. Damages for Type II breach typically reliance-based, not expectation-based. 420 F.3d 148." }, { "case": "SIGA Technologies, Inc. v. PharmAthene, Inc.", "year": 2015, "url": "https://courts.delaware.gov/Opinions/Download.aspx?id=234050", "relevance": "Delaware Supreme Court held that breach of contractual obligation to negotiate in good faith (Type II preliminary agreement) can support expectation damages, not merely reliance damages, where damages can be proven with reasonable certainty. Significant Delaware extension of Type II liability. 132 A.3d 1108." }, { "case": "Teachers Insurance & Annuity Ass'n of America v. Tribune Co.", "year": 1987, "url": "https://casetext.com/case/teachers-ins-annuity-assn-of-am-v-tribune-co-2", "relevance": "Judge Leval (S.D.N.Y.) originated the Type I vs. Type II preliminary-agreement distinction and the four-factor test for classification. Subsequently adopted by Second Circuit in Adjustrite and Brown v. Cara. 670 F. Supp. 491." } ], "further_reading": { "bgb_articles": [ "Restatement (Second) of Contracts § 27 — Intent to be Bound", "Restatement (Second) of Contracts § 33 — Definiteness of Terms", "Restatement (Second) of Contracts § 205 — Duty of Good Faith and Fair Dealing", "15 USC § 18a — Hart-Scott-Rodino Antitrust Improvements Act", "50 USC § 4565 — CFIUS national-security review", "17 CFR § 230.506 — Securities Act Rule 506 (Regulation D)", "17 CFR § 239.500 — Form D", "26 USC § 338 — Stock acquisitions treated as asset acquisitions", "26 USC § 1060 — Special allocation rules for certain asset acquisitions" ], "chaindoc_blog": [ "https://chaindoc.io/blog/contract-management-it", "https://chaindoc.io/blog/legal-strength-blockchain-e-signatures" ] }, "lastVerified": "2026-05-10", "confidence": "high", "validationConflicts": [] }, { "type": "msa", "name": "Master Services Agreement", "name_de": "Master Services Agreement", "category": "b2b-commercial", "schema_version": 1, "form_requirement": { "base": "free", "bgb_ref": "R2K § 110; UCC § 2-201 N/A (services contract, not goods)", "alternatives": [ "electronic" ], "notes": "No Statute of Frauds applies — MSA is typically for services, not goods. If the MSA covers a sale of goods $500+ or contemplates performance beyond one year, the underlying SOW may need a signed writing for evidentiary purposes; the MSA itself satisfies this if signed. Electronic execution per ESIGN/UETA universally valid for MSAs. Written form is universal practice regardless." }, "required_clauses": [ { "id": "parties_and_recitals", "name": "Parties and Recitals", "name_de": "Parties and Recitals", "mandatory": true, "notes": "Full legal-entity names, state of incorporation, principal place of business. Recitals describe the contemplated services relationship." }, { "id": "definitions", "name": "Definitions", "name_de": "Definitions", "mandatory": true, "notes": "Services, Deliverables, Customer IP, Provider IP, Pre-Existing IP, Confidential Information, SOW, Affiliate, etc." }, { "id": "scope_via_sow", "name": "Scope of Services (via SOW)", "name_de": "Scope of Services (via SOW)", "mandatory": true, "notes": "MSA establishes framework; SOWs incorporated by reference specify scope. Each SOW must reference and incorporate the MSA." }, { "id": "order_of_precedence", "name": "Order of Precedence", "name_de": "Order of Precedence", "mandatory": true, "guidance": "MSA-controls (default) vs. SOW-controls vs. hybrid (commercial terms follow SOW, legal-framework terms follow MSA unless SOW expressly overrides). Hybrid is best practice." }, { "id": "fees_and_payment", "name": "Fees, Expenses, and Invoicing", "name_de": "Fees, Expenses, and Invoicing", "mandatory": true, "notes": "Payment terms (net 30/45/60), late-fee formula ('lesser of 1.5%/month or maximum permitted by law' to avoid state usury issues), expense pre-approval, tax responsibilities." }, { "id": "ip_ownership", "name": "Intellectual Property Ownership", "name_de": "Intellectual Property Ownership", "mandatory": true, "bgb_ref": "17 USC §§ 101, 201, 204", "guidance": "Belt-and-suspenders pattern: work-for-hire recital PLUS backup assignment. Pure work-for-hire only works for (a) employees within scope OR (b) commissioned works in 9 enumerated 17 USC § 101 categories (collective work, motion picture, translation, supplementary work, compilation, instructional text, test, test answer material, atlas). Software, marketing, consulting deliverables are NOT in those categories — backup assignment essential." }, { "id": "pre_existing_ip", "name": "Pre-Existing / Background IP Carve-Out", "name_de": "Pre-Existing / Background IP Carve-Out", "mandatory": true, "notes": "Provider retains pre-existing tools, frameworks, methodologies, libraries; grants Customer perpetual, royalty-free license to use as embedded in Deliverables. Sublicensability and scope negotiable." }, { "id": "confidentiality", "name": "Confidentiality", "name_de": "Confidentiality", "mandatory": true, "bgb_ref": "18 USC § 1833(b); 18 USC § 1836", "notes": "Either incorporate separate NDA by reference or include full confidentiality clause. MUST include DTSA whistleblower-immunity notice (18 USC § 1833(b)) — omission forfeits exemplary damages and attorneys' fees in trade-secret litigation." }, { "id": "warranties_and_disclaimers", "name": "Warranties and Disclaimers", "name_de": "Warranties and Disclaimers", "mandatory": true, "bgb_ref": "UCC § 2-316", "notes": "Express warranties (authority, workmanship, compliance, non-infringement, no malicious code) + conspicuous disclaimer of implied warranties (merchantability, fitness for purpose, title, non-infringement) per UCC § 2-316(2) and common-law analogue." }, { "id": "indemnification", "name": "Indemnification", "name_de": "Indemnification", "mandatory": true, "notes": "Mutual indemnification for breach, negligence, willful misconduct, bodily injury/property damage. Provider IP-infringement indemnity (often most-negotiated): scope (patent/copyright/trade-secret), carve-outs (Customer-provided materials, Customer modifications), sole-remedy treatment, sublicensability." }, { "id": "limitation_of_liability", "name": "Limitation of Liability", "name_de": "Limitation of Liability", "mandatory": true, "bgb_ref": "UCC § 2-719; R2K § 195", "notes": "Cap (1×/2×/3× fees-paid in preceding 12 months) + exclusion of consequential damages + carve-outs (IP indemnity, confidentiality, gross negligence/willful misconduct/fraud, payment obligations, personal injury). UCC § 2-719(2) 'failure of essential purpose' doctrine is the principal challenge." }, { "id": "termination", "name": "Termination and Survival", "name_de": "Termination and Survival", "mandatory": true, "notes": "Termination for cause (material breach + cure period, insolvency), for convenience (30-90 day notice), and (optional) for change of control or SLA failure. Express survival of confidentiality, IP, indemnification, limitation of liability, payment of accrued amounts, dispute resolution." }, { "id": "governing_law_forum", "name": "Governing Law, Forum, and Dispute Resolution", "name_de": "Governing Law, Forum, and Dispute Resolution", "mandatory": true, "notes": "See /handbook/us/foundation/standard-clauses/ for full architecture. Common pattern: Delaware or New York governing law; exclusive forum or AAA/JAMS arbitration; injunctive-relief carve-out." } ], "optional_clauses": [ { "id": "service_levels", "name": "Service Level Agreement (SLA)", "name_de": "Service Level Agreement (SLA)", "notes": "Where Services are operational (managed services, hosting, BPO). Specifies uptime targets, response/resolution times, measurement methodology, service credits, sole-remedy treatment, force-majeure exclusions." }, { "id": "insurance", "name": "Insurance", "name_de": "Insurance", "typical": "CGL $1M/$2M; E&O $1M-$5M; Cyber $1M-$5M; WC statutory; Auto $1M", "notes": "Provider carries CGL, professional liability/E&O, cyber liability, workers' comp/employer's liability, automobile liability where applicable. Customer named additional insured or waiver-of-subrogation. Certificate of insurance pre-engagement." }, { "id": "audit_rights", "name": "Audit Rights", "name_de": "Audit Rights", "typical": "Once per year, reasonable notice, Customer expense unless material non-compliance", "notes": "Often substituted by SOC 2 / ISO 27001 reporting commitment." }, { "id": "key_personnel", "name": "Key Personnel", "name_de": "Key Personnel", "notes": "Identified individuals required; Customer approval right on substitutions; Provider's right to substitute on notice in case of attrition or unavailability." }, { "id": "independent_contractor_recital", "name": "Independent Contractor Recital", "name_de": "Independent Contractor Recital", "notes": "Provider is independent contractor, not employee/agent/partner/joint venturer. Tax and benefits responsibilities allocated to Provider. See independent-contractor record for substantive misclassification analysis." }, { "id": "non_solicit", "name": "Non-Solicitation", "name_de": "Non-Solicitation", "typical": "12-24 months post-termination", "notes": "Limited to specific personnel; carve-outs for general solicitations and public job postings. California: enforceability narrow per Edwards v. Arthur Andersen and Cal. B&P § 16600." }, { "id": "data_protection", "name": "Data Protection / Privacy", "name_de": "Data Protection / Privacy", "notes": "Where Provider processes Customer data: data-processing addendum (DPA), security commitments, breach-notification timelines, deletion-on-termination, compliance with CCPA/CPRA, GDPR (if applicable), HIPAA (if PHI), GLBA (if financial)." } ], "court_cases": [ { "case": "Community for Creative Non-Violence v. Reid", "year": 1989, "url": "https://www.law.cornell.edu/supremecourt/text/490/730", "relevance": "Multi-factor test for whether a hired party is an 'employee' for 17 USC § 101 work-for-hire purposes. Drawn from Restatement (Second) of Agency § 220. Held the sculptor commissioned by an advocacy group was an independent contractor, not employee, so the work was not a work-for-hire by operation of statute. 490 U.S. 730." }, { "case": "Effects Associates, Inc. v. Cohen", "year": 1990, "url": "https://law.justia.com/cases/federal/appellate-courts/F2/908/555/272381/", "relevance": "9th Circuit held that absent a written agreement satisfying 17 USC § 204(a), an oral agreement to transfer copyright is unenforceable but the hiring party may have an implied non-exclusive license. Authority for the proposition that a written assignment is essential. 908 F.2d 555." } ], "further_reading": { "bgb_articles": [ "17 USC § 101 — Work made for hire definition", "17 USC § 201 — Initial ownership of copyright", "17 USC § 204 — Transfers must be in writing", "UCC § 2-316 — Disclaimer of implied warranties", "UCC § 2-719 — Limitation of remedies + failure of essential purpose", "Restatement (Second) of Agency § 220 — Definition of servant/employee", "Restatement (Second) of Contracts § 195 — Limitation of liability", "18 USC § 1833(b) — DTSA whistleblower notice", "18 USC § 1836 — Defend Trade Secrets Act", "15 USC §§ 7001-7031 — ESIGN Act" ], "chaindoc_blog": [ "https://chaindoc.io/blog/contract-management-it", "https://chaindoc.io/blog/legal-strength-blockchain-e-signatures" ] }, "lastVerified": "2026-05-10", "confidence": "high", "validationConflicts": [] }, { "type": "nda", "name": "Non-Disclosure Agreement", "name_de": "Non-Disclosure Agreement", "category": "b2b-commercial", "schema_version": 1, "form_requirement": { "base": "free", "bgb_ref": "R2K § 90; UCC § 2-201 N/A", "alternatives": [ "electronic" ], "notes": "No US Statute of Frauds category covers NDAs by subject matter — they are not in consideration of marriage, not performable beyond a year only if drafted with that intent, not sale-of-land, not suretyship, not executor promises, and (usually) not sale-of-goods over $500. Writing is universal practice for evidentiary reasons and to satisfy the 'reasonable secrecy measures' leg of the federal DTSA / state UTSA trade-secret definition (18 USC § 1839(3))." }, "required_clauses": [ { "id": "parties", "name": "Parties", "name_de": "Parties", "mandatory": true, "notes": "Legal-entity names, state of incorporation, principal place of business. Distinguish Disclosing Party from Receiving Party (or designate Both Parties for mutual NDA)." }, { "id": "purpose", "name": "Purpose", "name_de": "Purpose", "mandatory": true, "guidance": "Narrowly define the permitted use of the Confidential Information (e.g., 'evaluation of a potential business relationship between the Parties regarding X'). Broader Purpose definitions weaken the Disclosing Party's later misuse claims." }, { "id": "confidential_information_definition", "name": "Definition of Confidential Information", "name_de": "Definition of Confidential Information", "mandatory": true, "guidance": "Affirmative scope + the five standard exclusions: (1) publicly known, (2) already known, (3) independently developed, (4) lawfully received from a third party, (5) required by law. Marking requirements optional but improve predictability. Document-retention requirements on the 'independently developed' exclusion are litigation-determinative." }, { "id": "confidentiality_and_use_restrictions", "name": "Confidentiality and Use Restrictions", "name_de": "Confidentiality and Use Restrictions", "mandatory": true, "notes": "Non-disclosure to third parties + non-use beyond the Purpose + need-to-know access limit. Receiving Party responsible for breach by its Representatives." }, { "id": "compelled_disclosure", "name": "Compelled Disclosure", "name_de": "Compelled Disclosure", "mandatory": true, "notes": "Procedure for court orders, subpoenas, regulatory mandates: prompt notice to Disclosing Party, cooperation with motion for protective order, disclosure limited to what is strictly compelled." }, { "id": "return_or_destruction", "name": "Return or Destruction", "name_de": "Return or Destruction", "mandatory": true, "notes": "At termination or on written request, return or destroy. Specify whether election is Disclosing Party's or Receiving Party's; certified destruction for hardcopy; secure-deletion standard (e.g., NIST SP 800-88) for electronic. Compliance-archive carve-out typical." }, { "id": "term_and_survival", "name": "Term and Survival of Confidentiality", "name_de": "Term and Survival of Confidentiality", "mandatory": true, "notes": "Distinguish term of agreement from survival period of confidentiality obligation. Standard pattern: 3-5 years post-termination for ordinary Confidential Information, indefinite for trade secrets per 18 USC § 1839(3) and state UTSA." }, { "id": "dtsa_whistleblower_notice", "name": "DTSA Whistleblower Immunity Notice", "name_de": "DTSA Whistleblower Immunity Notice", "mandatory": true, "bgb_ref": "18 USC § 1833(b)", "notes": "REQUIRED for contracts entered or modified after May 11, 2016 governing trade-secret or confidential-information use by employees, contractors, or consultants. Failure to include forfeits exemplary damages and attorneys' fees under 18 USC § 1836(b)(3)(D)." } ], "optional_clauses": [ { "id": "equitable_relief", "name": "Equitable Relief / Injunctive Remedies", "name_de": "Equitable Relief / Injunctive Remedies", "notes": "Acknowledgment of irreparable harm; waiver of bond under FRCP 65(c); injunctive-relief carve-out from arbitration. Most federal courts honor contractual bond-waivers but Winter v. NRDC (2008) requires independent finding of irreparable harm." }, { "id": "residuals", "name": "Residual Knowledge", "name_de": "Residual Knowledge", "guidance": "Strongly disfavored from Disclosing-Party side; sometimes commercially required by technical consultancies. If included, narrow to 'general skills and experience,' exclude trade secrets, define 'unaided memory' strictly." }, { "id": "sec_nlra_carve_out", "name": "SEC Rule 21F-17 / NLRA Section 7 Carve-Out", "name_de": "SEC Rule 21F-17 / NLRA Section 7 Carve-Out", "bgb_ref": "17 CFR § 240.21F-17; 29 USC § 157", "notes": "Required in NDAs covering employees or contractors. Reserves right to communicate with SEC, OSHA, DOJ, EEOC, NLRB; protects 'concerted activity' on terms and conditions of employment. SEC has fined Activision Blizzard ($35M, 2023), Anheuser-Busch InBev ($6M, 2016), BlackRock ($340K, 2016) for non-compliant NDAs." }, { "id": "non_solicitation_non_hire", "name": "Non-Solicitation / Non-Hire", "name_de": "Non-Solicitation / Non-Hire", "typical": "12-24 months post-termination", "notes": "Limited duration; specific employees identified or roles described; carve-outs for general solicitations (public job postings, general recruiting) and unsolicited applications. Distinguished from non-compete — non-solicits more widely enforceable, even in California for narrow employee non-hires (though Edwards v. Arthur Andersen, 44 Cal. 4th 937 (2008) extended Cal. B&P § 16600 to most non-solicit clauses)." }, { "id": "no_license", "name": "No License", "name_de": "No License", "notes": "Disclosure does not grant any patent, copyright, trademark, or other IP license, express or implied." }, { "id": "no_warranty", "name": "No Representation or Warranty", "name_de": "No Representation or Warranty", "notes": "Disclosing Party makes no representation or warranty as to accuracy or completeness. AS-IS disclosure protects against later misrepresentation claims." }, { "id": "arbitration_carve_out", "name": "Arbitration with Injunctive-Relief Carve-Out", "name_de": "Arbitration with Injunctive-Relief Carve-Out", "bgb_ref": "9 USC § 2 (FAA)", "notes": "Either Party may seek temporary or preliminary injunctive relief in court pending arbitral tribunal constitution. Resort to court is not waiver of arbitration. See standard-clauses for full arbitration architecture." }, { "id": "governing_law", "name": "Governing Law and Forum", "name_de": "Governing Law and Forum", "notes": "See /handbook/us/foundation/standard-clauses/ for the choice-of-law, forum-selection, and arbitration architecture." } ], "court_cases": [ { "case": "Winter v. Natural Resources Defense Council", "year": 2008, "url": "https://www.law.cornell.edu/supremecourt/text/07-1239", "relevance": "Sets the federal preliminary-injunction standard: movant must show likelihood of success, irreparable harm, balance of equities, and public interest. Contractual irreparable-harm recitals are evidence but not conclusive of the second factor. 555 U.S. 7." }, { "case": "Edwards v. Arthur Andersen LLP", "year": 2008, "url": "https://law.justia.com/cases/california/supreme-court/4th/44/937.html", "relevance": "Cal. Business & Professions Code § 16600 voids virtually all post-employment restrictive covenants in California, including most non-solicits. Narrow trade-secret protective measures remain enforceable. 44 Cal. 4th 937." }, { "case": "Waymo LLC v. Uber Technologies, Inc.", "year": 2018, "url": "", "relevance": "Landmark DTSA case — federal civil trade-secret action over autonomous-vehicle technology; settled for $245 million in Uber equity after preliminary-injunction battles. Illustrates injunctive-relief importance and exemplary-damages stakes under 18 USC § 1836(b)(3). N.D. Cal." } ], "further_reading": { "bgb_articles": [ "18 USC § 1833(b) — DTSA whistleblower-immunity notice", "18 USC § 1836 — DTSA federal civil cause of action", "18 USC § 1839 — DTSA definitions (trade secret)", "Uniform Trade Secrets Act (UTSA) — adopted in 48 states", "Restatement (First) of Torts § 757 — common-law trade secrets (NY)", "17 CFR § 240.21F-17 — SEC Rule 21F-17", "15 USC § 78u-6 — Dodd-Frank securities whistleblower", "29 USC § 157 — NLRA Section 7", "9 USC § 2 — Federal Arbitration Act", "Federal Rule of Civil Procedure 65(c) — injunction bond" ], "chaindoc_blog": [ "https://chaindoc.io/blog/how-to-create-secure-nda", "https://chaindoc.io/blog/contractor-nda-for-software-companies", "https://chaindoc.io/blog/legal-strength-blockchain-e-signatures" ] }, "lastVerified": "2026-05-10", "confidence": "high", "validationConflicts": [] }, { "type": "non-compete", "name": "Non-Compete and Non-Solicitation", "name_de": "Non-Compete and Non-Solicitation", "category": "employment", "schema_version": 1, "form_requirement": { "base": "free", "bgb_ref": "R2K § 188 (restraint of trade); Cal. B&P §§ 16600-16600.5; M.G.L. c. 149 § 24L; RCW 49.62; 820 ILCS 90; D.C. Code § 32-581; ORS 653.295", "alternatives": [ "electronic" ], "notes": "No federal form requirement, but several state non-compete statutes impose substantive writing and notice rules. Massachusetts Noncompetition Agreement Act (M.G.L. c. 149 § 24L) requires the agreement to be in writing, signed by both parties, state the right to consult counsel, be provided either with the formal offer or ten business days before commencement, and include garden-leave or other 'mutually-agreed-upon consideration.' Washington RCW 49.62 requires written disclosure at offer for at-hire non-competes. Oregon ORS 653.295 requires written notice in the offer letter at least two weeks before start. FTC Non-Compete Rule (16 CFR § 910), effective September 4, 2024, was vacated nationwide in Ryan, LLC v. FTC, No. 3:24-CV-986 (N.D. Tex. August 20, 2024); FTC appeal pending in the Fifth Circuit." }, "required_clauses": [ { "id": "scope_of_restriction", "name": "Scope of Restricted Activity", "name_de": "Scope of Restricted Activity", "mandatory": true, "guidance": "Define the prohibited activity by reference to the specific competitive business, line of products, or services — not the entire industry. Overbroad definitions are the most common cause of non-enforcement. Examples: 'engaging in the business of cloud-based contract-management software targeted at mid-market enterprises in the United States' rather than 'engaging in any software business.'" }, { "id": "temporal_scope", "name": "Temporal Scope", "name_de": "Temporal Scope", "mandatory": true, "notes": "Duration of the restriction. Most-state baseline: 12 months. Massachusetts: 12 months maximum (M.G.L. c. 149 § 24L(b)(iv)). Oregon: 12 months (ORS 653.295). Washington: 18 months presumptively reasonable; longer requires clear-and-convincing evidence (RCW 49.62.020(4)). Texas, New York, Florida, Delaware: 1-2 years standard under reasonableness review." }, { "id": "geographic_scope", "name": "Geographic Scope", "name_de": "Geographic Scope", "mandatory": true, "notes": "Geographic territory of restriction. Must match the employer's actual business footprint and the employee's role. National or global restrictions enforceable only for senior executives with national/global responsibilities. State-specific reasonableness review — Texas (Bus. & Com. Code § 15.50); New York reasonableness standard from BDO Seidman v. Hirshberg, 93 N.Y.2d 382 (1999)." }, { "id": "legitimate_business_interest", "name": "Legitimate Business Interest Recital", "name_de": "Legitimate Business Interest Recital", "mandatory": true, "guidance": "Recital of the protectable interest: trade secrets, confidential information, customer goodwill, specialized training, employee investment. Reasonableness analysis applied by courts looks to whether the restriction is narrowly tailored to protect this interest. Mere prevention of competition is not a protectable interest in any state." }, { "id": "consideration", "name": "Consideration", "name_de": "Consideration", "mandatory": true, "notes": "At-hire: the offer of employment is sufficient consideration in most states. Mid-employment: the rule splits — Texas requires only continued employment (Marsh USA v. Cook, 354 S.W.3d 764 (Tex. 2011)); Illinois under Fifield v. Premier Dealer Services, 2013 IL App (1st) 120327, requires two years of continued employment unless additional consideration provided; Massachusetts requires garden leave equal to 50% of base salary or other mutually-agreed-upon consideration (M.G.L. c. 149 § 24L(b)(vii)); Washington requires meaningful new consideration for mid-employment non-competes (RCW 49.62.020(1)(d))." }, { "id": "blue_pencil_severability", "name": "Blue-Pencil / Severability", "name_de": "Blue-Pencil / Severability", "mandatory": true, "notes": "Authorization for the court to reform an overbroad restriction to the minimum extent necessary for enforceability. Critical because state approaches vary: Texas (DeSantis v. Wackenhut, 793 S.W.2d 670 (Tex. 1990)) and Florida (Fla. Stat. § 542.335(1)(c)) allow blue-pencilling; Virginia (Modern Environments v. Stinnett, 561 S.E.2d 694 (Va. 2002)), Wisconsin, and Nebraska refuse and void the entire covenant if overbroad. California refuses to enforce or reform (Cal. B&P § 16600)." }, { "id": "governing_law_and_forum", "name": "Governing Law and Forum", "name_de": "Governing Law and Forum", "mandatory": true, "bgb_ref": "Cal. Lab. Code § 925; Cal. B&P §§ 16600.1-16600.5", "notes": "California voids non-California choice-of-law and forum-selection for California-resident employees (Cal. Lab. Code § 925 unless employee was represented by individual counsel in the negotiation). Cal. B&P § 16600.5 (2024) extends the void to extraterritorial non-competes covering California-residents regardless of where employee currently works. Massachusetts requires governing law and forum to be Massachusetts for Massachusetts-resident employees (M.G.L. c. 149 § 24L(b)(viii))." } ], "optional_clauses": [ { "id": "garden_leave", "name": "Garden Leave / Paid Restriction Period", "name_de": "Garden Leave / Paid Restriction Period", "bgb_ref": "M.G.L. c. 149 § 24L(b)(vii)", "notes": "Employer pays 50% of base salary (or other 'mutually agreed' consideration) during the restricted period — required in Massachusetts unless the employee receives other mutually-agreed consideration. Increasingly used in private executive contracts in NY, IL, and DE as a hedge against non-enforcement and as an alternative to traditional non-competes." }, { "id": "customer_non_solicit", "name": "Customer Non-Solicitation", "name_de": "Customer Non-Solicitation", "typical": "12-24 months post-termination", "notes": "Typically more enforceable than non-compete because narrower. New York under BDO Seidman v. Hirshberg, 93 N.Y.2d 382 (1999), limited to customers the employee had a relationship with through the employer. California: AMN Healthcare, Inc. v. Aya Healthcare Services, Inc., 28 Cal. App. 5th 923 (2018), held a customer non-solicit void under Cal. B&P § 16600 — same fate as non-compete." }, { "id": "employee_non_solicit", "name": "Employee Non-Solicitation / No-Hire", "typical": "12-24 months post-termination", "name_de": "Employee Non-Solicitation / No-Hire", "notes": "Restriction on soliciting or hiring current Company employees. Most widely enforceable form of restrictive covenant. Carve-outs for general solicitations (public job postings, recruiter listings) and unsolicited applications. California: void post-AMN Healthcare for most employee non-solicits, narrow trade-secret-protection exception possible." }, { "id": "ip_protection_alternatives", "name": "IP Protection Alternatives", "name_de": "IP Protection Alternatives", "notes": "Confidentiality covenant + IP assignment + narrowly drawn non-solicit — the preferred package where non-compete is unenforceable or limited. Trade-secret claims under DTSA (18 USC § 1836) and state UTSA give parallel remedies including injunctive relief and exemplary damages." }, { "id": "tolling", "name": "Tolling", "name_de": "Tolling", "notes": "Restricted period tolls during any period the employee is in breach. Enforceability varies by state; California disfavors. Useful in jurisdictions with reform / blue-pencil acceptance." }, { "id": "notice_to_subsequent_employer", "name": "Notice to Subsequent Employer", "name_de": "Notice to Subsequent Employer", "notes": "Obligation on departing employee to inform Company of identity of new employer and to provide new employer with copy of restrictive covenant. Increases tortious-interference exposure for the new employer and is a practical deterrent." } ], "forbidden_in_agb": [ { "clause_id": "noncompete_california", "name_de": "Non-Compete on California Employee", "bgb_ref": "Cal. Bus. & Prof. Code §§ 16600-16600.5", "consequence": "Void per se. 2024 amendments (Cal. B&P §§ 16600.1-16600.5) require employers to notify by February 14, 2024 any current or former employee whose contract included an unlawful non-compete that the provision is void, and create civil penalties and a private right of action for violations." }, { "clause_id": "noncompete_north_dakota", "name_de": "Non-Compete in North Dakota", "bgb_ref": "N.D. Cent. Code § 9-08-06", "consequence": "Void with narrow exceptions for sale-of-business and dissolution-of-partnership non-competes." }, { "clause_id": "noncompete_oklahoma", "name_de": "Non-Compete in Oklahoma", "bgb_ref": "Okla. Stat. tit. 15 §§ 217-219A", "consequence": "Void in employment context; permitted only for sale-of-business non-competes within the geographic area sold." }, { "clause_id": "noncompete_minnesota", "name_de": "Non-Compete in Minnesota (Post-July 2023)", "bgb_ref": "Minn. Stat. § 181.988", "consequence": "Void as to any employment or independent-contractor non-compete entered or modified on or after July 1, 2023. Exception for sale-of-business and dissolution-of-partnership non-competes." }, { "clause_id": "noncompete_below_wage_threshold", "name_de": "Non-Compete Below Wage Threshold", "bgb_ref": "RCW 49.62.020; 820 ILCS 90/10; D.C. Code § 32-581.02; ORS 653.295", "consequence": "Non-competes unenforceable for employees earning below state-specific thresholds: Washington — $116,594 employee / $291,484 contractor (2024 indexed); Illinois — $75,000/yr wages (non-solicit threshold $45,000); D.C. — $150,000 / $250,000 for medical specialists; Oregon — $108,575 (2024 indexed) plus 12-month max plus written notice; Massachusetts — non-exempt employees per FLSA cannot be subject to non-compete." }, { "clause_id": "noncompete_low_wage_federal", "name_de": "Non-Compete for Low-Wage Workers (Various State Bans)", "bgb_ref": "Md. Lab. & Empl. § 3-716; Va. Code § 40.1-28.7:8; NH RSA 275:70-a; RI Gen. Laws § 28-59", "consequence": "Maryland, Virginia, New Hampshire, Rhode Island, and several other states ban non-competes for low-wage workers (typically defined by hourly wage or salary cap). Federal FTC rule that would have banned virtually all non-competes was vacated nationwide by Ryan, LLC v. FTC (N.D. Tex. Aug. 2024)." } ], "court_cases": [ { "case": "Edwards v. Arthur Andersen LLP", "year": 2008, "url": "https://law.justia.com/cases/california/supreme-court/4th/44/937.html", "relevance": "California Supreme Court held Cal. B&P § 16600 voids virtually all post-employment restrictive covenants, including non-competes and most non-solicits, rejecting the federal 'narrow restraint' exception. Foundational California non-compete case. 44 Cal. 4th 937." }, { "case": "AMN Healthcare, Inc. v. Aya Healthcare Services, Inc.", "year": 2018, "url": "https://law.justia.com/cases/california/court-of-appeal/2018/d071924.html", "relevance": "Extended Edwards to customer non-solicits — California now treats nearly all customer non-solicits as void under § 16600. 28 Cal. App. 5th 923." }, { "case": "PepsiCo, Inc. v. Redmond", "year": 1995, "url": "https://law.justia.com/cases/federal/appellate-courts/F3/54/1262/586131/", "relevance": "Seventh Circuit articulated the 'inevitable disclosure' doctrine — even absent a non-compete, an employee with trade-secret knowledge can be enjoined from accepting a competing position where disclosure is inevitable. Adopted in some states (IL, MO, IN), rejected in others (CA, MD, FL post-FUTSA, VA). 54 F.3d 1262." }, { "case": "BDO Seidman v. Hirshberg", "year": 1999, "url": "https://law.justia.com/cases/new-york/court-of-appeals/1999/93-n-y-2d-382-0.html", "relevance": "New York reasonableness test for restrictive covenants requires no greater than necessary to protect employer's legitimate interests, not unreasonably burdensome on employee, and not injurious to public. Customer non-solicits limited to customers employee dealt with through the employer. 93 N.Y.2d 382." }, { "case": "Ryan, LLC v. Federal Trade Commission", "year": 2024, "url": "https://storage.courtlistener.com/recap/gov.uscourts.txnd.394559/gov.uscourts.txnd.394559.211.0.pdf", "relevance": "Northern District of Texas vacated the FTC Non-Compete Rule (16 CFR § 910) nationwide on August 20, 2024, just before its scheduled September 4, 2024 effective date. Court held the FTC exceeded its statutory authority under the FTC Act in promulgating a substantive competition rule. FTC has appealed to the Fifth Circuit; as of mid-2026, vacatur stands. No. 3:24-CV-986 (N.D. Tex.)." }, { "case": "Fifield v. Premier Dealer Services", "year": 2013, "url": "https://law.justia.com/cases/illinois/court-of-appeals-first-appellate-district/2013/1-12-0327.html", "relevance": "Illinois Court of Appeals held that two years of continued employment is required to constitute adequate consideration for a non-compete imposed on at-will employee mid-employment, absent additional consideration. Still controls in Illinois despite subsequent legislative changes. 2013 IL App (1st) 120327." } ], "further_reading": { "bgb_articles": [ "Cal. Bus. & Prof. Code §§ 16600-16600.5 — Restraint of trade", "Cal. Lab. Code § 925 — Choice of law/forum", "M.G.L. c. 149 § 24L — Massachusetts Noncompetition Agreement Act", "RCW 49.62 — Washington Noncompete Covenants", "820 ILCS 90 — Illinois Freedom to Work Act", "D.C. Code §§ 32-581.01-.05 — DC Ban on Non-Compete Agreements", "ORS 653.295 — Oregon noncompete rules", "Minn. Stat. § 181.988 — Minnesota non-compete prohibition", "N.D. Cent. Code § 9-08-06 — North Dakota restraint of trade", "Okla. Stat. tit. 15 §§ 217-219A — Oklahoma restraint of trade", "Fla. Stat. § 542.335 — Florida restrictive covenants", "Tex. Bus. & Com. Code § 15.50 — Texas covenants not to compete", "16 CFR § 910 — FTC Non-Compete Rule (vacated 2024)", "18 USC § 1836 — Defend Trade Secrets Act", "Uniform Trade Secrets Act — adopted in 48 states" ], "chaindoc_blog": [ "https://chaindoc.io/blog/contractor-nda-for-software-companies", "https://chaindoc.io/blog/how-to-create-secure-nda" ] }, "lastVerified": "2026-05-10", "confidence": "high", "validationConflicts": [] }, { "type": "offer-letter", "name": "Offer Letter", "name_de": "Offer Letter", "category": "employment", "schema_version": 1, "form_requirement": { "base": "free", "bgb_ref": "R2K § 17 (Statute of Frauds generally inapplicable); 8 USC § 1324a (I-9)", "alternatives": [ "electronic" ], "notes": "An offer letter is a written employment offer typically shorter and less formal than a full Employment Agreement. For at-will employees who do not receive a full agreement, the offer letter is the binding employment document. Universal practice is to deliver in writing for evidentiary reasons; ESIGN/UETA permit electronic delivery and signature. State-mandatory at-hire notices may have separate writing and content requirements (Cal. Lab. Code § 2810.5 wage-theft notice; NY Lab. Law § 195.1; MA wage notice)." }, "required_clauses": [ { "id": "position_and_supervisor", "name": "Position, Title, and Supervisor", "name_de": "Position, Title, and Supervisor", "mandatory": true, "guidance": "Job title and the supervisor's title (not name — names change). Avoid open-ended duty descriptions that may be read as guaranteeing specific responsibilities for any period." }, { "id": "start_date", "name": "Start Date", "name_de": "Start Date", "mandatory": true, "notes": "Anticipated start date subject to satisfaction of contingencies. I-9 employment eligibility verification within three business days of actual start (8 USC § 1324a)." }, { "id": "compensation_rate", "name": "Compensation Rate", "name_de": "Compensation Rate", "mandatory": true, "bgb_ref": "29 USC § 206 (minimum wage); 29 USC § 207 (overtime)", "guidance": "Use rate language ('$X per year, payable in accordance with Company's regular payroll practices') rather than annual-amount language ('annual salary of $X') to avoid creating an implied one-year promise. State-required notices: California Lab. Code § 2810.5 wage-theft notice; New York Lab. Law § 195.1 (annual and at-hire); Massachusetts wage notice." }, { "id": "flsa_classification", "name": "FLSA Classification", "name_de": "FLSA Classification", "mandatory": true, "bgb_ref": "29 USC § 213", "notes": "Disclosure of exempt or non-exempt status under FLSA. Some state notices require explicit overtime-eligibility disclosure. Salary-basis test (currently $35,568 federal threshold after Eastern District of Texas vacatur of 2024 DOL rule in State of Texas v. DOL (November 2024)) plus duties test (executive, administrative, professional, computer, outside sales, highly-compensated)." }, { "id": "at_will_disclaimer", "name": "At-Will Disclaimer", "name_de": "At-Will Disclaimer", "mandatory": true, "guidance": "Conspicuous statement — typically bolded or in caps in part — that employment is at-will and that nothing in the offer letter is a promise of employment for any specific duration. Modification only by writing signed by an authorized officer. Defends against implied-contract claims under Toussaint v. Blue Cross Blue Shield of Michigan, 408 Mich. 579 (1980)." }, { "id": "contingencies", "name": "Contingencies", "name_de": "Contingencies", "mandatory": true, "notes": "Offer contingent on: I-9 employment eligibility verification; background check (subject to FCRA pre-adverse-action and adverse-action notice requirements, 15 USC § 1681b(b)(3), and state ban-the-box and fair-chance laws); drug test where permitted (limited by state cannabis-employment-protection statutes in NJ, NY, CA, CT, NV, IL); reference check; satisfactory completion of any required licenses or certifications. 'Subject to' language for board-approved items (equity grants)." }, { "id": "integration_clause", "name": "Integration Clause", "name_de": "Integration Clause", "mandatory": true, "notes": "Limits parol evidence — 'This offer letter and the documents referenced herein set forth the entire understanding of the parties regarding the terms of employment and supersede all prior discussions, representations, or agreements.' Combined with at-will disclaimer to defeat Toussaint-style implied-contract claims based on recruitment conversations." }, { "id": "acceptance", "name": "Acceptance", "name_de": "Acceptance", "mandatory": true, "notes": "Signature line for employee plus deadline for acceptance (typical 7-14 days). Offer expires if unsigned by deadline. ESIGN-compliant electronic signature standard practice." } ], "optional_clauses": [ { "id": "bonus_eligibility", "name": "Bonus Eligibility", "name_de": "Bonus Eligibility", "notes": "Target bonus expressed as percentage of base salary or dollar amount, with explicit discretion disclaimer ('subject to Company's discretion and based on individual and Company performance; bonuses are not earned until paid and require active employment in good standing on the payment date'). Prevents pro-rata bonus claims on departure." }, { "id": "equity_grant_intent", "name": "Equity Grant Intent", "name_de": "Equity Grant Intent", "notes": "Intent to grant options or RSUs subject to board approval and the governing equity plan, the form of stock-option or RSU agreement, and continuing employment through the grant date. Typical 4-year vesting with 1-year cliff. Reference but do not embed terms — those live in the separate equity agreement." }, { "id": "benefits_eligibility", "name": "Benefits Eligibility", "name_de": "Benefits Eligibility", "notes": "'Eligibility for Company benefit plans as in effect from time to time and subject to plan terms, eligibility waiting periods, and Company's right to modify or terminate any plan.' Reservation of rights protects against ERISA § 502(a)(1)(B) vested-benefits claims by preserving plan-modification authority." }, { "id": "pto", "name": "Paid Time Off", "name_de": "Paid Time Off", "notes": "Reference to PTO policy as in effect; accrual rate or unlimited PTO designation; state-specific payout-at-termination rules (California Lab. Code § 227.3 — accrued unused vacation is wages; unlimited-PTO programs may avoid payout where well-structured per McPherson v. EF Intercultural Foundation, 47 Cal. App. 5th 243 (2020))." }, { "id": "signing_bonus", "name": "Signing Bonus / Sign-On Bonus", "name_de": "Signing Bonus / Sign-On Bonus", "typical": "Pro-rata clawback over 12-24 months", "notes": "Pro-rata clawback if employee resigns without Good Reason or is terminated for Cause within the clawback period. Enforceable in most states. California: treated as wage advance subject to Lab. Code § 224 deduction limits; consider gross-up to net of withholding." }, { "id": "piia_reference", "name": "PIIA / IP Assignment Reference", "name_de": "PIIA / IP Assignment Reference", "notes": "Reference to the separate Proprietary Information and Inventions Assignment Agreement (PIIA) or At-Will Employment, Confidential Information, Invention Assignment, and Arbitration Agreement (Silicon Valley standard form) as a condition of employment. PIIA must include DTSA whistleblower notice (18 USC § 1833(b)), SEC Rule 21F-17 carve-out, NLRA Section 7 carve-out, and Cal. Lab. Code § 2872 employee notice (if employer relies on § 2870 carve-out)." }, { "id": "outside_activity_disclosure", "name": "Outside Activity / Conflict of Interest Disclosure", "name_de": "Outside Activity / Conflict of Interest Disclosure", "notes": "Disclosure of outside activities, board memberships, consulting engagements that could conflict. Subject to state moonlighting-protection statutes (Cal. Lab. Code § 96(k) — lawful conduct outside working hours)." }, { "id": "relocation_assistance", "name": "Relocation Assistance", "name_de": "Relocation Assistance", "typical": "Pro-rata clawback over 12-24 months", "notes": "Lump-sum or expense-reimbursement-based relocation, with clawback. Tax-grossing for relocation benefits post-TCJA (2017 tax reform eliminated qualified moving expense exclusion except for active-duty military)." }, { "id": "misrepresentation_clawback", "name": "Misrepresentation in Application", "name_de": "Misrepresentation in Application", "notes": "Offer voidable if employee made material misrepresentation in application or interview process (educational credentials, prior employment, criminal history within lawful inquiry scope). 90-day clawback for misrepresentation typical." } ], "court_cases": [ { "case": "Toussaint v. Blue Cross & Blue Shield of Michigan", "year": 1980, "url": "https://law.justia.com/cases/michigan/supreme-court/1980/60792-3.html", "relevance": "Foundational implied-contract case — oral assurances and handbook just-cause language created an enforceable contract overriding at-will presumption. The case offer-letter drafters defend against with conspicuous at-will disclaimers and integration clauses. 408 Mich. 579." }, { "case": "McPherson v. EF Intercultural Foundation", "year": 2020, "url": "https://law.justia.com/cases/california/court-of-appeal/2020/b290869.html", "relevance": "California Court of Appeal held an 'unlimited PTO' policy without written documentation or clear administration was a de facto accrued-vacation policy and required payout at termination under Lab. Code § 227.3. Sets requirements for valid unlimited-PTO programs. 47 Cal. App. 5th 243." } ], "further_reading": { "bgb_articles": [ "29 USC § 206 — Minimum wage", "29 USC § 207 — Maximum hours and overtime", "29 USC § 213 — FLSA exemptions", "29 CFR § 825 — FMLA regulations", "8 USC § 1324a — I-9 employment eligibility", "15 USC § 1681b(b) — FCRA background-check notice", "Cal. Lab. Code § 2810.5 — Wage Theft Prevention Act notice", "NY Lab. Law § 195 — Wage notice and pay statements", "Mass. Gen. Laws ch. 149 § 148 — Wage notice", "Cal. Lab. Code § 227.3 — Accrued vacation as wages", "Cal. Lab. Code § 96(k) — Moonlighting protection", "Cal. Lab. Code § 432.9 — Pre-offer criminal history (Ban the Box)" ], "chaindoc_blog": [ "https://chaindoc.io/blog/legal-strength-blockchain-e-signatures" ] }, "lastVerified": "2026-05-10", "confidence": "high", "validationConflicts": [] }, { "type": "operating-agreement", "name": "Operating Agreement (LLC)", "name_de": "Operating Agreement (LLC)", "category": "b2b-commercial", "schema_version": 1, "form_requirement": { "base": "free", "bgb_ref": "6 Del. C. § 18-101(9); 6 Del. C. § 18-201(d)", "alternatives": [ "electronic" ], "notes": "The Delaware LLC Act does not require any particular form. 6 Del. C. § 18-201(d) expressly recognises that the Operating Agreement may be written, oral, or implied — though a written agreement is universal practice and required as a practical matter for tax / banking / financing purposes. Electronic execution per ESIGN/UETA universally valid. Note: Certificate of Formation (the public charter document) must be filed with the Delaware Secretary of State under 6 Del. C. § 18-201." }, "required_clauses": [ { "id": "formation_and_purpose", "name": "Formation, Name, Purpose, and Term", "name_de": "Formation, Name, Purpose, and Term", "mandatory": true, "bgb_ref": "6 Del. C. § 18-201; 6 Del. C. § 18-801", "notes": "Reference to Certificate of Formation filing date and file number; LLC name (matching Certificate); purpose (broad — 'any lawful business' is statutory default and standard); term (perpetual is standard; statutory default per 6 Del. C. § 18-801)." }, { "id": "members_and_interests", "name": "Members and Interests (Schedule)", "name_de": "Members and Interests (Schedule)", "mandatory": true, "notes": "Schedule of Members listing each member, initial capital contribution, and percentage interest. Updated on admission, withdrawal, or transfer. Distinction between Member (full rights) and Economic Interest Holder (allocations and distributions only) per 6 Del. C. § 18-702." }, { "id": "management_structure", "name": "Management Structure", "name_de": "Management Structure", "mandatory": true, "bgb_ref": "6 Del. C. § 18-401; 6 Del. C. § 18-402", "guidance": "Member-managed (default) or Manager-managed (must be expressly elected). Hybrid Board of Managers possible. Authority of each manager to bind the LLC must be explicit; statutory default agency rules apply to member-managed structures." }, { "id": "capital_contributions", "name": "Capital Contributions", "name_de": "Capital Contributions", "mandatory": true, "bgb_ref": "6 Del. C. § 18-501; 6 Del. C. § 18-502", "notes": "Initial contributions (cash/property/services), additional capital calls, and consequences of default (dilution, loan-treatment, forced sale). Statutory default: no obligation to contribute additional capital absent express agreement (§ 18-502)." }, { "id": "capital_accounts_allocations", "name": "Capital Accounts and Allocations", "name_de": "Capital Accounts and Allocations", "mandatory": true, "bgb_ref": "IRC § 704(b); Treas. Reg. § 1.704-1", "guidance": "Capital account maintenance per Treas. Reg. § 1.704-1(b)(2)(iv); allocations with substantial economic effect; qualified income offset (QIO); minimum gain chargeback for non-recourse debt. Standard form-book provisions; do not draft from scratch." }, { "id": "distributions", "name": "Distributions and Tax Distributions", "name_de": "Distributions and Tax Distributions", "mandatory": true, "notes": "Tax distributions (allocated taxable income × assumed combined federal-state rate, typically 40-50%) to fund member tax liability on pass-through income. Distribution waterfall: return of capital, preferred return, catch-up, promote / carried interest split. Numerical examples in appendix recommended." }, { "id": "tax_treatment", "name": "Tax Treatment and Elections", "name_de": "Tax Treatment and Elections", "mandatory": true, "bgb_ref": "Treas. Reg. § 301.7701-3; IRC § 6221 (BBA partnership representative)", "notes": "Default partnership treatment under check-the-box (Form 1065 + K-1). Multi-member LLC files Form 1065; single-member LLC is disregarded entity. Election to be taxed as C-corp or S-corp via Form 8832/2553 typically requires member consent. BBA partnership representative designation post-2018." }, { "id": "voting", "name": "Member Voting and Meetings", "name_de": "Member Voting and Meetings", "mandatory": true, "bgb_ref": "6 Del. C. § 18-302", "notes": "Voting basis (per-capita / pro-rata to percentage interest / class-based). Supermajority or unanimous consent for major decisions (amendment, admission, dissolution, sale of assets, conversion). Meeting and written-consent procedures." }, { "id": "transfer_restrictions", "name": "Transfer Restrictions", "name_de": "Transfer Restrictions", "mandatory": true, "bgb_ref": "6 Del. C. § 18-702", "notes": "Consent requirements, ROFR, ROFO, drag-along, tag-along, permitted transferees. Transferee without LLC consent becomes Economic Interest Holder only (no voting, no information rights). Transfer in breach typically void." }, { "id": "buy_sell", "name": "Buy-Sell Provisions", "name_de": "Buy-Sell Provisions", "mandatory": true, "notes": "Triggers: death, disability, divorce, bankruptcy, termination of employment, deadlock, retirement. Valuation: appraisal / formula (multiple of EBITDA, book value) / pre-agreed schedule / insurance-funded. Texas shoot-out for 50/50 deadlocks." }, { "id": "fiduciary_duties", "name": "Fiduciary Duties and Exculpation", "name_de": "Fiduciary Duties and Exculpation", "mandatory": true, "bgb_ref": "6 Del. C. § 18-1101(c); 6 Del. C. § 18-1104", "guidance": "Delaware permits modification or elimination of fiduciary duties via express provision — but cannot eliminate the implied covenant of good faith and fair dealing. Modifications must be express and specific (Gatz Properties v. Auriga Capital, 59 A.3d 1206 (Del. 2012)). Default (post-2013 amendments to § 18-1104): traditional fiduciary duties apply unless modified." }, { "id": "indemnification", "name": "Indemnification", "name_de": "Indemnification", "mandatory": true, "bgb_ref": "6 Del. C. § 18-108", "notes": "Broad indemnification permitted — among the broadest in US business-entity law, broader than DGCL § 145 for corporations. Typically extended to managers, members (in fiduciary-eliminated structures), officers, agents. Carve-outs for fraud and implied-covenant breach." }, { "id": "dissolution_winding_up", "name": "Dissolution and Winding Up", "name_de": "Dissolution and Winding Up", "mandatory": true, "bgb_ref": "6 Del. C. § 18-801; 6 Del. C. § 18-802; 6 Del. C. § 18-804", "notes": "Triggering events; judicial dissolution under § 18-802 ('not reasonably practicable') as deadlock remedy. Winding-up procedure: liquidator, priority of payments (creditors, return of capital, distribution per waterfall). Chancery generally restrictive on dissolution (Haley v. Talcott)." }, { "id": "governing_law_dispute", "name": "Governing Law and Dispute Resolution", "name_de": "Governing Law and Dispute Resolution", "mandatory": true, "notes": "Delaware law as choice for sophisticated entities. AAA/JAMS arbitration with Delaware seat or Court of Chancery jurisdiction retention. Expert determination for valuation disputes. Mediation precondition common." } ], "optional_clauses": [ { "id": "confidentiality", "name": "Confidentiality", "name_de": "Confidentiality", "notes": "Non-public LLC information confidential; member may not use except for LLC purposes. Survives membership." }, { "id": "non_compete", "name": "Non-Competition", "name_de": "Non-Competition", "typical": "1-3 years post-membership", "bgb_ref": "Cal. B&P § 16600 (California — void); state-by-state", "notes": "California voids per Cal. B&P § 16600; sale-of-business exception in § 16601 may apply to member buy-outs. Other states enforce subject to reasonableness in scope, duration, geography." }, { "id": "non_solicit", "name": "Non-Solicitation", "name_de": "Non-Solicitation", "typical": "1-2 years", "notes": "Limited to LLC's customers, employees, vendors. Generally more enforceable than non-competes. California permits employee non-solicits subject to Edwards v. Arthur Andersen." }, { "id": "key_man_insurance", "name": "Key-Man Insurance / Buy-Sell Funding", "name_de": "Key-Man Insurance / Buy-Sell Funding", "notes": "Life/disability insurance on each member to fund death/disability buy-sell. LLC or members as policy owner; tax implications must be considered." }, { "id": "preemptive_rights", "name": "Pre-Emptive Rights", "name_de": "Pre-Emptive Rights", "notes": "Existing members' right to participate pro-rata in future issuances of interests. Distinct from ROFR (which applies to existing-member transfers)." }, { "id": "information_rights", "name": "Information Rights", "name_de": "Information Rights", "bgb_ref": "6 Del. C. § 18-305", "notes": "Statutory baseline under § 18-305 (financial statements, tax returns, member list, books and records). Operating Agreement may expand or contractually narrow (subject to outer limits)." } ], "court_cases": [ { "case": "Gatz Properties, LLC v. Auriga Capital Corp.", "year": 2012, "url": "https://courts.delaware.gov/Opinions/Download.aspx?id=180860", "relevance": "Delaware Supreme Court affirmed Chancellor Strine's finding of fiduciary breach but disagreed with broader dicta on default fiduciary duties in LLCs. Triggered 2013 amendments to 6 Del. C. § 18-1104 codifying that default fiduciary duties apply unless expressly modified or eliminated. 59 A.3d 1206." }, { "case": "Haley v. Talcott", "year": 2004, "url": "https://courts.delaware.gov/Opinions/Download.aspx?id=12586", "relevance": "Court of Chancery granted judicial dissolution of 50/50 LLC under 6 Del. C. § 18-802 despite Operating Agreement's exit mechanism, finding it was 'not reasonably practicable' to continue. Influential on the meaning of the § 18-802 standard. 864 A.2d 86." }, { "case": "Elf Atochem North America, Inc. v. Jaffari", "year": 1999, "url": "https://law.justia.com/cases/delaware/supreme-court/1999/727-a-2d-286-3.html", "relevance": "Delaware Supreme Court enforced an Operating Agreement's California-arbitration / California-law forum-selection clause against a Delaware-formation LLC, reaffirming 6 Del. C. § 18-1101's freedom-of-contract policy. 727 A.2d 286." } ], "further_reading": { "bgb_articles": [ "6 Del. C. § 18-101 — Delaware LLC Act Definitions", "6 Del. C. § 18-201 — Certificate of Formation", "6 Del. C. § 18-302 — Member voting", "6 Del. C. § 18-305 — Member information rights", "6 Del. C. § 18-401 — Manager admission and powers", "6 Del. C. § 18-501 — Form of contribution", "6 Del. C. § 18-502 — Liability for contributions", "6 Del. C. § 18-702 — Assignment of LLC interest", "6 Del. C. § 18-801 — Dissolution", "6 Del. C. § 18-802 — Judicial dissolution", "6 Del. C. § 18-1101 — Freedom of contract; fiduciary duty modification", "6 Del. C. § 18-1104 — Default fiduciary duties", "IRC § 704 — Partner's distributive share", "Treas. Reg. § 1.704-1 — Capital accounts and substantial economic effect", "Treas. Reg. § 301.7701-3 — Check-the-box classification", "Revised Uniform Limited Liability Company Act (RULLCA)" ], "chaindoc_blog": [ "https://chaindoc.io/blog/contract-management-it", "https://chaindoc.io/blog/legal-strength-blockchain-e-signatures" ] }, "lastVerified": "2026-05-10", "confidence": "high", "validationConflicts": [] }, { "type": "privacy-policy", "name": "Privacy Policy", "name_de": "Privacy Policy", "category": "b2c-consumer", "schema_version": 1, "form_requirement": { "base": "electronic", "bgb_ref": "Cal. Civ. Code § 1798.130; 11 CCR § 7011; Va. Code § 59.1-578; 16 CFR § 312.4", "alternatives": [], "notes": "Privacy policy is a public disclosure document published electronically on the business website. The CCPA requires the policy to be accessible from every page that collects personal information; California also requires homepage 'Do Not Sell or Share My Personal Information' and 'Limit the Use of My Sensitive Personal Information' links (Cal. Civ. Code § 1798.135). Must be updated at least every 12 months (11 CCR § 7011(e)) with the date of the most recent update prominently disclosed. For COPPA-covered services, a separate children's privacy notice must be linked from every place children's personal information is collected (16 CFR § 312.4). Mobile applications: privacy policy link required at the app-store listing and within the app itself." }, "required_clauses": [ { "id": "business_identity", "name": "Business Identity and Contact", "name_de": "Business Identity and Contact", "mandatory": true, "bgb_ref": "11 CCR § 7011(e)(1); Va. Code § 59.1-578(C)(1)", "notes": "Full legal name, trading name(s), principal place of business, and at least one method for consumers to contact the business about privacy questions (typically privacy@example.com and a postal address). Where a privacy officer or DPO is designated, name and contact details. Where the business acts as a service provider or processor for another entity's personal information, that role and the identity of the controller must be disclosed." }, { "id": "categories_of_pi_collected", "name": "Categories of Personal Information Collected", "name_de": "Categories of Personal Information Collected", "mandatory": true, "bgb_ref": "Cal. Civ. Code § 1798.130(a)(5)(B); 11 CCR § 7011(e)(2)", "notes": "List of categories of personal information collected in the preceding twelve months, mapped to the CCPA's eleven enumerated categories. Specific pieces of information enumerated within each category are more useful than category labels alone. Sensitive PI categories (Cal. Civ. Code § 1798.140(ae)) must be separately identified." }, { "id": "sources_of_pi", "name": "Sources of Personal Information", "name_de": "Sources of Personal Information", "mandatory": true, "bgb_ref": "11 CCR § 7011(e)(3)", "notes": "Categorical disclosure of sources: directly from the consumer; from the consumer's device (cookies, analytics SDKs); from social media platforms on consumer login; from advertising networks; from data brokers; from public records; from service providers." }, { "id": "purposes_of_collection_use_disclosure", "name": "Business or Commercial Purposes", "name_de": "Business or Commercial Purposes", "mandatory": true, "bgb_ref": "11 CCR § 7011(e)(4); Va. Code § 59.1-578(C)(2)", "guidance": "For each category of personal information, the specific purposes for which it is collected, used, and disclosed. Purposes must be specific enough to be intelligible — generic 'improve the service' or 'for business purposes' formulations fail the specificity standard." }, { "id": "third_party_recipients", "name": "Categories of Recipients", "name_de": "Categories of Recipients", "mandatory": true, "bgb_ref": "11 CCR § 7011(e)(5); Va. Code § 59.1-578(C)(3)", "notes": "Categorical disclosure (service providers, advertising partners, affiliates, professional advisors, law enforcement). Under the CCPA, specific disclosure of any sale or sharing of personal information for cross-context behavioural advertising is required. Pixel-based advertising integrations typically trigger both sale and share definitions." }, { "id": "retention_periods", "name": "Retention Periods", "name_de": "Retention Periods", "mandatory": true, "bgb_ref": "11 CCR § 7011(e)(4)", "notes": "Length of time the business intends to retain each category of personal information, or — where this is not possible — the criteria used to determine that period. Vague 'as long as necessary' formulations fail the specificity standard." }, { "id": "sale_share_disclosure", "name": "Sale and Sharing Disclosure", "name_de": "Sale and Sharing Disclosure", "mandatory": true, "bgb_ref": "Cal. Civ. Code § 1798.135; 11 CCR § 7011(e)(6)", "notes": "Whether the business sells or shares personal information, the categories of personal information sold or shared, and the categories of third parties to which the personal information is sold or shared. If the business has not sold or shared personal information in the preceding twelve months, that must be stated explicitly. Annual metrics disclosure required by 11 CCR § 7102 for businesses processing the personal information of 4M+ consumers." }, { "id": "consumer_rights_and_exercise", "name": "Consumer Rights and Exercise Mechanisms", "name_de": "Consumer Rights and Exercise Mechanisms", "mandatory": true, "bgb_ref": "Cal. Civ. Code §§ 1798.100-1798.130; 11 CCR § 7020-7027", "notes": "Each applicable right enumerated by name: right to know (categories + specific pieces), right to delete, right to correct, right to opt out of sale or sharing, right to limit the use and disclosure of sensitive PI, right to data portability, right to non-discrimination. At least two designated methods for submitting a verifiable consumer request (typically webform + toll-free number, or webform + email). Authorised-agent procedures must be disclosed. Virginia adds right to appeal an adverse decision (§ 59.1-577(C)); CO and CT similar." }, { "id": "non_discrimination_and_financial_incentives", "name": "Non-Discrimination and Financial Incentives", "name_de": "Non-Discrimination and Financial Incentives", "mandatory": true, "bgb_ref": "Cal. Civ. Code § 1798.125; 11 CCR § 7016", "notes": "Statement that the business will not discriminate against consumers for exercising their privacy rights. Where the business offers financial incentives in exchange for the collection, sale, or retention of personal information, the material terms of the incentive must be disclosed in a separate 'Notice of Financial Incentive', including a good-faith estimate of the value of the personal information." }, { "id": "universal_opt_out_recognition", "name": "Universal Opt-Out Signal Recognition", "name_de": "Universal Opt-Out Signal Recognition", "mandatory": true, "bgb_ref": "11 CCR § 7025; Colo. Rev. Stat. § 6-1-1306(1)(a)(IV); Conn. Gen. Stat. § 42-520(e)", "notes": "California mandatory recognition under 11 CCR § 7025; Colorado, Connecticut, Texas, Montana, Delaware, Oregon, New Jersey also mandate recognition of universal opt-out preference signals (in practice, Global Privacy Control). The privacy policy must disclose how the business recognises GPC and what processing operations the signal opts out of. Implementation at the user-agent level, not merely tied to a logged-in account." }, { "id": "children_privacy", "name": "Children's Privacy", "name_de": "Children's Privacy", "mandatory": true, "bgb_ref": "15 USC § 6501; 16 CFR § 312.4; Cal. Civ. Code § 1798.120(c); Md. Code Com. Law § 14-4607", "notes": "Where the service is directed to children under 13 or the business has actual knowledge of collecting from children under 13, COPPA requires a children-specific notice: types of personal information collected, parental rights, parental consent mechanism (16 CFR § 312.5(b)), contact information. Several state laws (CTDPA, CPA, MDPA) extend opt-in consent requirements to minors 13-17 for targeted advertising, sale, and profiling. Maryland's MDPA prohibits sale of any minor's data outright." }, { "id": "last_updated_date", "name": "Last Updated Date and Change Log", "name_de": "Last Updated Date and Change Log", "mandatory": true, "bgb_ref": "11 CCR § 7011(e)", "notes": "Date of the most recent update prominently disclosed at the top of the privacy policy. Material changes require contemporaneous notification — banner, email to known customers, in-product modal. A change-log preserving historical versions is good practice and increasingly the convention in CPPA enforcement matters. Review and update at least every 12 months." } ], "optional_clauses": [ { "id": "sensitive_pi_limit_use", "name": "Sensitive PI 'Limit Use' Notice", "name_de": "Sensitive PI 'Limit Use' Notice", "bgb_ref": "Cal. Civ. Code § 1798.121; 11 CCR § 7015", "notes": "Where sensitive PI is used or disclosed for purposes other than the enumerated permitted purposes in § 1798.121, the 'Limit the Use of My Sensitive Personal Information' right and a homepage link must be disclosed. A single combined 'Your Privacy Choices' link with the CPPA-prescribed icon is permitted in lieu of separate links." }, { "id": "international_transfers", "name": "International Transfers", "name_de": "International Transfers", "notes": "Where personal information is transferred outside the United States or to international processors, the categories of recipients and the safeguards applied should be disclosed. For businesses also subject to GDPR (serving EU residents), GDPR Articles 13(1)(f) and 14(1)(f) transfer-mechanism disclosure obligations overlay — EU-US Data Privacy Framework (10 July 2023) or Standard Contractual Clauses serve as the transfer mechanism." }, { "id": "security_summary", "name": "Security Measures Summary", "name_de": "Security Measures Summary", "notes": "Summary description of technical and organisational security measures (encryption in transit and at rest, access controls, regular security assessment). Detailed disclosure may aid attackers; high-level summary plus reference to industry-standard frameworks (SOC 2, ISO 27001) is the convention." }, { "id": "breach_notification_commitment", "name": "Breach Notification Commitment", "name_de": "Breach Notification Commitment", "bgb_ref": "Cal. Civ. Code § 1798.82; HIPAA 45 CFR §§ 164.400-414; FTC Safeguards Rule 16 CFR § 314.5", "notes": "All 50 states have data-breach notification statutes. For HIPAA-covered entities, the chain under 45 CFR §§ 164.400-414 applies. For GLBA financial institutions, FTC Safeguards Rule breach-notification under 16 CFR § 314.5 (effective May 2024) requires FTC notification within 30 days of discovery for breaches affecting 500+ consumers." }, { "id": "shine_the_light", "name": "California Shine the Light Disclosure", "name_de": "California Shine the Light Disclosure", "bgb_ref": "Cal. Civ. Code § 1798.83", "notes": "Pre-CCPA California statute requiring businesses that disclose personal information to third parties for the third party's direct marketing purposes to honour a Shine the Light request annually. Largely superseded by CCPA but still nominally in force; standard disclosure is one line in the California-specific section." }, { "id": "state_specific_addenda", "name": "State-Specific Addenda", "name_de": "State-Specific Addenda", "notes": "Virginia (right to appeal), Colorado (universal opt-out), Connecticut, Texas, Oregon, Montana, Delaware, New Jersey, New Hampshire, Maryland (data minimisation + minor-data sale ban), Minnesota, and other state-unique rights and processes. Addenda follow the main body for state-unique items." } ], "forbidden_in_agb": [ { "clause_id": "do_not_sell_misrepresentation", "name_de": "'We Do Not Sell' Misrepresentation", "bgb_ref": "Cal. Civ. Code § 1798.140(ad)-(ah); 15 USC § 45", "consequence": "The CCPA's expansive 'sale' and 'share' definitions capture pixel-based advertising integrations even when no money changes hands. A privacy policy denial of sale or sharing while operating advertising-pixel integrations meeting the statutory definitions is both a CCPA violation and an FTC Act § 5 deceptive practice. CPPA enforcement matters in 2023-2025 (notably Sephora, $1.2M, 2022) targeted this pattern." }, { "clause_id": "discriminatory_pricing", "name_de": "Discriminatory Pricing Based on Opt-Out", "bgb_ref": "Cal. Civ. Code § 1798.125", "consequence": "CCPA prohibits denial of goods or services, charging different prices, or providing a different level of quality based on the consumer's exercise of CCPA rights, except where the difference is reasonably related to the value of the consumer's data and disclosed through a Notice of Financial Incentive." }, { "clause_id": "dark_patterns_opt_out", "name_de": "Dark-Pattern Opt-Out Interface", "bgb_ref": "Cal. Civ. Code § 1798.140(l); 11 CCR § 7004", "consequence": "Dark patterns — user-interface designs whose purpose or effect is to substantially subvert or impair user autonomy — are explicitly prohibited. An opt-out flow that requires more clicks than an opt-in, or that uses confusing language to discourage opt-out, violates the regulation." }, { "clause_id": "coppa_no_parental_consent", "name_de": "Children-Data Collection Without Verifiable Parental Consent", "bgb_ref": "15 USC § 6501; 16 CFR § 312.5", "consequence": "Collecting personal information from children under 13 without prior verifiable parental consent is a per se COPPA violation. FTC civil penalties run up to $51,744 per violation as of 2024. Major settlements: YouTube ($170M, 2019), TikTok / Musical.ly ($5.7M, 2019)." }, { "clause_id": "material_misstatement", "name_de": "Material Misstatement of Data-Handling Practices", "bgb_ref": "15 USC § 45 (FTC Act § 5)", "consequence": "Misrepresenting the categories of personal information collected, the third parties with whom it is shared, the retention period, or the security measures applied is an FTC Act § 5 deceptive practice. FTC enforcement: In re Snapchat (2014), In re Uber (2017), In re Zoom (2020), In re Facebook ($5B, 2019)." } ], "court_cases": [ { "case": "FTC v. Facebook, Inc. (now Meta Platforms, Inc.)", "year": 2019, "url": "https://www.ftc.gov/legal-library/browse/cases-proceedings/092-3184-c-4365-facebook-inc", "relevance": "$5 billion FTC § 5 settlement — the largest privacy enforcement action in US history. Established the modern template for 20-year consent decrees with biennial third-party privacy assessments and corporate-governance requirements." }, { "case": "FTC v. Equifax, Inc.", "year": 2019, "url": "https://www.ftc.gov/legal-library/browse/cases-proceedings/refunds/equifax-data-breach-settlement", "relevance": "$575M (up to $700M) joint FTC / CFPB / state-AG settlement for the 2017 breach affecting 147M consumers. Significant FCRA / state breach-notification implications and the largest data-breach settlement at the time." }, { "case": "FTC v. Epic Games, Inc.", "year": 2022, "url": "https://www.ftc.gov/legal-library/browse/cases-proceedings/192-3203-epic-games-inc", "relevance": "$520M total — $275M COPPA settlement and $245M dark-pattern settlement. The COPPA component is the largest COPPA penalty ever; the dark-pattern component established the FTC's modern dark-pattern enforcement template." }, { "case": "FTC v. YouTube LLC and Google LLC", "year": 2019, "url": "https://www.ftc.gov/legal-library/browse/cases-proceedings/172-3083-google-llc-youtube-llc", "relevance": "$170M COPPA settlement — at the time the largest COPPA penalty in history. Established that platforms with actual knowledge of child-directed content on third-party channels can be COPPA-liable even when not the primary content creator." }, { "case": "People v. Sephora USA, Inc.", "year": 2022, "url": "https://oag.ca.gov/news/press-releases/attorney-general-bonta-announces-settlement-sephora-part-ongoing-enforcement", "relevance": "$1.2M California AG settlement — first major CCPA enforcement action. Held that businesses that disclose personal information to third parties for cross-context behavioural advertising are engaged in 'sale' under CCPA § 1798.140(ad) and must honour 'Do Not Sell' opt-outs including the Global Privacy Control signal." }, { "case": "FTC v. BetterHelp, Inc.", "year": 2023, "url": "https://www.ftc.gov/legal-library/browse/cases-proceedings/2023169-betterhelp-inc-matter", "relevance": "$7.8M FTC settlement for sharing consumer health information (including mental-health intake responses) with Facebook, Snapchat, Criteo, and Pinterest for advertising while representing the information would be kept private. Established FTC enforcement template for health-data pixel-tracking." } ], "further_reading": { "bgb_articles": [ "Cal. Civ. Code §§ 1798.100-1798.199.100 — CCPA / CPRA", "11 CCR §§ 7000-7304 — CCPA Regulations", "Va. Code § 59.1-575 et seq. — VCDPA", "Colo. Rev. Stat. § 6-1-1301 et seq. — CPA", "Conn. Gen. Stat. § 42-515 et seq. — CTDPA", "Utah Code § 13-61-101 et seq. — UCPA", "Tex. Bus. & Com. Code § 541.001 et seq. — TDPSA", "Or. Rev. Stat. § 646A.570 et seq. — OCPA", "Md. Code Com. Law § 14-4601 et seq. — MDPA", "15 USC § 6501 et seq. — COPPA", "16 CFR Part 312 — COPPA Rule", "15 USC § 6801 et seq. — GLBA", "16 CFR Part 313 — GLBA Privacy Rule", "16 CFR Part 314 — GLBA Safeguards Rule", "45 CFR Part 164 — HIPAA Privacy, Security, Breach Notification", "15 USC § 45 — FTC Act § 5", "20 USC § 1232g — FERPA", "15 USC § 1681 et seq. — FCRA", "18 USC § 2510 et seq. — ECPA", "18 USC § 2710 — VPPA", "15 USC § 7701 et seq. — CAN-SPAM" ], "chaindoc_blog": [ "https://chaindoc.io/blog/legal-strength-blockchain-e-signatures" ] }, "lastVerified": "2026-05-10", "confidence": "high", "validationConflicts": [] }, { "type": "refund-policy", "name": "Refund / Return Policy", "name_de": "Refund / Return Policy", "category": "b2c-consumer", "schema_version": 1, "form_requirement": { "base": "electronic", "bgb_ref": "16 CFR Part 435 (MITOR); 15 USC § 8401 (ROSCA); 16 CFR Part 425 (Click-to-Cancel); Cal. B&P § 17600 et seq. (ARL); Cal. Civ. Code § 1723", "alternatives": [], "notes": "No federal default right of return — each merchant sets its own policy, subject to FTC Cooling-Off Rule (16 CFR Part 429) for door-to-door $25+ sales, FTC MITOR (16 CFR Part 435) for shipping delays on mail/internet/telephone orders, Magnuson-Moss (15 USC §§ 2301-2312) for written warranties, ROSCA + Click-to-Cancel (15 USC § 8401 + 16 CFR Part 425) for negative-option / auto-renewal, state ARLs (California, NY, IL, OR, VT, others), and state return-policy disclosure laws (Cal. Civ. Code § 1723, NY Gen. Bus. Law § 218-a, FL, MA, VA, others). Policy must be presented before consumer is charged; California ARL 'visual proximity' rule requires auto-renewal terms in immediate proximity to the consent button, not buried in linked ToS or privacy policy. Post-transaction acknowledgement (email with terms) required by California ARL and several other state ARLs. FTC Click-to-Cancel Rule's same-mechanism cancellation requirement: online sign-up means online cancellation, no telephone call, no retention queue." }, "required_clauses": [ { "id": "refund_window", "name": "Refund Window", "name_de": "Refund Window", "mandatory": true, "notes": "Time period during which a return or refund may be requested. For physical goods, 30 days from delivery is the de facto market standard; many retailers offer longer windows. For digital products, the policy may state 'no refunds' subject to applicable law. For subscriptions, the cancellation right is governed by auto-renewal statutes — cancellation prevents future charges; pro-rata refunds depend on business policy and state law." }, { "id": "refund_method", "name": "Refund Method", "name_de": "Refund Method", "mandatory": true, "notes": "Whether refund is to original payment method, to store credit, or at consumer's election. Original-payment-method refunds are the conservative default and avoid FTC § 5 / state-UDAP exposure; store-credit refunds may be permitted but must be conspicuously disclosed." }, { "id": "restocking_fees", "name": "Restocking Fees", "name_de": "Restocking Fees", "mandatory": true, "notes": "Whether restocking fees apply, the amount or percentage, and the conditions. Several state attorneys general have targeted excessive restocking fees as unfair practices; conspicuous disclosure is essential." }, { "id": "exceptions_and_exclusions", "name": "Exceptions and Exclusions", "name_de": "Exceptions and Exclusions", "mandatory": true, "notes": "Categories of merchandise excluded from the return policy — typically perishables, custom or personalised items, opened software or media, intimate apparel, hazardous materials, gift cards, final-sale items. Each exclusion must be conspicuously disclosed." }, { "id": "shipping_costs", "name": "Shipping Costs", "name_de": "Shipping Costs", "mandatory": true, "notes": "Whether consumer is responsible for return shipping costs, whether original shipping cost is refunded, and whether business provides prepaid return labels. For defective merchandise, seller typically covers return shipping under common-law and MITOR principles." }, { "id": "return_initiation_process", "name": "Process for Initiating a Return", "name_de": "Process for Initiating a Return", "mandatory": true, "notes": "Mechanism — webform, email, phone — for requesting a return authorisation. Where a return authorisation number (RMA) is required, the procedure for obtaining one. Required documentation (order number, reason for return, photographs of defective goods)." }, { "id": "auto_renewal_disclosure", "name": "Subscription Auto-Renewal Disclosure", "name_de": "Subscription Auto-Renewal Disclosure", "mandatory": true, "bgb_ref": "15 USC § 8401 (ROSCA); 16 CFR Part 425; Cal. B&P § 17602", "notes": "For subscription businesses: renewal frequency, renewal charge amount, cancellation method, renewal-reminder timing (where required by state law). Auto-renewal terms must be in visual proximity to the consent button at sign-up (California) and in the post-transaction confirmation email. Mayron v. Google (Cal. App. 2020) and follow-on California class actions invalidated consents where the auto-renewal terms appeared only in a privacy policy, ToS, or footer." }, { "id": "cancellation_mechanism", "name": "Cancellation Mechanism (Same-Mechanism)", "name_de": "Cancellation Mechanism (Same-Mechanism)", "mandatory": true, "bgb_ref": "16 CFR § 425.6; Cal. B&P § 17602(c)", "notes": "FTC Click-to-Cancel Rule requires same-mechanism cancellation: consumer must be able to cancel through the same medium used to sign up (online sign-up → online cancellation, no telephone, no retention queue, no representative chat). Cancellation must be reachable from the account-management page within the same number of steps as sign-up. California B&P § 17602(c) (2018, expanded 2022 by SB 313) parallels this for online purchases." }, { "id": "post_transaction_acknowledgement", "name": "Post-Transaction Acknowledgement", "name_de": "Post-Transaction Acknowledgement", "mandatory": true, "bgb_ref": "Cal. B&P § 17602(a)(3)", "notes": "California ARL and several other state ARLs require post-transaction acknowledgement by email or other receipt that includes the auto-renewal terms (renewal frequency, charge amount, cancellation method, next renewal date) in a clear, retainable format." }, { "id": "free_trial_conversion_notice", "name": "Free-Trial Conversion Notice", "name_de": "Free-Trial Conversion Notice", "mandatory": true, "bgb_ref": "Cal. B&P § 17602; 16 CFR Part 425", "notes": "Where the subscription includes a free trial of more than 31 days (California) or where the FTC Click-to-Cancel Rule applies: notice 3-21 days before automatic conversion to paid, with the renewal terms and cancellation method." }, { "id": "renewal_reminder_annual", "name": "Renewal Reminder for Annual Subscriptions", "name_de": "Renewal Reminder for Annual Subscriptions", "mandatory": true, "bgb_ref": "Cal. B&P § 17602(a)(7)", "notes": "Where the subscription term is annual or longer: a renewal reminder 15-45 days before each renewal (California requirement; analogous in NY, IL, OR, others)." }, { "id": "defective_warranty_interaction", "name": "Defective Merchandise / Warranty Interaction", "name_de": "Defective Merchandise / Warranty Interaction", "mandatory": true, "bgb_ref": "15 USC §§ 2301-2312 (Magnuson-Moss); UCC §§ 2-314, 2-315", "notes": "Where merchandise is defective, the interaction between the return policy and any written warranty under Magnuson-Moss. The return policy should not purport to limit warranty rights. Magnuson-Moss prohibits disclaimer of implied warranties on consumer products where a written or service-contract warranty is offered." }, { "id": "contact_information", "name": "Contact Information", "name_de": "Contact Information", "mandatory": true, "notes": "Email, telephone, postal address for refund-related inquiries." } ], "optional_clauses": [ { "id": "cooling_off_rule_door_to_door", "name": "FTC Cooling-Off Rule Disclosure", "name_de": "FTC Cooling-Off Rule Disclosure", "bgb_ref": "16 CFR Part 429", "notes": "For door-to-door or off-premises sales of $25+ ($130+ at the buyer's home): seller must orally inform the buyer of the right to cancel within 3 business days, furnish two copies of a written notice of cancellation in the language used for the sales pitch. Does not apply to internet, mail, or telephone sales, real-estate, insurance, or securities." }, { "id": "mitor_shipping_disclosure", "name": "MITOR Shipping-Time Disclosure", "name_de": "MITOR Shipping-Time Disclosure", "bgb_ref": "16 CFR Part 435", "notes": "For mail, internet, or telephone orders: ship within stated time or 30 days; if not, provide option-notice giving consumer option to consent to delayed shipment or to cancel and receive a prompt refund. Subsequent delays require additional consent." }, { "id": "gift_returns", "name": "Gift Returns", "name_de": "Gift Returns", "notes": "Whether merchandise received as a gift may be returned by the recipient, the form of refund (typically store credit to the recipient), and any documentation required." }, { "id": "gift_card_rules", "name": "Gift Card Rules", "name_de": "Gift Card Rules", "bgb_ref": "12 CFR § 1005.20 (CARD Act); Cal. Civ. Code § 1749.5", "notes": "Cash value cannot expire for at least 5 years (federal CARD Act); inactivity fees prohibited within first 12 months and limited thereafter; fees and expiration dates must be conspicuously disclosed on the card. California prohibits cash-value expiration entirely; Massachusetts and New Jersey have stricter state rules." }, { "id": "magnuson_moss_pre_sale_availability", "name": "Magnuson-Moss Pre-Sale Warranty Availability", "name_de": "Magnuson-Moss Pre-Sale Warranty Availability", "bgb_ref": "16 CFR Part 702", "notes": "For consumer products costing more than $15 with a written warranty: warranty terms must be available for the consumer to examine before sale. For internet sales, this is implemented by linking the warranty terms from the product page." }, { "id": "negative_option_billing_info_sharing", "name": "Negative-Option Billing-Information Sharing Prohibition", "name_de": "Negative-Option Billing-Information Sharing Prohibition", "bgb_ref": "15 USC § 8403 (ROSCA)", "notes": "ROSCA prohibits sharing of billing information with third parties in connection with internet post-transaction marketing without express informed consent. The 'post-transaction third-party seller' practice that led to ROSCA's enactment (Vertrue, Affinion, MemberWorks) is per-se prohibited." } ], "forbidden_in_agb": [ { "clause_id": "pre_checked_auto_renewal", "name_de": "Pre-Checked Auto-Renewal Consent", "bgb_ref": "15 USC § 8401 (ROSCA); 16 CFR Part 425; Cal. B&P § 17602", "consequence": "ROSCA, FTC Click-to-Cancel Rule, and California ARL each require affirmative, conspicuous consent to recurring charges. Pre-checked boxes or buried disclosure violate the rules. FTC penalties under § 5 / ROSCA up to $51,744 per violation; California civil penalties under the UCL and CLRA." }, { "clause_id": "dark_pattern_cancellation_flow", "name_de": "Dark-Pattern Cancellation Flow", "bgb_ref": "16 CFR § 425.6", "consequence": "Multi-step retention queues, mandatory representative calls, repeated 'Are you sure?' prompts, hidden cancel buttons — all violate FTC Click-to-Cancel Rule's same-mechanism cancellation requirement. Enforcement: FTC v. Amazon.com (W.D. Wash. 2023, ongoing); FTC v. Vonage ($100M, 2022); FTC v. WW International / Weight Watchers (2022)." }, { "clause_id": "all_sales_final_no_disclosure", "name_de": "'All Sales Final' Without Point-of-Sale Disclosure", "bgb_ref": "Cal. Civ. Code § 1723; N.Y. Gen. Bus. Law § 218-a", "consequence": "Where California Civ. Code § 1723 or analogous state statutes apply, failure to conspicuously post a return policy at the point of sale defaults to a satisfaction-guarantee right — full cash refund within 7 days in California." }, { "clause_id": "auto_renewal_terms_in_footer_only", "name_de": "Auto-Renewal Terms in Privacy Policy or Footer Only", "bgb_ref": "Cal. B&P § 17602(a)(1); Mayron v. Google (Cal. App. 2020)", "consequence": "California ARL 'visual proximity' rule requires auto-renewal terms in immediate proximity to the consent button. Mayron v. Google and follow-on cases have invalidated consents where the disclosure was only in linked ToS or privacy policy. Class-action exposure plus rescission of all auto-renewal charges." }, { "clause_id": "misrepresentation_of_refund_policy", "name_de": "Misrepresentation of Refund Policy", "bgb_ref": "15 USC § 45; state UDAP statutes", "consequence": "Stating '30-day money-back guarantee' in advertising while operationally refusing refunds, or imposing undisclosed restrictions, is an FTC § 5 deceptive practice and a state-UDAP violation in every state." }, { "clause_id": "free_trial_conversion_no_notice", "name_de": "Free-Trial Conversion Without Notice", "bgb_ref": "Cal. B&P § 17602(a)(7); 16 CFR Part 425", "consequence": "California requires notice 3-21 days before conversion of a free trial longer than 31 days. FTC Click-to-Cancel Rule extends this to most free trials. Charging consumer at conversion without notice is per-se non-compliant." }, { "clause_id": "gift_card_expiration_within_5_years", "name_de": "Gift-Card Cash-Value Expiration Within 5 Years", "bgb_ref": "12 CFR § 1005.20; Cal. Civ. Code § 1749.5", "consequence": "CARD Act 12 CFR § 1005.20 prohibits cash-value expiration within 5 years. California Civ. Code § 1749.5 prohibits cash-value expiration entirely. Massachusetts and New Jersey have stricter state rules." } ], "court_cases": [ { "case": "FTC v. Amazon.com, Inc.", "year": 2023, "url": "https://www.ftc.gov/legal-library/browse/cases-proceedings/2023068-amazoncom-inc-prime-enrollment-cancellation", "relevance": "FTC sued Amazon under § 5 and ROSCA for dark-pattern enrolment of Prime members and a multi-step cancellation flow internally codenamed 'Iliad' designed to deter cancellation. Foundational matter for the FTC's modern Click-to-Cancel enforcement. W.D. Wash., pending as of mid-2026." }, { "case": "FTC v. Vonage Holdings Corp.", "year": 2022, "url": "https://www.ftc.gov/legal-library/browse/cases-proceedings/192-3204-vonage-holdings-corp", "relevance": "$100 million FTC settlement for junk fees and dark-pattern cancellation flow requiring consumers to speak with retention representatives. Established the FTC's modern enforcement template for subscription dark patterns." }, { "case": "FTC v. WW International, Inc. (Weight Watchers / Kurbo)", "year": 2022, "url": "https://www.ftc.gov/legal-library/browse/cases-proceedings/2023035-ww-international-inc", "relevance": "$1.5M FTC settlement (with deletion of unlawfully collected children's data) for COPPA and ROSCA violations — collecting personal information from children under 13 through the Kurbo by WW weight-loss app and difficult cancellation. Joint COPPA + ROSCA enforcement." }, { "case": "Mayron v. Google LLC", "year": 2020, "url": "https://law.justia.com/cases/california/court-of-appeal/2020/h045745.html", "relevance": "California Court of Appeal held that Google's display of auto-renewal terms only in linked Terms of Service did not satisfy the ARL 'visual proximity' rule. Foundational California precedent invalidating auto-renewal consents where disclosure is not immediately adjacent to the consent button. 54 Cal. App. 5th 566." }, { "case": "FTC v. AT&T Mobility, LLC", "year": 2019, "url": "https://www.ftc.gov/legal-library/browse/cases-proceedings/122-3253-att-mobility-llc", "relevance": "$60M FTC settlement for misleading 'unlimited' data plan advertising and undisclosed throttling. Foundational FTC § 5 deceptive-advertising matter cited in subscription-business enforcement." }, { "case": "Williams-Sonoma, Inc. v. Superior Court (Davis)", "year": 2017, "url": "https://law.justia.com/cases/california/court-of-appeal/2017/a149924.html", "relevance": "California Court of Appeal addressed standing under the California ARL — consumer has private right of action under CLRA for ARL violations. Established the modern CLRA-based ARL class-action template. 16 Cal. App. 5th 511." } ], "further_reading": { "bgb_articles": [ "16 CFR Part 429 — FTC Cooling-Off Rule", "16 CFR Part 435 — FTC Mail, Internet, or Telephone Order Merchandise Rule (MITOR)", "15 USC §§ 2301-2312 — Magnuson-Moss Warranty Act", "15 USC § 2308 — Magnuson-Moss limitations on disclaimer", "16 CFR Part 702 — Magnuson-Moss pre-sale availability", "16 CFR Part 700 — Magnuson-Moss interpretation", "15 USC § 8401 et seq. — ROSCA", "16 CFR Part 425 — FTC Click-to-Cancel / Negative Option Rule", "Cal. B&P § 17600 et seq. — California ARL", "Cal. B&P § 17602 — California ARL consent requirements", "Cal. Civ. Code § 1723 — California return-policy disclosure", "Cal. Civ. Code § 1750 et seq. — CLRA", "Cal. Civ. Code § 1749.5 — California gift-card rules", "N.Y. Gen. Bus. Law § 218-a — NY return-policy disclosure", "N.Y. Gen. Bus. Law § 527-a — NY ARL", "9 V.S.A. § 2454a — Vermont ARL", "12 CFR § 1005.20 — CARD Act gift-card rules", "15 USC § 1693l-1 — CARD Act", "15 USC § 45 — FTC Act § 5", "UCC § 2-314 — implied warranty of merchantability", "UCC § 2-315 — implied warranty of fitness for particular purpose", "UCC § 2-316 — exclusion or modification of warranties" ], "chaindoc_blog": [ "https://chaindoc.io/blog/legal-strength-blockchain-e-signatures" ] }, "lastVerified": "2026-05-10", "confidence": "high", "validationConflicts": [] }, { "type": "reseller", "name": "Reseller / Distribution Agreement", "name_de": "Reseller / Distribution Agreement", "category": "b2b-commercial", "schema_version": 1, "form_requirement": { "base": "free", "bgb_ref": "UCC § 2-201 governs underlying sales of goods $500+; framework agreement itself not subject to Statute of Frauds by subject matter", "alternatives": [ "electronic" ], "notes": "No US Statute of Frauds category covers distribution-framework agreements as such. Underlying purchase orders for goods $500+ require a signed writing under UCC § 2-201 (subject to the merchant-confirmation exception in § 2-201(2)). Multi-year exclusivity clauses may trigger the one-year prong of the Statute of Frauds if they cannot by their terms be performed within one year. Electronic execution per ESIGN/UETA universally valid." }, "required_clauses": [ { "id": "parties_and_classification", "name": "Parties and Classification Recital", "name_de": "Parties and Classification Recital", "mandatory": true, "notes": "Legal entity names, state of incorporation, principal place of business. Explicit recital of relationship: independent contractor distribution, not agency, not employment, not franchise, not joint venture. Critical for franchise-classification defence under 16 CFR § 436." }, { "id": "appointment_and_territory", "name": "Appointment and Territory", "name_de": "Appointment and Territory", "mandatory": true, "bgb_ref": "15 USC § 1; Continental T.V. v. GTE Sylvania", "guidance": "Exclusive vs. non-exclusive vs. protected. Territory defined precisely (postal codes / counties / states / countries). Manufacturer's reservation of direct-sale rights (house accounts, national accounts, online sales). Cross-territory sales prohibition or commission split. Vertical territorial restraints analysed under rule of reason post-Continental T.V." }, { "id": "products_and_pricing", "name": "Products and Pricing", "name_de": "Products and Pricing", "mandatory": true, "bgb_ref": "UCC § 2-305; 15 USC § 13", "notes": "Product schedule (with right to add/discontinue on notice). Wholesale price list (with right to adjust on notice). Volume discounts. Functional discounts. Robinson-Patman analysis: identical pricing to competing distributors absent cost-justification, meeting-competition, or functional-discount defence." }, { "id": "purchase_orders_and_minimums", "name": "Purchase Orders and Minimums", "name_de": "Purchase Orders and Minimums", "mandatory": true, "notes": "PO mechanics (lead times, acceptance, fulfilment). Annual minimum purchase commitment (typical performance trigger). Failure to meet minimum: termination right or loss of exclusivity." }, { "id": "payment_terms", "name": "Payment Terms", "name_de": "Payment Terms", "notes": "Net 30/60/90 for established distributors; prepayment or LC for new distributors. Late-fee formula. Credit limits. Security interest (UCC Article 9) for unpaid inventory." }, { "id": "trademark_license", "name": "Trademark License with Quality Control", "name_de": "Trademark License with Quality Control", "mandatory": true, "bgb_ref": "15 USC § 1055; 15 USC § 1127", "notes": "Limited, non-exclusive, non-transferable license to use manufacturer's trademarks in advertising, packaging, and promotion. Quality-control standards (marketing-material approval, use guidelines, audit rights). Naked-license risk per Eva's Bridal v. Halanick — licensor MUST actually exercise quality control or risks abandonment." }, { "id": "warranties_and_pass_through", "name": "Warranties and Pass-Through", "name_de": "Warranties and Pass-Through", "bgb_ref": "UCC §§ 2-312 to 2-318", "notes": "Manufacturer's express warranty to distributor; warranty pass-through to end users; allocation of warranty-service responsibility and reimbursement mechanics. Magnuson-Moss compliance for consumer products." }, { "id": "termination", "name": "Termination", "name_de": "Termination", "mandatory": true, "bgb_ref": "Wis. Stat. ch. 135; Conn. Gen. Stat. § 42-133e; N.J.S.A. 56:10", "notes": "Termination for cause (material breach + cure period, insolvency, change of control); termination for convenience (typically 90-180 days' notice). State dealer-protection statutes (WFDL Wis. Stat. ch. 135 requires good cause + 90 days' notice + 60-day cure for curable breaches; Connecticut and New Jersey similar) cannot be contracted around for in-state dealers." }, { "id": "post_termination_obligations", "name": "Post-Termination Obligations", "name_de": "Post-Termination Obligations", "mandatory": true, "notes": "Cease trademark use, return marketing materials, repurchase of distributor's unsold inventory at cost (often required by state statute or commercially negotiated), accounts-receivable allocation, customer-list disposition." }, { "id": "indemnification", "name": "Indemnification", "name_de": "Indemnification", "mandatory": true, "notes": "Mutual: manufacturer indemnifies for product defects and IP infringement claims; distributor indemnifies for its independent marketing claims, employee conduct, and breach of agreement." }, { "id": "limitation_of_liability", "name": "Limitation of Liability", "name_de": "Limitation of Liability", "mandatory": true, "bgb_ref": "UCC § 2-719; R2K § 195", "notes": "Cap (often expressed as percentage of fees paid in trailing 12 months); exclusion of consequential damages; carve-outs for indemnity, IP, payment obligations, gross negligence/wilful misconduct." }, { "id": "governing_law_forum", "name": "Governing Law and Forum", "name_de": "Governing Law and Forum", "mandatory": true, "notes": "Manufacturer's home-state governing law standard. Mandatory state dealer-protection statutes apply notwithstanding choice-of-law clause. AAA/JAMS arbitration often substituted for state-court forum. See /handbook/us/foundation/standard-clauses/." } ], "optional_clauses": [ { "id": "map_policy", "name": "Minimum Advertised Price Policy (Colgate)", "name_de": "Minimum Advertised Price Policy (Colgate)", "bgb_ref": "United States v. Colgate & Co.", "notes": "Unilateral manufacturer policy — NOT a contractual obligation — setting minimum advertised price. Manufacturer reserves right to refuse to deal with non-complying distributors. Must remain unilateral; any negotiation or distributor agreement converts to RPM (Leegin rule-of-reason analysis; per-se illegal under Maryland, California, and other state antitrust statutes)." }, { "id": "marketing_development_fund", "name": "Marketing Development Fund (MDF)", "name_de": "Marketing Development Fund (MDF)", "notes": "Manufacturer commits percentage of distributor purchases to co-op advertising. Pre-approval requirements; receipts/proofs; reimbursement on a schedule." }, { "id": "sales_targets", "name": "Sales Targets and Performance Metrics", "name_de": "Sales Targets and Performance Metrics", "notes": "Annual sales targets, quarterly reviews, performance-improvement plans on shortfall. Failure to meet targets as termination trigger." }, { "id": "non_compete", "name": "Non-Compete (Limited)", "name_de": "Non-Compete (Limited)", "notes": "Distributor prohibited from selling competing products during the term and (often) for 12-24 months post-termination. Subject to state-by-state enforceability — California Cal. B&P § 16600 voids most post-employment non-competes and many post-termination commercial non-competes. FTC non-compete ban (2024 final rule) currently enjoined nationally; status to be monitored." }, { "id": "training_and_support", "name": "Training and Support", "name_de": "Training and Support", "notes": "Manufacturer-provided sales training, product training, certification programs. Often a franchise-risk factor — keep training non-mandatory and below the 16 CFR § 436 required-payment threshold." }, { "id": "returns_and_stock_rotation", "name": "Returns and Stock Rotation", "name_de": "Returns and Stock Rotation", "notes": "Stock-rotation rights (quarterly exchange of slow-moving for current product); defective-product returns under UCC § 2-608; end-of-life buyback programs." }, { "id": "data_and_reporting", "name": "Data and Reporting", "name_de": "Data and Reporting", "notes": "Distributor reports sales, customer information (subject to CCPA/CPRA where applicable), and inventory data on a defined schedule. Manufacturer's right to audit sales-out reports." }, { "id": "insurance", "name": "Insurance", "name_de": "Insurance", "typical": "CGL $1M/$2M; Product Liability $1M-$5M; Auto $1M", "notes": "Distributor maintains CGL, product liability, automobile liability. Manufacturer named additional insured." } ], "court_cases": [ { "case": "Continental T.V., Inc. v. GTE Sylvania, Inc.", "year": 1977, "url": "https://www.law.cornell.edu/supremecourt/text/433/36", "relevance": "Foundational antitrust case for vertical territorial restraints. Overruled US v. Schwinn (1967) and held that non-price vertical restraints (location clauses, territorial restrictions, customer restrictions) are analysed under the rule of reason rather than per se illegality. 433 U.S. 36." }, { "case": "State Oil Co. v. Khan", "year": 1997, "url": "https://www.law.cornell.edu/supremecourt/text/96-871", "relevance": "Vertical maximum price-fixing analysed under rule of reason, overruling Albrecht v. Herald Co. Almost always lawful in practice. 522 U.S. 3." }, { "case": "Leegin Creative Leather Products, Inc. v. PSKS, Inc.", "year": 2007, "url": "https://www.law.cornell.edu/supremecourt/text/06-480", "relevance": "Vertical minimum price-fixing (resale price maintenance) analysed under rule of reason, overruling Dr. Miles (1911). State antitrust law diverges: Maryland, California, New York retain stricter standards. 551 U.S. 877." }, { "case": "Jefferson Parish Hospital District No. 2 v. Hyde", "year": 1984, "url": "https://www.law.cornell.edu/supremecourt/text/466/2", "relevance": "Set the per-se tying test: substantial market power in tying product + non-trivial commerce in tied product + actual conditioning of sale. Foundational tying case. 466 U.S. 2." }, { "case": "Eastman Kodak Co. v. Image Technical Services, Inc.", "year": 1992, "url": "https://www.law.cornell.edu/supremecourt/text/504/451", "relevance": "Extended tying liability to aftermarket parts in photocopier-service market. Market power assessed in aftermarket, not just primary market. 504 U.S. 451." }, { "case": "United States v. Colgate & Co.", "year": 1919, "url": "https://www.law.cornell.edu/supremecourt/text/250/300", "relevance": "Established the Colgate doctrine: manufacturer may unilaterally announce in advance the price at which it will refuse to deal, then refuse to deal. Foundation for modern MAP policies — provided they remain unilateral. 250 U.S. 300." }, { "case": "Eva's Bridal Ltd. v. Halanick Enterprises, Inc.", "year": 2011, "url": "https://law.justia.com/cases/federal/appellate-courts/ca7/10-2863/10-2863-2011-05-10.html", "relevance": "Seventh Circuit (Easterbrook, J.) held trademark licensor who exercised no quality control over goods sold under the mark had abandoned the mark by naked licensing. Drafting consequence: distribution-agreement trademark licenses must include and enforce quality-control standards. 639 F.3d 788." }, { "case": "Texaco Inc. v. Hasbrouck", "year": 1990, "url": "https://www.law.cornell.edu/supremecourt/text/87-2048", "relevance": "Functional-discount defence under Robinson-Patman Act: discount to wholesalers analysed for whether it reasonably reflects services performed. 496 U.S. 543." } ], "further_reading": { "bgb_articles": [ "15 USC § 1 — Sherman Antitrust Act § 1", "15 USC § 13 — Robinson-Patman Act", "15 USC § 1055 — Lanham Act use of mark by related companies", "15 USC § 1127 — Lanham Act definitions (abandonment, use)", "16 CFR § 436 — FTC Franchise Rule", "UCC § 2-201 — Statute of Frauds (sale of goods)", "UCC § 2-305 — Open price term", "UCC § 2-608 — Revocation of acceptance", "Wis. Stat. ch. 135 — Wisconsin Fair Dealership Law", "Conn. Gen. Stat. § 42-133e et seq. — Connecticut Franchise Act", "N.J.S.A. 56:10-1 et seq. — New Jersey Franchise Practices Act", "Md. Code Ann., Com. Law § 11-204 — Maryland Antitrust Act", "Cal. B&P Code § 16600 — California restraint of trade" ], "chaindoc_blog": [ "https://chaindoc.io/blog/contract-management-it", "https://chaindoc.io/blog/legal-strength-blockchain-e-signatures" ] }, "lastVerified": "2026-05-10", "confidence": "high", "validationConflicts": [] }, { "type": "severance-agreement", "name": "Severance Agreement", "name_de": "Severance Agreement", "category": "employment", "schema_version": 1, "form_requirement": { "base": "free", "bgb_ref": "29 USC § 626(f) (OWBPA); IRC § 409A; 29 USC § 1166 (COBRA); 18 USC § 1833(b)(3) (DTSA whistleblower notice)", "alternatives": [ "electronic" ], "notes": "No statutory form requirement, but Older Workers Benefit Protection Act (29 USC § 626(f)) imposes substantive writing requirements for any ADEA waiver from employees aged 40 and over: written in plain English, specific reference to ADEA, advised to consult counsel, 21-day consideration period (45 days for group terminations), and 7-day post-signing revocation period. NLRB McLaren Macomb decision (372 NLRB No. 58, February 2023) limits confidentiality and non-disparagement provisions in severance agreements involving employees covered by Section 7 of the NLRA. ESIGN/UETA permit electronic execution; consult-counsel advisory and revocation mechanics should be unambiguous regardless of medium." }, "required_clauses": [ { "id": "consideration_for_release", "name": "Consideration for Release", "name_de": "Consideration for Release", "mandatory": true, "notes": "Severance pay, benefits continuation, or other consideration above and beyond what the employee is already entitled to receive (accrued wages, accrued PTO if state-required, vested benefits). Required for valid OWBPA waiver (29 USC § 626(f)(1)(D)) and for valid Title VII / ADA waivers generally. Without bona fide additional consideration the release is unenforceable." }, { "id": "general_release_of_claims", "name": "General Release of Claims", "name_de": "General Release of Claims", "mandatory": true, "notes": "Release of all claims arising on or before the signing date, expressly including but not limited to: ADEA, ADA, Title VII, Section 1981, FMLA, FCRA, ERISA (claims for benefits but not vested benefits), state-law statutory and tort claims, wrongful termination, breach of contract. California requires explicit waiver of Cal. Civ. Code § 1542 (release of unknown claims) — must be quoted verbatim and signed acknowledgement." }, { "id": "owbpa_compliance", "name": "OWBPA / ADEA Waiver", "name_de": "OWBPA / ADEA Waiver", "mandatory": true, "bgb_ref": "29 USC § 626(f)", "guidance": "For employees aged 40+: (a) written in plain English; (b) specific reference to ADEA rights; (c) no waiver of post-signing rights; (d) consideration above what already owed; (e) advised in writing to consult attorney; (f) 21-day consideration period (45-day for group terminations); (g) 7-day post-signing revocation period; (h) for group terminations, written disclosure of (i) decisional unit, (ii) eligibility factors, (iii) time limits, and (iv) job titles and ages of selected and not-selected employees (29 USC § 626(f)(1)(H), 29 CFR § 1625.22(f)). Strict OWBPA compliance per Oubre v. Entergy Operations, 522 U.S. 422 (1998)." }, { "id": "excluded_claims", "name": "Excluded Claims", "name_de": "Excluded Claims", "mandatory": true, "notes": "Cannot waive: (a) right to file EEOC charges (Title VII, ADA, ADEA, GINA, EPA) — release of private claims enforceable but charge-filing right preserved; (b) claims arising after signing (29 USC § 626(f)(1)(C)); (c) FLSA wages and overtime (not waivable without DOL or court approval, Brooklyn Savings Bank v. O'Neil, 324 U.S. 697 (1945); Lynn's Food Stores v. United States, 679 F.2d 1350 (11th Cir. 1982)); (d) workers' compensation claims (state law typically prohibits); (e) unemployment insurance claims; (f) Section 7 NLRA rights; (g) right to report to or communicate with government agencies (SEC Rule 21F-17; In re KBR, Inc., Exchange Act Rel. No. 74619 (April 1, 2015))." }, { "id": "consideration_period_and_revocation", "name": "Consideration Period and Revocation", "name_de": "Consideration Period and Revocation", "mandatory": true, "bgb_ref": "29 USC § 626(f)(1)(F)-(G)", "notes": "21 days for individual termination (45 days for group). Acceptance before expiry of period is permitted but must be voluntary. Seven-day post-signing revocation period — agreement is not effective until the eighth day, and payments may not begin before then. Group-termination disclosure (decisional unit, eligibility factors, ages and job titles of selected and not-selected employees) must be provided at the start of the consideration period." }, { "id": "advice_of_counsel", "name": "Advice of Counsel", "name_de": "Advice of Counsel", "mandatory": true, "notes": "Written advice to consult an attorney before signing — required by OWBPA for ADEA waivers. Best practice: conspicuous and in plain English. For non-OWBPA releases, advice-of-counsel language is supporting evidence of knowing and voluntary waiver, the Title VII / ADA standard." }, { "id": "dtsa_whistleblower_notice", "name": "DTSA Whistleblower Immunity Notice", "name_de": "DTSA Whistleblower Immunity Notice", "mandatory": true, "bgb_ref": "18 USC § 1833(b)", "notes": "Required in any contract entered or modified after May 11, 2016 governing trade-secret or confidential-information use by employees, contractors, or consultants — including severance agreements that re-affirm or extend confidentiality obligations. Failure to include forfeits exemplary damages and attorneys' fees under 18 USC § 1836(b)(3)(D)." }, { "id": "section_409a", "name": "Section 409A Compliance", "name_de": "Section 409A Compliance", "mandatory": true, "bgb_ref": "IRC § 409A; Treas. Reg. § 1.409A-1(b)(4); Treas. Reg. § 1.409A-1(b)(9)", "notes": "Severance structured to qualify for exception from § 409A: (a) short-term deferral exception — paid within 2.5 months of year following separation from service; or (b) separation-pay safe harbor — capped at 2x IRS § 401(a)(17) compensation limit and paid within 24 months. Specified-employee six-month payment delay for public-company key employees (§ 409A(a)(2)(B)(i)). Drafting bright lines: avoid effective-date-contingent payment structures that could push payment into a later year at the employee's election." } ], "optional_clauses": [ { "id": "non_disparagement", "name": "Non-Disparagement", "name_de": "Non-Disparagement", "notes": "Mutual or one-way non-disparagement. Limited by NLRB McLaren Macomb (372 NLRB No. 58, February 2023) for employees covered by Section 7 — broad non-disparagement applied to terms and conditions of employment is an unfair labor practice. Speak Out Act (2022) voids pre-dispute non-disparagement covering sexual harassment. California STAND Act (Cal. Code Civ. P. § 1001) voids non-disparagement on workplace harassment / discrimination. Carve-outs for truthful statements to government agencies and in legal proceedings required." }, { "id": "confidentiality_of_agreement", "name": "Confidentiality of Agreement", "name_de": "Confidentiality of Agreement", "notes": "Subject to: Speak Out Act (Pub. L. 117-224, 2022) — prohibits enforcement of pre-dispute non-disclosure for sexual harassment / assault; California STAND Act (Cal. Code Civ. P. § 1001) — no NDA on sex harassment, discrimination, or retaliation; NY Gen. Oblig. Law § 5-336 — restrictions; NJ N.J.S.A. 10:5-12.8; 18 USC § 1833(b)(3) DTSA whistleblower notice. Carve-outs for spouse, attorney, tax advisor, government agencies, and court orders." }, { "id": "return_of_property", "name": "Return of Property", "name_de": "Return of Property", "notes": "Return of all Company property (devices, documents, credentials, badges) before payment of severance. Certification of deletion of Company information from personal devices." }, { "id": "cooperation", "name": "Cooperation in Litigation", "name_de": "Cooperation in Litigation", "notes": "Continuing obligation to cooperate in litigation, investigations, and regulatory matters relating to employee's tenure. Reasonable out-of-pocket expense reimbursement; no compensation for time (which would create witness-payment concerns)." }, { "id": "restrictive_covenant_reaffirmation", "name": "Restrictive Covenant Reaffirmation", "name_de": "Restrictive Covenant Reaffirmation", "notes": "Re-affirmation of confidentiality, IP assignment, and (where enforceable) non-solicitation and non-compete from underlying employment agreement. Severance pay can serve as additional consideration to support enforceability where state law requires." }, { "id": "cobra_subsidy", "name": "COBRA Subsidy", "name_de": "COBRA Subsidy", "bgb_ref": "29 USC § 1166 (COBRA notice)", "notes": "Continuation of employer's share of group health insurance premiums for a stated period (typical 3-12 months) through COBRA. Employer-paid COBRA subsidy is taxable wages to the employee; structuring as additional severance pay grossed up for tax simplifies administration. COBRA election notice required within 14 days from plan administrator or 44 days from employer (29 CFR § 2590.606)." }, { "id": "outplacement", "name": "Outplacement Services", "name_de": "Outplacement Services", "bgb_ref": "IRC § 132(d)", "notes": "Outplacement and career-counseling services are non-taxable working-condition fringe under IRC § 132(d). Distinct from cash severance, which is taxable wages." }, { "id": "stock_option_extension", "name": "Stock Option Exercise Extension", "name_de": "Stock Option Exercise Extension", "bgb_ref": "IRC § 422", "notes": "Extension of post-termination exercise window beyond standard 90 days (typical 6-12 months). Only for non-qualified stock options (NSOs) — extension beyond 90 days disqualifies incentive stock options (ISOs) from § 422 favorable tax treatment. Acceleration of vesting on involuntary termination common for senior executives." }, { "id": "no_admission", "name": "No Admission of Liability", "name_de": "No Admission of Liability", "notes": "Recital that severance and release do not constitute an admission of liability or wrongdoing by either party. Standard." }, { "id": "tax_treatment", "name": "Tax Treatment", "name_de": "Tax Treatment", "notes": "Severance is wages — Form W-2 reporting, FICA (Social Security and Medicare) withholding apply. Federal supplemental wage withholding rate (22% in 2025; 37% for amounts over $1M). Allocation of severance between general release (taxable) and physical-injury settlement (excludable under IRC § 104(a)(2)) requires careful drafting and substantiation." } ], "forbidden_in_agb": [ { "clause_id": "harassment_nda", "name_de": "Pre-Dispute NDA Covering Sexual Harassment", "bgb_ref": "Speak Out Act (Pub. L. 117-224, 2022)", "consequence": "Speak Out Act voids pre-dispute non-disclosure and non-disparagement agreements covering sexual-harassment and sexual-assault disputes. Post-dispute settlement NDAs remain enforceable (the Act applies only to pre-dispute agreements). California STAND Act (Cal. Code Civ. P. § 1001) extends to discrimination and retaliation." }, { "clause_id": "wage_waiver", "name_de": "Waiver of Earned but Unpaid Wages", "bgb_ref": "29 USC § 206 (FLSA); Lynn's Food Stores v. United States, 679 F.2d 1350 (11th Cir. 1982)", "consequence": "FLSA-claimed wages cannot be released without DOL or court approval. State wage-payment statutes (Cal. Lab. Code § 206.5; NY Lab. Law § 198) similarly bar release of accrued unpaid wages by private settlement." }, { "clause_id": "future_rights_waiver", "name_de": "Waiver of Rights Arising After Signing", "bgb_ref": "29 USC § 626(f)(1)(C)", "consequence": "OWBPA expressly prohibits waiver of ADEA rights arising after the date of signing. Provisions purporting to waive future claims are unenforceable as to the ADEA waiver and may invalidate the entire release." }, { "clause_id": "sec_reporting_bar", "name_de": "Prohibition on Reporting to SEC", "bgb_ref": "17 CFR § 240.21F-17; 15 USC § 78u-6", "consequence": "SEC Rule 21F-17 prohibits any provision that impedes communication with the SEC about possible securities violations. SEC enforcement under In re KBR (2015) — $130K civil penalty for confidentiality clause requiring approval before contacting SEC. Subsequent enforcement against Activision Blizzard ($35M, 2023), Anheuser-Busch InBev ($6M, 2016), BlackRock ($340K, 2016), JPMorgan ($18M, 2024), Tuttle Capital ($150K, 2023)." }, { "clause_id": "nlra_section_7_bar", "name_de": "Bar on Concerted Activity / Section 7 Rights", "bgb_ref": "29 USC § 157; McLaren Macomb, 372 NLRB No. 58 (2023)", "consequence": "Severance provisions that broadly restrict an employee's ability to discuss terms and conditions of employment with co-workers or to engage in concerted activity violate Section 7 of the NLRA and constitute an unfair labor practice. McLaren Macomb overruled the more permissive Trump-era Baylor University Medical Center (369 NLRB No. 43, 2020) and IGT/International Game Technology (370 NLRB No. 50, 2020) standards." } ], "court_cases": [ { "case": "Oubre v. Entergy Operations, Inc.", "year": 1998, "url": "https://www.law.cornell.edu/supremecourt/text/96-1291", "relevance": "Supreme Court held that OWBPA requirements are strict — an ADEA release that fails to comply with any OWBPA requirement is unenforceable, and the employee need not return the consideration to challenge it. Sets the strict-compliance bar for severance drafting. 522 U.S. 422." }, { "case": "Brooklyn Savings Bank v. O'Neil", "year": 1945, "url": "https://www.law.cornell.edu/supremecourt/text/324/697", "relevance": "FLSA wages cannot be waived prospectively by private agreement — public-policy bar on waiver of statutory minimum-wage and overtime rights. 324 U.S. 697." }, { "case": "Lynn's Food Stores, Inc. v. United States", "year": 1982, "url": "https://law.justia.com/cases/federal/appellate-courts/F2/679/1350/355093/", "relevance": "Eleventh Circuit established that FLSA settlements require either DOL supervision or court approval as a 'fair and reasonable resolution of a bona fide dispute.' Drafting consequence: separate FLSA wage claims from general severance release if any wage dispute exists. 679 F.2d 1350." }, { "case": "McLaren Macomb (NLRB)", "year": 2023, "url": "https://www.nlrb.gov/case/07-CA-263041", "relevance": "NLRB held that severance agreements with broad confidentiality and non-disparagement provisions violate Section 7 of the NLRA when offered to employees covered by the Act. The mere offer of such an agreement is itself an unfair labor practice. 372 NLRB No. 58. Distinguishes between supervisors (not Section 7-covered) and employees." }, { "case": "In re KBR, Inc.", "year": 2015, "url": "https://www.sec.gov/litigation/admin/2015/34-74619.pdf", "relevance": "SEC enforcement action under Rule 21F-17 — confidentiality language requiring employees to obtain Company approval before contacting SEC about possible securities violations resulted in $130,000 civil penalty. Foundational SEC whistleblower-rule enforcement. Exchange Act Rel. No. 74619." } ], "further_reading": { "bgb_articles": [ "29 USC § 626(f) — Older Workers Benefit Protection Act (OWBPA)", "29 CFR § 1625.22 — OWBPA regulations", "29 USC § 1166 — COBRA notice requirements", "29 USC § 157 — NLRA Section 7", "18 USC § 1833(b) — DTSA whistleblower notice", "18 USC § 1836 — DTSA federal civil cause of action", "IRC § 409A — Deferred compensation; severance", "IRC § 132(d) — Working-condition fringe (outplacement)", "IRC § 280G — Golden parachute payments", "IRC § 422 — Incentive stock options", "IRC § 104(a)(2) — Physical-injury settlement exclusion", "17 CFR § 240.21F-17 — SEC Rule 21F-17", "15 USC § 78u-6 — Dodd-Frank securities whistleblower", "Speak Out Act (Pub. L. 117-224, 2022)", "Cal. Code Civ. P. § 1001 — STAND Act", "Cal. Civ. Code § 1542 — Release of unknown claims", "NY Gen. Oblig. Law § 5-336 — Settlement confidentiality restrictions", "Treas. Reg. § 1.409A-1(b)(4) — Short-term deferral exception", "Treas. Reg. § 1.409A-1(b)(9) — Separation pay safe harbor" ], "chaindoc_blog": [ "https://chaindoc.io/blog/legal-strength-blockchain-e-signatures" ] }, "lastVerified": "2026-05-10", "confidence": "high", "validationConflicts": [] }, { "type": "software-license", "name": "Software License Agreement / EULA", "name_de": "Software License Agreement / EULA", "category": "b2b-commercial", "schema_version": 1, "form_requirement": { "base": "electronic", "bgb_ref": "17 USC § 204(a) (exclusive licenses require writing); 17 USC § 101 et seq.", "alternatives": [ "free" ], "notes": "Non-exclusive software licenses are enforceable without a writing under federal copyright law. Exclusive licenses require a writing signed by the copyright owner per 17 USC § 204(a). Clickwrap acceptance is enforceable in nearly every jurisdiction (ProCD v. Zeidenberg; Hill v. Gateway). Browsewrap is generally unenforceable without conspicuous notice and constructive assent (Specht v. Netscape; Nguyen v. Barnes & Noble). Electronic execution per ESIGN/UETA universally valid." }, "required_clauses": [ { "id": "parties_and_recitals", "name": "Parties and Recitals", "name_de": "Parties and Recitals", "mandatory": true, "notes": "Legal entity names, state of incorporation, principal place of business. Identifies Licensor and Licensee." }, { "id": "definitions", "name": "Definitions", "name_de": "Definitions", "mandatory": true, "notes": "Software, Documentation, Updates, Authorised Users, Authorised Installations, Confidential Information, Open-Source Components, etc." }, { "id": "license_grant", "name": "License Grant", "name_de": "License Grant", "mandatory": true, "bgb_ref": "17 USC § 106; 17 USC § 201", "guidance": "Specify each dimension: scope (copy/use/modify/sublicense), exclusivity, term (perpetual vs. term), transferability, sublicensability, geography, fields of use, volume (users/installations/sites/CPUs). Default rule: all rights not expressly granted are reserved." }, { "id": "license_vs_sale_recital", "name": "License-Not-Sale Recital", "name_de": "License-Not-Sale Recital", "mandatory": true, "bgb_ref": "17 USC § 109; Vernor v. Autodesk", "notes": "Explicit recital that the transaction is a license, not a sale. Required to satisfy first prong of the Vernor v. Autodesk three-factor test. Without this and the transfer-restriction + use-restriction prongs, the first-sale doctrine in 17 USC § 109 may apply, enabling downstream resale." }, { "id": "restrictions", "name": "Use Restrictions", "name_de": "Use Restrictions", "mandatory": true, "bgb_ref": "17 USC § 1201; 17 USC § 1201(f) (interoperability)", "notes": "No reverse engineering / decompilation / disassembly (subject to § 1201(f) interoperability carve-out and state-by-state variation); no modification; no removal of proprietary notices; no exceeding authorised volume; no transfer to embargoed jurisdictions; no use to develop competing products. Reverse-engineering restrictions are enforceable in some circuits (Bowers v. Baystate) and preempted in others (Vault v. Quaid)." }, { "id": "ip_ownership", "name": "Intellectual Property Ownership", "name_de": "Intellectual Property Ownership", "mandatory": true, "notes": "Reservation of all rights not expressly granted. No transfer of title. Copyright + patent + trade-secret + trademark layers separately preserved." }, { "id": "open_source_compliance", "name": "Open-Source Components", "name_de": "Open-Source Components", "mandatory": true, "notes": "Representation that the Software does not incorporate any open-source component that imposes obligations inconsistent with the license grant. SBOM maintenance recommended. GPL/AGPL incompatibility with closed-source distribution; LGPL/MPL weak copyleft; MIT/BSD/Apache 2.0 permissive." }, { "id": "fees_and_payment", "name": "Fees and Payment", "name_de": "Fees and Payment", "mandatory": true, "notes": "License fee (one-time, subscription, or usage-based). Payment terms. Late-fee formula. Tax responsibilities. Audit-true-up payment mechanics." }, { "id": "warranties_and_disclaimers", "name": "Warranties and Disclaimers", "name_de": "Warranties and Disclaimers", "mandatory": true, "bgb_ref": "UCC § 2-316; UCC § 2-312; UCC § 2-314; UCC § 2-315", "notes": "Express warranties (conformance to specifications, no malicious code, authority to license, non-infringement). Conspicuous disclaimer of implied warranties of merchantability, fitness for purpose, title, and non-infringement per UCC § 2-316. All-caps treatment standard for conspicuousness under UCC § 1-201(b)(10)." }, { "id": "limitation_of_liability", "name": "Limitation of Liability", "name_de": "Limitation of Liability", "mandatory": true, "bgb_ref": "UCC § 2-719; R2K § 195", "notes": "Cap on aggregate liability (typically 1×/2×/3× trailing 12-month fees). Exclusion of consequential, incidental, indirect, special, punitive damages. Carve-outs for IP indemnity, confidentiality, gross negligence/wilful misconduct, fraud, payment obligations, personal injury. UCC § 2-719(2) failure-of-essential-purpose risk." }, { "id": "ip_indemnity", "name": "IP Infringement Indemnification", "name_de": "IP Infringement Indemnification", "mandatory": true, "notes": "Licensor indemnifies Licensee against third-party patent/copyright/trademark/trade-secret claims arising from Licensee's authorised use. Carve-outs: Licensee modifications, combinations with non-Licensor materials but-for the infringement, use outside license scope, compliance with Licensee specifications. Sole-remedy treatment: modify / procure license / refund." }, { "id": "termination", "name": "Termination and Survival", "name_de": "Termination and Survival", "mandatory": true, "notes": "Termination for material breach (30-day cure); termination for insolvency; automatic termination of license on breach of license restrictions. Effect of termination: cease use, destroy/return copies, certify destruction, pay accrued fees. 11 USC § 365(n) post-bankruptcy retention. Survival of confidentiality, IP, indemnity, limitation of liability, payment." }, { "id": "governing_law", "name": "Governing Law and Forum", "name_de": "Governing Law and Forum", "mandatory": true, "notes": "See /handbook/us/foundation/standard-clauses/ for full architecture. CISG exclusion if cross-border. AAA/JAMS arbitration with injunctive-relief carve-out common." } ], "optional_clauses": [ { "id": "drm_acknowledgement", "name": "DRM / Technological Protection Measures Acknowledgement", "name_de": "DRM / Technological Protection Measures Acknowledgement", "bgb_ref": "17 USC § 1201", "notes": "Licensee acknowledges Software incorporates TPMs and shall not circumvent. Independent statutory cause of action under 17 USC § 1201 layered on contractual restriction." }, { "id": "audit_rights", "name": "Compliance Audit Rights", "name_de": "Compliance Audit Rights", "typical": "Once per 12 months, 30 days' notice, business hours, Licensor expense unless material non-compliance", "notes": "Reasonable notice; business hours; confidentiality on auditor. Material non-compliance (typically >5% by value) triggers true-up plus audit-cost shift to Licensee." }, { "id": "updates_and_maintenance", "name": "Updates, Patches, and Maintenance", "name_de": "Updates, Patches, and Maintenance", "notes": "Whether updates included with subscription, available at additional cost, or unobligated for perpetual licenses. EOL / sunset / security-patch-only support periods for critical-infrastructure customers." }, { "id": "click_through_assent", "name": "Click-Through Assent Mechanism", "name_de": "Click-Through Assent Mechanism", "notes": "For mass-distributed Software: clickwrap with conspicuous display of terms and unambiguous 'I Agree' button. Browsewrap (footer link without affirmative assent) is generally unenforceable per Specht v. Netscape and Nguyen v. Barnes & Noble." }, { "id": "export_compliance", "name": "Export Compliance", "name_de": "Export Compliance", "notes": "ITAR / EAR compliance. Restrictions on transfer to embargoed jurisdictions (OFAC list) and sanctioned end-users. Mandatory for dual-use technology." }, { "id": "source_code_escrow", "name": "Source Code Escrow", "name_de": "Source Code Escrow", "notes": "For mission-critical enterprise software: escrow with release triggers (Licensor bankruptcy, abandonment, failure to maintain). Third-party escrow agent (Iron Mountain, EscrowTech)." }, { "id": "data_protection", "name": "Data Protection / Privacy", "name_de": "Data Protection / Privacy", "notes": "Where Software processes personal data: data-processing addendum (DPA), CCPA/CPRA, GDPR (cross-border), HIPAA (PHI), GLBA (financial)." } ], "court_cases": [ { "case": "Vernor v. Autodesk, Inc.", "year": 2010, "url": "https://law.justia.com/cases/federal/appellate-courts/ca9/09-15422/09-15422-2011-04-01.html", "relevance": "Ninth Circuit three-factor test for whether a software user is licensee or owner: (1) the agreement specifies a license; (2) significantly restricts transfer; (3) imposes notable use restrictions. Held first-sale doctrine in 17 USC § 109 inapplicable to software licensees. 621 F.3d 1102." }, { "case": "ProCD, Inc. v. Zeidenberg", "year": 1996, "url": "https://law.justia.com/cases/federal/appellate-courts/F3/86/1447/559922/", "relevance": "Seventh Circuit (Easterbrook, J.) held shrinkwrap license enforceable: contract formed when licensee, having had opportunity to read terms, retained the product. Foundational case for mass-market software license enforceability. 86 F.3d 1447." }, { "case": "Hill v. Gateway 2000, Inc.", "year": 1997, "url": "https://law.justia.com/cases/federal/appellate-courts/F3/105/1147/606111/", "relevance": "Seventh Circuit extended ProCD to telephone-order 'money-now-terms-later' computer sales: terms inside the box (including arbitration clause) enforceable because consumer had right to reject by returning. 105 F.3d 1147." }, { "case": "Specht v. Netscape Communications Corp.", "year": 2002, "url": "https://law.justia.com/cases/federal/appellate-courts/F3/306/17/576345/", "relevance": "Second Circuit (Sotomayor, J.) held browsewrap with download-button-above-terms-link unenforceable: licensee not bound where assent was not manifested. Foundational case against browsewrap. 306 F.3d 17." }, { "case": "Nguyen v. Barnes & Noble, Inc.", "year": 2014, "url": "https://law.justia.com/cases/federal/appellate-courts/ca9/12-56628/12-56628-2014-08-18.html", "relevance": "Ninth Circuit held browsewrap enforceable only with actual or constructive notice: mere footer link insufficient; requires conspicuous notice plus reasonable opportunity to review. 763 F.3d 1171." }, { "case": "Bowers v. Baystate Technologies, Inc.", "year": 2003, "url": "https://law.justia.com/cases/federal/appellate-courts/F3/320/1317/562942/", "relevance": "Federal Circuit enforced contractual prohibition on reverse engineering notwithstanding 17 USC § 1201(f) interoperability carve-out — contractual restriction not preempted by federal copyright law. Contrast with Vault v. Quaid (5th Cir. 1988). 320 F.3d 1317." } ], "further_reading": { "bgb_articles": [ "17 USC § 101 — Copyright Act Definitions", "17 USC § 106 — Exclusive Rights in Copyrighted Works", "17 USC § 109 — First Sale Doctrine", "17 USC § 201 — Ownership of Copyright", "17 USC § 204 — Execution of Transfers of Copyright Ownership", "17 USC § 1201 — DMCA Anti-Circumvention", "11 USC § 365(n) — Treatment of Executory IP Contracts in Bankruptcy", "UCC § 2-312 — Warranty of Title and Against Infringement", "UCC § 2-314 — Implied Warranty of Merchantability", "UCC § 2-315 — Implied Warranty of Fitness for Particular Purpose", "UCC § 2-316 — Exclusion or Modification of Warranties", "UCC § 2-719 — Contractual Modification or Limitation of Remedy" ], "chaindoc_blog": [ "https://chaindoc.io/blog/contract-management-it", "https://chaindoc.io/blog/legal-strength-blockchain-e-signatures" ] }, "lastVerified": "2026-05-10", "confidence": "high", "validationConflicts": [] }, { "type": "sow", "name": "Statement of Work", "name_de": "Statement of Work", "category": "b2b-commercial", "schema_version": 1, "form_requirement": { "base": "free", "bgb_ref": "R2K § 110; UCC § 2-201 N/A (subordinate to MSA, services-centric)", "alternatives": [ "electronic" ], "notes": "SOW form follows governing MSA. Where MSA is signed electronically per ESIGN/UETA, SOWs are routinely executed by countersigned PDF, DocuSign envelope, or Customer portal click-through with appropriate consent language. No Statute of Frauds applies to most professional-services SOWs." }, "required_clauses": [ { "id": "recitals_msa_reference", "name": "Recitals and MSA Reference", "name_de": "Recitals and MSA Reference", "mandatory": true, "guidance": "Identify SOW number, Customer, Provider, Effective Date, and the controlling MSA by date. State: 'All capitalized terms not defined herein have the meanings in the Master Agreement.' Best practice: specify 'Master Agreement as in effect on the Effective Date of this SOW' to prevent retroactive MSA amendments from changing SOW terms." }, { "id": "scope_of_services", "name": "Scope of Services", "name_de": "Scope of Services", "mandatory": true, "notes": "Detailed description of work, often organized by phase or workstream. Specific enough to permit later acceptance review." }, { "id": "deliverables", "name": "Deliverables", "name_de": "Deliverables", "mandatory": true, "notes": "Enumerated list of tangible outputs (code, designs, reports, configurations, training). Each Deliverable with description and acceptance criteria." }, { "id": "schedule_and_milestones", "name": "Schedule and Milestones", "name_de": "Schedule and Milestones", "mandatory": true, "notes": "Start date, completion date, intermediate milestones with associated dates." }, { "id": "fees_and_payment_schedule", "name": "Fees and Payment Schedule", "name_de": "Fees and Payment Schedule", "mandatory": true, "notes": "Amount, fee model (fixed price / T&M / capped T&M / milestone-based), invoicing schedule, payment terms typically referenced to MSA." }, { "id": "acceptance", "name": "Acceptance Criteria and Procedures", "name_de": "Acceptance Criteria and Procedures", "mandatory": true, "guidance": "Standard procedure: Provider delivery + notice of completion → Customer review period (15-30 days for standard, 45-60 for complex) → written rejection with particularity → Provider cure period (15-30 days) → second-look review. Deemed acceptance if no written rejection. Repeated-rejection remedy: fee reduction, termination with refund, or rework at no charge." }, { "id": "order_of_precedence_reference", "name": "Order of Precedence", "name_de": "Order of Precedence", "mandatory": true, "notes": "Recital that MSA controls in case of conflict unless this SOW expressly references the conflicting provision and states intent to override. 'For purposes of this SOW only' qualifier prevents global MSA amendment." } ], "optional_clauses": [ { "id": "change_control", "name": "Change Orders / Change Control", "name_de": "Change Orders / Change Control", "bgb_ref": "UCC § 2-209; NY GOL § 15-301", "guidance": "Strict written-only or hybrid (written for material changes). UCC § 2-209(4) waiver escape hatch limits NOM-clause force; NY GOL § 15-301 reinforces NOM. Address standstill on existing work, time impact, fee impact, and authorization." }, { "id": "personnel", "name": "Key Personnel and Substitution", "name_de": "Key Personnel and Substitution", "notes": "Named individuals identified; Customer consent for substitution (not unreasonably withheld) or required-equivalent-qualifications standard. Attrition exceptions for departures or medical unavailability." }, { "id": "travel_expenses", "name": "Travel and Expense Reimbursement", "name_de": "Travel and Expense Reimbursement", "typical": "Pre-approval threshold $500-$1000; receipts required; no markup on direct expenses", "notes": "Pre-approval thresholds, documentation standards (receipts vs. per-diem GSA rates), markup rules, reimbursement timing." }, { "id": "pass_through_warranties", "name": "Pass-Through Third-Party Warranties", "name_de": "Pass-Through Third-Party Warranties", "notes": "Where Deliverables incorporate third-party products: Provider's sole obligation is commercially-reasonable pass-through of vendor warranties; no independent Provider warranty on third-party components." }, { "id": "ip_allocation_sow_specific", "name": "SOW-Specific IP Allocation", "name_de": "SOW-Specific IP Allocation", "bgb_ref": "17 USC §§ 101, 201", "notes": "Override of MSA default IP allocation for joint-development, Provider-owned Deliverables (with Customer license), or Customer-furnished materials. Must explicitly reference and override the MSA's IP provision." }, { "id": "service_levels_sow_specific", "name": "SOW-Specific Service Levels", "name_de": "SOW-Specific Service Levels", "notes": "Where MSA SLA is generic, SOW may incorporate engagement-specific SLA (uptime, response times, escalation matrix)." }, { "id": "assumptions_and_dependencies", "name": "Assumptions and Dependencies", "name_de": "Assumptions and Dependencies", "notes": "Provider's stated assumptions about Customer-provided inputs, third-party dependencies, environmental conditions. Failure of assumptions triggers fee/schedule adjustment via change order." } ], "court_cases": [ { "case": "Wagner Spray Tech Corp. v. Wolf", "year": 2001, "url": "", "relevance": "Federal court (Minnesota) held that incorporation-by-reference of an MSA into a subsequent SOW is effective where the SOW makes clear and unmistakable reference to the MSA. Authority for the SOW + MSA two-tier structure. 489 N.W.2d 270." }, { "case": "Wagner v. Graziano Construction Co.", "year": 1956, "url": "", "relevance": "Classic Pennsylvania Supreme Court case on no-oral-modification clauses: NOM clauses can themselves be modified or waived by the parties' subsequent conduct. Illustrates the UCC § 2-209(4) waiver doctrine in services context. 390 Pa. 445." } ], "further_reading": { "bgb_articles": [ "17 USC § 101 — Work made for hire", "17 USC § 201 — Ownership of Copyright", "UCC § 2-209 — Modification, Rescission, Waiver (NOM clauses)", "UCC § 2-606 — Acceptance of Goods", "Restatement (Second) of Contracts § 234 — Order of Performance", "Restatement (Second) of Contracts § 237 — Material Breach", "New York General Obligations Law § 15-301 — NOM enforceability", "15 USC §§ 7001-7031 — ESIGN Act" ], "chaindoc_blog": [ "https://chaindoc.io/blog/contract-management-it", "https://chaindoc.io/blog/legal-strength-blockchain-e-signatures" ] }, "lastVerified": "2026-05-10", "confidence": "high", "validationConflicts": [] }, { "type": "standard-clauses", "name": "US Standard Boilerplate Clauses", "name_de": "US Standard Boilerplate Clauses", "category": "foundation", "schema_version": 1, "form_requirement": { "base": "free", "bgb_ref": "various — see host contract", "notes": "Cross-handbook reference for US-style boilerplate. Form requirement depends on the host contract — Statute of Frauds applies independently of the boilerplate." }, "required_clauses": [], "optional_clauses": [ { "id": "entire_agreement", "name": "Entire Agreement / Integration / Merger", "name_de": "Entire Agreement / Integration / Merger", "bgb_ref": "R2K §§ 209-218; UCC § 2-202", "notes": "Triggers parol evidence rule. Standard form: 'This Agreement constitutes the entire agreement between the parties and supersedes all prior negotiations, representations, or agreements relating to the subject matter hereof, whether written or oral.'" }, { "id": "severability", "name": "Severability", "name_de": "Severability", "bgb_ref": "Restatement (Second) of Contracts § 184", "notes": "Preserves remainder of contract if a single term is invalid. Most state courts will sever an invalid provision and enforce the rest where the parties so agree and where the invalid provision is not essential to the bargain." }, { "id": "waiver", "name": "No Waiver", "name_de": "No Waiver", "bgb_ref": "UCC § 2-209(4); R2K § 84", "notes": "Prevents a party's failure to enforce a right from becoming a waiver of future enforcement. Note UCC § 2-209(4) holds that an attempt at modification or rescission that fails as such may operate as a waiver." }, { "id": "assignment", "name": "Anti-Assignment", "name_de": "Anti-Assignment", "bgb_ref": "R2K §§ 317-323; UCC § 2-210", "notes": "Default rule is contracts are freely assignable absent contrary intent. Anti-assignment clauses are enforced but distinguished: prohibiting assignment of contractual rights vs. duties has different consequences. Typical M&A carve-out exception included." }, { "id": "notices", "name": "Notices", "name_de": "Notices", "bgb_ref": "varies by state long-arm and CPLR equivalents", "notes": "Specifies addresses, methods (certified mail, overnight courier, email), and when notice is deemed effective. Increasingly includes electronic-notice clauses validated by ESIGN/UETA." }, { "id": "force_majeure", "name": "Force Majeure", "name_de": "Force Majeure", "bgb_ref": "no federal statute; common-law impossibility / impracticability per R2K §§ 261-272; UCC § 2-615", "notes": "Post-COVID drafting expressly enumerates pandemics, epidemics, government-imposed shutdowns, quarantines, and supply-chain disruptions in addition to traditional acts of God. Without an enumerated clause, common-law impracticability under R2K § 261 and UCC § 2-615 apply." }, { "id": "governing_law", "name": "Governing Law", "name_de": "Governing Law", "bgb_ref": "Restatement (Second) Conflict of Laws § 187", "notes": "Party choice generally honored if (1) chosen state has substantial relationship to parties or transaction or there is other reasonable basis, and (2) chosen law does not violate fundamental public policy of state with materially greater interest. Some states (e.g., California Civil Code § 1646.5; New York General Obligations Law § 5-1401) statutorily uphold party choice for contracts of $250,000 or more even without substantial-relationship test." }, { "id": "forum_selection", "name": "Forum Selection / Venue", "name_de": "Forum Selection / Venue", "bgb_ref": "Atlantic Marine Constr. Co. v. U.S. Dist. Court, 571 U.S. 49 (2013); M/S Bremen v. Zapata Off-Shore Co., 407 U.S. 1 (1972)", "notes": "Distinguish exclusive vs. permissive venue. Atlantic Marine compels enforcement in federal court absent extraordinary circumstances; state courts apply Bremen reasonableness factors. Plead 'exclusive' venue language if intended." }, { "id": "arbitration", "name": "Arbitration / FAA", "name_de": "Arbitration / FAA", "bgb_ref": "9 USC § 2 (Federal Arbitration Act)", "notes": "FAA preempts state law hostile to arbitration. AT&T Mobility v. Concepcion, 563 U.S. 333 (2011) confirmed class-action waiver enforceability. Epic Systems v. Lewis, 138 S. Ct. 1612 (2018) extended preemption to employment context. Lamps Plus v. Varela, 587 U.S. 176 (2019) requires explicit consent for class arbitration." }, { "id": "class_action_waiver", "name": "Class Action Waiver", "name_de": "Class Action Waiver", "bgb_ref": "9 USC § 2 + AT&T Mobility; NLRA § 7 (29 USC § 157)", "notes": "Enforceable in consumer arbitration per AT&T Mobility (2011) and Epic Systems (2018). Pre-Epic NLRB had held employment class-action waivers violated NLRA § 7 'concerted activity' protections; Epic Systems rejected that theory." }, { "id": "jury_trial_waiver", "name": "Jury Trial Waiver", "name_de": "Jury Trial Waiver", "bgb_ref": "7th Amendment; varies by state", "notes": "Pre-dispute jury trial waivers enforceable in most federal courts and many states (e.g., New York CPLR § 4101) if knowing and voluntary. California prohibits pre-dispute jury waivers in court (Grafton Partners v. Superior Court, 36 Cal. 4th 944 (2005)); Georgia and some others have similar limits." }, { "id": "attorneys_fees", "name": "Attorneys' Fees", "name_de": "Attorneys' Fees", "bgb_ref": "American Rule; Hardt v. Reliance Standard Life Ins. Co., 560 U.S. 242 (2010)", "notes": "Default American rule: each party bears its own attorneys' fees. Contractual fee-shifting enforceable. State-law reciprocity statutes (e.g., California Civil Code § 1717, Florida Statutes § 57.105) automatically make unilateral fee clauses bilateral." }, { "id": "indemnification", "name": "Indemnification", "name_de": "Indemnification", "bgb_ref": "varies by state; anti-indemnity statutes in construction context (e.g., NY Gen. Obligations Law § 5-322.1)", "notes": "Distinguish duty to defend (procedural — defense costs as incurred) from duty to indemnify (substantive — pay judgments/settlements). Specify whether defense costs advanced or reimbursed; specify whether indemnitor controls choice of counsel." }, { "id": "limitation_of_liability", "name": "Limitation of Liability", "name_de": "Limitation of Liability", "bgb_ref": "UCC § 2-719; R2K § 195", "notes": "Caps on direct damages plus exclusion of consequential damages. Standard carve-outs: gross negligence/willful misconduct, IP infringement indemnity, breach of confidentiality, indemnification obligations, breach of payment obligations. Unconscionability and 'fails of essential purpose' (UCC § 2-719(2)) are the principal challenges." }, { "id": "confidentiality", "name": "Confidentiality / Survival", "name_de": "Confidentiality / Survival", "bgb_ref": "Defend Trade Secrets Act, 18 USC § 1836 (federal); state UTSA", "notes": "Bound by Defend Trade Secrets Act whistleblower-immunity notice requirement (18 USC § 1833(b)) for contracts entered after May 11, 2016. Survival clauses commonly extend confidentiality, indemnification, limitation of liability, and dispute resolution past termination." }, { "id": "counterparts", "name": "Counterparts and Electronic Signatures", "name_de": "Counterparts and Electronic Signatures", "bgb_ref": "15 USC §§ 7001-7031 (ESIGN); UETA § 7", "notes": "Counterparts clause permits separate signing. Electronic-signature recital (e.g., 'parties intend that signatures delivered electronically or in counterparts have the same effect as original wet signatures') confirms ESIGN/UETA applicability." }, { "id": "headings", "name": "Headings", "name_de": "Headings", "bgb_ref": "common-law canon of construction", "notes": "'Headings are for convenience only and shall not affect interpretation.' Prevents courts from using descriptive section labels to narrow or expand operative provisions." }, { "id": "construction", "name": "Construction / Anti-Contra-Proferentem", "name_de": "Construction / Anti-Contra-Proferentem", "bgb_ref": "R2K § 206", "notes": "Negates the contra proferentem canon: 'This Agreement shall not be construed against the drafting party.' Of mixed enforceability — courts apply contra proferentem most strongly in consumer and adhesion contexts regardless of clause." }, { "id": "amendment_nom", "name": "Amendment / No Oral Modification", "name_de": "Amendment / No Oral Modification", "bgb_ref": "UCC § 2-209(2); R2K § 283", "notes": "UCC § 2-209(2) expressly upholds NOM clauses for sale-of-goods contracts; § 2-209(4) backstops with waiver concept. At common law, course of performance can override NOM clauses in many states. Best practice: require written + signed amendment." }, { "id": "time_of_essence", "name": "Time of the Essence", "name_de": "Time of the Essence", "bgb_ref": "R2K § 242", "notes": "Elevates deadlines to material conditions; any delay is then a material breach. Without this clause, late performance is usually only a minor breach giving rise to damages, not termination rights." }, { "id": "cumulative_remedies", "name": "Cumulative Remedies", "name_de": "Cumulative Remedies", "bgb_ref": "UCC § 2-719(1)(b); R2K § 378", "notes": "Preserves all remedies (legal, equitable, contractual) as cumulative rather than alternative. Without this clause, election of one remedy may bar later resort to others." } ], "forbidden_in_agb": [], "court_cases": [ { "case": "Atlantic Marine Constr. Co. v. U.S. Dist. Court", "year": 2013, "url": "https://www.law.cornell.edu/supremecourt/text/12-929", "relevance": "Forum-selection clauses presumptively enforceable in federal court; transfer denied absent extraordinary public-interest considerations. 571 U.S. 49." }, { "case": "AT&T Mobility LLC v. Concepcion", "year": 2011, "url": "https://www.law.cornell.edu/supremecourt/text/09-893", "relevance": "FAA § 2 preempts state-law rules conditioning arbitration on availability of class proceedings; class-action waivers enforceable. 563 U.S. 333." }, { "case": "Epic Systems Corp. v. Lewis", "year": 2018, "url": "https://www.law.cornell.edu/supremecourt/text/16-285", "relevance": "Employment arbitration agreements requiring individualized proceedings are enforceable under FAA; NLRA § 7 does not override FAA. 138 S. Ct. 1612." }, { "case": "Lamps Plus, Inc. v. Varela", "year": 2019, "url": "https://www.law.cornell.edu/supremecourt/text/17-988", "relevance": "An ambiguous arbitration agreement cannot be the basis for compelled class arbitration; explicit contractual consent required. 587 U.S. 176." }, { "case": "M/S Bremen v. Zapata Off-Shore Co.", "year": 1972, "url": "https://www.law.cornell.edu/supremecourt/text/407/1", "relevance": "Forum-selection clauses enforceable unless unreasonable under the circumstances; foundational federal rule. 407 U.S. 1." } ], "further_reading": { "bgb_articles": [ "Restatement (Second) of Contracts § 184 — Severability", "Restatement (Second) of Contracts § 195 — Limitation of Liability for Misrepresentation", "Restatement (Second) of Contracts § 206 — Contra Proferentem", "Restatement (Second) of Contracts § 209 — Integrated Agreements", "Restatement (Second) of Contracts § 261 — Discharge by Supervening Impracticability", "Restatement (Second) Conflict of Laws § 187 — Law of State Chosen by Parties", "UCC § 2-209 — Modification, Rescission, Waiver", "UCC § 2-210 — Delegation of Performance; Assignment of Rights", "UCC § 2-615 — Excuse by Failure of Presupposed Conditions", "UCC § 2-719 — Limitation of Remedies", "9 USC § 2 — Federal Arbitration Act", "15 USC §§ 7001-7031 — ESIGN Act", "18 USC § 1836 — Defend Trade Secrets Act", "29 USC § 157 — NLRA Section 7", "California Civil Code § 1646.5 — Choice of Law Statute", "New York General Obligations Law § 5-1401 — Choice of Law Statute" ], "chaindoc_blog": [ "https://chaindoc.io/blog/legal-strength-blockchain-e-signatures", "https://chaindoc.io/blog/contract-management-it" ] }, "lastVerified": "2026-05-10", "confidence": "high", "validationConflicts": [] }, { "type": "stock-option-agreement", "name": "Stock Option / RSU Agreement", "name_de": "Stock Option / RSU Agreement", "category": "b2b-commercial", "schema_version": 1, "form_requirement": { "base": "free", "bgb_ref": "IRC § 422(b)(1) (ISO must be granted under a written plan); 17 CFR § 230.701 (Rule 701 written compensatory plan)", "alternatives": [ "electronic" ], "notes": "ISOs require a written stock plan approved by stockholders within 12 months of board adoption per IRC § 422(b)(1). Rule 701 exemption requires a written compensatory plan. Individual option/RSU agreements are routinely electronically executed (DocuSign, Carta, etc.) under ESIGN/UETA — universally valid. The plan itself is also nearly always written; oral grants would create § 409A and Rule 701 compliance problems." }, "required_clauses": [ { "id": "grant_terms", "name": "Grant Terms", "name_de": "Grant Terms", "mandatory": true, "notes": "Number of shares/units, instrument type (ISO / NSO / RSU), exercise price (for options — at-FMV per latest 409A valuation), grant date, vesting commencement date, expiration date (max 10 years for ISO; 5 years for 10% shareholders)." }, { "id": "plan_incorporation", "name": "Plan Incorporation", "name_de": "Plan Incorporation", "mandatory": true, "bgb_ref": "IRC § 422(b)(1); 17 CFR § 230.701(c)", "notes": "Express incorporation of umbrella Stock Plan / Equity Incentive Plan. Plan governs in case of conflict. Both ISO § 422 and Rule 701 require written plan as the issuance vehicle." }, { "id": "vesting", "name": "Vesting Schedule", "name_de": "Vesting Schedule", "mandatory": true, "typical": "4-year, 1-year cliff (25% at year 1), 36 monthly thereafter", "notes": "Time-based, performance-based, or hybrid. For RSUs in private companies: double-trigger (time + liquidity event). ISO $100K vesting cap per IRC § 422(d) — aggregate FMV-at-grant of ISOs first vesting in any calendar year limited to $100K per holder; excess treated as NSO." }, { "id": "acceleration", "name": "Acceleration on M&A", "name_de": "Acceleration on M&A", "mandatory": true, "notes": "Single-trigger (M&A alone) vs. double-trigger (M&A + termination without cause / good-reason resignation within typically 12 months post-closing). Double-trigger more common for venture-backed companies. Hybrid (e.g., 50% single / 50% double) also seen. Plan typically reserves board discretion to assume / substitute / cash out / terminate." }, { "id": "exercise_mechanics", "name": "Exercise Mechanics (Options)", "name_de": "Exercise Mechanics (Options)", "mandatory": true, "notes": "Cash exercise, cashless / broker-assisted, net exercise (stock-for-stock or share withholding), promissory note (rare, regulatory-disfavoured). Cashless exercise unavailable for ISOs without disqualifying disposition. Section 16 insiders subject to short-swing profit rules under Section 16(b)." }, { "id": "tax_treatment", "name": "Tax Treatment", "name_de": "Tax Treatment", "mandatory": true, "bgb_ref": "IRC § 83; IRC § 422; IRC § 409A; IRC § 56(b)(3)", "guidance": "ISO: no regular tax at grant or exercise; AMT preference at exercise per § 56(b)(3); long-term cap gain if 2-year-from-grant + 1-year-from-exercise holding periods met. NSO: ordinary income on spread at exercise; capital gain on subsequent appreciation. RSU: ordinary income on FMV at settlement; FICA/Medicare at vesting. § 409A safe harbor with independent appraisal valuation (≤12 months old) for private companies." }, { "id": "section_83b_election", "name": "Section 83(b) Election (Early-Exercise / Restricted Stock)", "name_de": "Section 83(b) Election (Early-Exercise / Restricted Stock)", "mandatory": true, "bgb_ref": "IRC § 83(b); Treas. Reg. § 1.83-2", "notes": "Available for restricted stock or early-exercised options where resulting stock is unvested/subject to repurchase. NOT available for unvested stock options or RSUs. 30-day strict filing deadline from transfer date. Election: include FMV-at-transfer (minus purchase price) in ordinary income immediately; future appreciation is capital gain. No equitable tolling for late filings." }, { "id": "termination_of_service", "name": "Termination of Service", "name_de": "Termination of Service", "mandatory": true, "bgb_ref": "IRC § 422(a)(2)", "notes": "Vested options: typical 90-day NSO post-termination exercise period. ISO statutory: 3 months for ISO status — longer exercise converts to NSO treatment (1 year for disability; through stated term for death). Some plans extend NSO post-termination to address leaver-lockout in private companies (longer-than-3-month period converts ISO to NSO). Unvested: forfeited (subject to any acceleration). Termination for cause: typically extinguishes vested + unvested. Retirement: plan-specific." }, { "id": "transferability", "name": "Transferability", "name_de": "Transferability", "mandatory": true, "bgb_ref": "IRC § 422(b)(5)", "notes": "ISO statutory requirement: non-transferable except by will or inheritance, and exercisable during lifetime only by optionee. NSO and RSU typically follow same restriction by plan. Some plans permit limited transfers to family members or trusts (a) only after pre-approval, (b) NSO-only, (c) without consideration. Domestic Relations Order treatment also addressed." }, { "id": "rule_701_compliance", "name": "Rule 701 / Securities Law Compliance", "name_de": "Rule 701 / Securities Law Compliance", "mandatory": true, "bgb_ref": "17 CFR § 230.701; 17 CFR § 230.144", "notes": "Private-company grants exempt under Rule 701 (compensatory plan + aggregate $1M/15% asset/15% stock cap; enhanced disclosure above $10M annual). Resale subject to Rule 144 (6-month hold for reporting issuers, 12-month for non-reporting; affiliate volume/manner-of-sale). Restrictive legend on share certificates. State blue-sky compliance (Rule 701 covered for federal preemption purposes; state-by-state notice filings may still apply)." }, { "id": "tax_withholding", "name": "Tax Withholding", "name_de": "Tax Withholding", "mandatory": true, "notes": "NSO exercise: employer withholds federal/state income tax + FICA + Medicare on spread. RSU vesting: FICA/Medicare due at vesting; income tax due at settlement. Sell-to-cover authorisation for public-company RSUs (broker-assisted sale at vesting to fund withholding). Section 162(m) deductibility analysis for performance-vesting executives (now significantly reduced post-TCJA)." }, { "id": "lock_up", "name": "IPO Lock-Up", "name_de": "IPO Lock-Up", "mandatory": true, "notes": "Pre-commitment to underwriter lock-up at IPO (typically 180 days). Applies to optionee/grantee for any shares issued under the grant. FINRA Rule 5131 separate 25-day cooling-off for IPO allocations to restricted persons (employees of broker-dealers, etc.)." }, { "id": "form_reporting", "name": "IRS Form 3921 / Form 4 Reporting", "name_de": "IRS Form 3921 / Form 4 Reporting", "mandatory": true, "bgb_ref": "26 CFR § 1.6039-1; 17 CFR § 240.16a-3", "notes": "Form 3921: issuer-furnished ISO exercise statement (due by January 31 of year following exercise). Form 3922: ESPP qualifying first-transfer. Section 16 (officers/directors/10% holders of public-company stock): Form 4 within 2 business days of grant, exercise, vesting, or other reportable transaction." }, { "id": "governing_law", "name": "Governing Law and Dispute Resolution", "name_de": "Governing Law and Dispute Resolution", "mandatory": true, "notes": "Typically Delaware law (matching corporation's state of incorporation). Plan-level dispute resolution governs; option agreement defers to plan. Arbitration of compensation disputes commonly required (subject to Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021 carve-out)." } ], "optional_clauses": [ { "id": "early_exercise", "name": "Early-Exercise Right (Options)", "name_de": "Early-Exercise Right (Options)", "bgb_ref": "IRC § 83(b)", "notes": "Plan permits exercise of unvested options; resulting stock subject to repurchase at cost on termination. Combined with timely § 83(b) election: zero/minimal ordinary income at exercise (if FMV ≈ exercise price), all future appreciation is capital gain. Risk: exercise cost paid up-front for stock that may not vest. Invitation-only structure at most companies." }, { "id": "double_trigger_rsu", "name": "Double-Trigger RSU Structure", "name_de": "Double-Trigger RSU Structure", "bgb_ref": "IRC § 409A", "notes": "Private-company RSUs: vest on (a) time-based service condition AND (b) liquidity event (M&A or IPO). Avoids tax-without-liquidity trap. Maximum permissible deferral period typically 7-10 years from grant. § 409A compliance: settlement must occur on a permissible payment event (separation from service, death, disability, change in control, fixed schedule)." }, { "id": "rofr_repurchase", "name": "ROFR / Repurchase Right (Private Companies)", "name_de": "ROFR / Repurchase Right (Private Companies)", "notes": "Company ROFR on optionee/grantee sale of exercised shares. Repurchase right at FMV (vested) or cost (unvested) on termination. Terminates on QPO. Joinder to Stockholder Agreement may be required." }, { "id": "performance_vesting", "name": "Performance-Based Vesting", "name_de": "Performance-Based Vesting", "notes": "Vests on achievement of specified milestones (revenue, market share, product launch, M&A valuation). Often executive-only. Plan must specify performance period, measurement methodology, board determination authority. § 409A compliance issues if performance + time hybrid." }, { "id": "clawback", "name": "Clawback", "name_de": "Clawback", "bgb_ref": "Sarbanes-Oxley § 304; Dodd-Frank § 954; SEC Rule 10D-1", "notes": "Mandatory clawback for executives in event of accounting restatement under SOX § 304 and Dodd-Frank § 954 / SEC Rule 10D-1 (effective 2023 listing standards). Discretionary clawback for misconduct, breach of restrictive covenants, etc. State-by-state enforcement variability." }, { "id": "esop_recital", "name": "ERISA / ESPP Recital", "name_de": "ERISA / ESPP Recital", "bgb_ref": "IRC § 423 (ESPP); ERISA exclusion for stock plans", "notes": "Stock option / RSU plans typically exempt from ERISA Title I. ESPPs under IRC § 423 have separate qualifying requirements (employee-only, $25K annual purchase limit, 5-year holding period for qualified disposition)." } ], "court_cases": [ { "case": "Commissioner v. LoBue", "year": 1956, "url": "https://www.law.cornell.edu/supremecourt/text/351/243", "relevance": "US Supreme Court foundational holding that stock options granted to employees are compensation taxable as ordinary income when the bargain element is realised at exercise — foundational for NSO § 83 treatment. 351 U.S. 243." }, { "case": "Cramer v. Commissioner", "year": 1995, "url": "https://law.justia.com/cases/federal/appellate-courts/F3/64/1406/541787/", "relevance": "Ninth Circuit on stock-option valuation issues — readily ascertainable fair market value standard for § 83 purposes; informed the Treas. Reg. § 1.83-7 safe-harbour rules. 64 F.3d 1406." }, { "case": "Sutardja v. United States", "year": 2013, "url": "https://law.justia.com/cases/federal/district-courts/california/candce/3:2011cv00724/238143/", "relevance": "Federal Court of Claims decision interpreting IRC § 409A; held discounted stock options (below-FMV at grant) subject to § 409A's 20% additional tax. Confirmed serious consequences of 409A non-compliance for private-company option grants. 109 Fed. Cl. 358." } ], "further_reading": { "bgb_articles": [ "26 USC § 83 — Property transferred in connection with services", "26 USC § 83(b) — Election to include FMV at transfer", "26 USC § 162(m) — $1M executive compensation deduction limit", "26 USC § 421 — General rules for statutory options", "26 USC § 422 — Incentive stock options (ISO)", "26 USC § 423 — Employee stock purchase plans (ESPP)", "26 USC § 56(b)(3) — AMT adjustment for ISO exercise", "26 USC § 409A — Nonqualified deferred compensation", "Treas. Reg. § 1.83-1 et seq. — § 83 regulations", "Treas. Reg. § 1.83-7 — Taxation of NSOs", "Treas. Reg. § 1.422-1 et seq. — ISO regulations", "Treas. Reg. § 1.409A-1 et seq. — § 409A regulations", "17 CFR § 230.701 — Rule 701 compensatory plan exemption", "17 CFR § 230.144 — Rule 144 resale safe harbour", "17 CFR § 240.16a-3 — Section 16 reporting (Form 4)", "17 CFR § 240.10D-1 — Clawback (Dodd-Frank § 954)", "26 CFR § 1.6039-1 — Form 3921 (ISO) and Form 3922 (ESPP) reporting", "FINRA Rule 5131 — New issue allocations / lock-up" ], "chaindoc_blog": [ "https://chaindoc.io/blog/contract-management-it", "https://chaindoc.io/blog/legal-strength-blockchain-e-signatures" ] }, "lastVerified": "2026-05-10", "confidence": "high", "validationConflicts": [] }, { "type": "stockholder-agreement", "name": "Stockholder Agreement", "name_de": "Stockholder Agreement", "category": "b2b-commercial", "schema_version": 1, "form_requirement": { "base": "free", "bgb_ref": "8 Del. C. § 218(c) — written form required for specific enforceability", "alternatives": [ "electronic" ], "notes": "8 Del. C. § 218(c) requires voting agreements to be 'in writing and signed by the parties' to qualify for specific enforceability. Electronic execution per ESIGN/UETA universally valid for Stockholder Agreements. As a contract among parties (not a corporate-charter document), no public filing is required, in contrast with the Certificate of Incorporation." }, "required_clauses": [ { "id": "definitions", "name": "Definitions", "name_de": "Definitions", "mandatory": true, "notes": "Common Stock, Preferred Stock (each Series), Major Investor, Qualified Public Offering (QPO), Permitted Transferee, Sale of the Company, Drag-Along Approval, Tag-Along Notice, etc." }, { "id": "voting_agreements", "name": "Voting Agreements", "name_de": "Voting Agreements", "mandatory": true, "bgb_ref": "8 Del. C. § 218(c)", "guidance": "Specifically enforceable under § 218(c). Covers board election commitments, charter-amendment commitments, drag-along voting commitments. Each commitment must be express and the supporting board composition formula clear." }, { "id": "board_composition", "name": "Board Composition", "name_de": "Board Composition", "mandatory": true, "notes": "Formula specifying directors elected by each preferred series, common-elected directors (typically including CEO ex officio), and independent directors. Typically further entrenched by charter giving each series the separate-class right to elect its designated directors. Schnell v. Chris-Craft (285 A.2d 437 (Del. 1971)) applies to inequitable bylaw use." }, { "id": "drag_along", "name": "Drag-Along Right", "name_de": "Drag-Along Right", "mandatory": true, "notes": "Specified majority (typically preferred + board) can force minority to vote for and tender into approved sale. Standard conditions: all-cash/marketable-securities consideration, pro-rata allocation, no more-than-pro-rata indemnification, no post-closing non-competes, customary ownership/authority reps only. Mehta v. Smurfit-Stone scrutinises appraisal-waiver and release-of-claims components." }, { "id": "tag_along", "name": "Tag-Along (Co-Sale) Right", "name_de": "Tag-Along (Co-Sale) Right", "mandatory": true, "notes": "Minority right to sell pro-rata portion in majority's sale on same terms. Notice, election period, allocation among electing holders, treatment of partial elections. Standard form-book mechanics." }, { "id": "rofr_rofo", "name": "Right of First Refusal / First Offer", "name_de": "Right of First Refusal / First Offer", "mandatory": true, "guidance": "ROFR: seller presents third-party offer, company/holders can match. ROFO: seller offers first to company/holders at stated price; if rejected, may sell to third party on no-better-than-rejected terms. Permitted-transferee carve-outs (family, trusts, affiliates, gift, death)." }, { "id": "preemptive_rights", "name": "Pre-Emptive Rights", "name_de": "Pre-Emptive Rights", "mandatory": true, "notes": "Right to participate pro-rata in primary issuances. Standard exemptions: employee/director/consultant equity plans, acquisition consideration, convertible securities conversion, qualified public offerings, debt financings. Procedural: notice + election period + allocation." }, { "id": "protective_provisions", "name": "Protective Provisions", "name_de": "Protective Provisions", "mandatory": true, "notes": "Negative consent rights of preferred class/series — typical list: charter/bylaw amendment, authorisation of senior or pari-passu securities, change-of-control, dissolution/bankruptcy, material change in business, board size change, junior dividends/distributions, junior repurchases (other than employee at cost), debt above threshold, related-party transactions." }, { "id": "information_rights", "name": "Information Rights", "name_de": "Information Rights", "mandatory": true, "bgb_ref": "8 Del. C. § 220", "notes": "Contractually expand statutory § 220 baseline. Major-Investor threshold (e.g., 500K shares). Annual audited financials within 90-120 days; quarterly unaudited within 45 days; monthly management reports within 30 days; annual budget pre-FY; capitalisation-table updates; material-event notices." }, { "id": "transfer_restrictions", "name": "Transfer Restrictions", "name_de": "Transfer Restrictions", "mandatory": true, "notes": "Consent-required transfer regime with permitted-transferee carve-outs. Joinder requirement for all permitted transferees. Common Permitted Transferees: spouse, parents, siblings, lineal descendants, qualifying trusts, affiliates of entity holders, gifts, transfers on death, repurchases by the corporation." }, { "id": "founder_vesting", "name": "Founder Vesting and Repurchase Rights", "name_de": "Founder Vesting and Repurchase Rights", "mandatory": true, "typical": "4-year vesting, 1-year cliff, 36 monthly thereafter; double-trigger M&A acceleration", "notes": "Restricted Stock Purchase Agreement (separate or cross-referenced) implements the structure. Repurchase right at cost (often nominal) for unvested shares. Acceleration: single-trigger (M&A alone) vs. double-trigger (M&A + termination without cause within 12 months) — double-trigger is investor-favourable and more common. See stock-option-agreement record for non-founder employee equity." }, { "id": "ipo_termination", "name": "QPO Termination and Preferred Conversion", "name_de": "QPO Termination and Preferred Conversion", "mandatory": true, "notes": "Automatic termination on Qualified Public Offering (QPO) — minimum size and pricing thresholds. Coordinated with charter automatic-conversion of preferred to common on QPO. Eliminates protective provisions, information rights, founder restrictions." }, { "id": "lock_up", "name": "IPO Lock-Up Commitment", "name_de": "IPO Lock-Up Commitment", "mandatory": true, "notes": "Pre-commitment to underwriter lock-up (typically 180 days post-IPO; no sale/hedge/pledge). Ensures corporation can deliver underwriter-required lock-up coverage. FINRA Rule 5131 imposes separate 25-day cooling-off period for IPO allocations to restricted persons." }, { "id": "governing_law_dispute", "name": "Governing Law and Dispute Resolution", "name_de": "Governing Law and Dispute Resolution", "mandatory": true, "notes": "Delaware governing law standard for DGCL-governed corporations. Chancery jurisdiction retention typical (especially for fiduciary-duty disputes). AAA/JAMS arbitration option for commercial disputes; injunctive-relief carve-out for transfer-restriction enforcement." } ], "optional_clauses": [ { "id": "registration_rights", "name": "Registration Rights", "name_de": "Registration Rights", "notes": "Often in separate Investors' Rights Agreement. Demand registration rights (number of demands, S-3 short-form availability), piggyback registration rights, S-3 shelf registration, expenses, indemnification of selling holders. Standard form-book material." }, { "id": "section_122_18_override", "name": "Section 122(18) Charter-Enabled Provisions", "name_de": "Section 122(18) Charter-Enabled Provisions", "bgb_ref": "8 Del. C. § 122(18)", "notes": "Where the charter authorises pursuant to § 122(18) (post-2024 amendments), stockholder agreement may bind board discretion on specified matters. Legislative response to West Palm Beach Firefighters v. Moelis (Del. Ch. 2024). Limits continue to develop; Schnell-style inequitable purpose still applies." }, { "id": "key_man_provisions", "name": "Key-Person / Founder Departure Provisions", "name_de": "Key-Person / Founder Departure Provisions", "notes": "Reserved board seat for founder/CEO; loss-of-seat triggers on cause/no-cause termination; tied to vesting and repurchase rights." }, { "id": "noncompete_nonsolicit", "name": "Founder Non-Compete and Non-Solicit", "name_de": "Founder Non-Compete and Non-Solicit", "typical": "1-2 years post-departure", "bgb_ref": "Cal. B&P § 16600 (California)", "notes": "California voids non-competes per § 16600; sale-of-business exception in § 16601 may apply on founder buy-out. Non-solicit (employees, customers) generally more enforceable than non-compete." }, { "id": "ipo_demand_rights", "name": "IPO Demand Rights", "name_de": "IPO Demand Rights", "notes": "Specified preferred majority can demand the corporation file an IPO registration statement. Conditions: minimum aggregate offering size, anti-flip protections, underwriter selection." }, { "id": "schedule_13d_acknowledgement", "name": "Section 13(d) Group Acknowledgement", "name_de": "Section 13(d) Group Acknowledgement", "bgb_ref": "17 CFR § 240.13d-1", "notes": "For agreements covering material stakes in a public (or post-IPO) corporation: acknowledgement that signatories may form a Section 13(d) group; allocation of disclosure-cost responsibility; coordinated filing procedures." } ], "court_cases": [ { "case": "Schnell v. Chris-Craft Industries, Inc.", "year": 1971, "url": "https://courts.delaware.gov/Opinions/Download.aspx?id=14706", "relevance": "Delaware Supreme Court foundational holding that procedurally-valid bylaw amendments can be enjoined where adopted 'for inequitable purposes.' Source-of-power for striking down director-entrenchment manoeuvres notwithstanding formal DGCL compliance. 285 A.2d 437." }, { "case": "Mehta v. Smurfit-Stone Container Corp.", "year": 2014, "url": "https://law.justia.com/cases/delaware/court-of-chancery/2014/civil-action-9433-vcn.html", "relevance": "Delaware Court of Chancery on the enforceability of drag-along provisions; scrutiny of appraisal-rights waiver and release-of-claims components, particularly where dragger is controller and dragged are minority. 2014 WL 5438534." }, { "case": "Edwards v. Arthur Andersen LLP", "year": 2008, "url": "https://law.justia.com/cases/california/supreme-court/4th/44/937.html", "relevance": "California Supreme Court reaffirmed strict reading of Cal. B&P § 16600 voiding nearly all non-competes — relevant to founder non-compete provisions in Stockholder Agreements for California-domiciled founders. 44 Cal. 4th 937." } ], "further_reading": { "bgb_articles": [ "8 Del. C. § 109 — Bylaws", "8 Del. C. § 122 — Specific corporate powers (incl. § 122(18) charter-stockholder-agreement override)", "8 Del. C. § 141 — Board of directors; powers", "8 Del. C. § 145 — Indemnification of officers, directors, employees, and agents", "8 Del. C. § 218 — Voting trusts and voting agreements", "8 Del. C. § 220 — Inspection of books and records", "8 Del. C. § 251 — Merger or consolidation of domestic corporations", "17 CFR § 240.13d-1 — Schedule 13D filing requirements", "FINRA Rule 5131 — New Issue Allocations (lock-up)", "Cal. B&P § 16600 — Non-compete prohibition (California)" ], "chaindoc_blog": [ "https://chaindoc.io/blog/contract-management-it", "https://chaindoc.io/blog/legal-strength-blockchain-e-signatures" ] }, "lastVerified": "2026-05-10", "confidence": "high", "validationConflicts": [] }, { "type": "terms-of-service", "name": "Terms of Service", "name_de": "Terms of Service", "category": "b2c-consumer", "schema_version": 1, "form_requirement": { "base": "electronic", "bgb_ref": "Specht v. Netscape, 306 F.3d 17 (2d Cir. 2002); Meyer v. Uber, 868 F.3d 66 (2d Cir. 2017); 15 USC §§ 7001-7031 (ESIGN)", "alternatives": [], "notes": "Online-only contract; enforceability turns on the clickwrap-vs-browsewrap doctrine. The presentation pattern with consistent enforcement: (1) sign-up flow with affirmative action (Sign Up button); (2) contemporaneous statement immediately adjacent to that button ('By clicking Sign Up you agree to our Terms of Service and Privacy Policy'); (3) visually-distinguished hyperlinks to the linked terms; (4) terms reachable by a single click in scrollable, copyable form. Per-user assent logging (user ID, IP, timestamp, ToS version hash) required to defend enforcement in litigation. Modification clauses must couple unilateral amendment with notice and an opportunity to cancel (Douglas v. Talk America, 9th Cir. 2007). ESIGN consent to receive transactional and contractual communications electronically is the standard pairing." }, "required_clauses": [ { "id": "acceptance_and_parties", "name": "Acceptance and Contract Formation", "name_de": "Acceptance and Contract Formation", "mandatory": true, "notes": "Conspicuous acceptance recital ('By accessing or using the Service, or by clicking I Agree or any similar affirmative action, you agree to be bound by these Terms') + identification of the contracting parties (the user, who must be of age and capacity; and the service provider, by full legal name and address) + eligibility (age 13 for COPPA-non-directed services; 18 for adult categories; consent of parent or guardian for minors where applicable)." }, { "id": "account_terms", "name": "Account Terms", "name_de": "Account Terms", "mandatory": true, "notes": "Account-creation requirements (accurate registration information, single account per person, security of credentials), account-suspension and termination grounds, user's obligation to maintain accuracy of account information." }, { "id": "license_to_use_service", "name": "Licence to Use the Service", "name_de": "Licence to Use the Service", "mandatory": true, "notes": "Non-exclusive, revocable, non-transferable, limited licence to access and use the Service for personal, non-commercial use (or commercial use where applicable), subject to compliance with the Terms. All other rights reserved." }, { "id": "acceptable_use_policy", "name": "Acceptable Use Policy", "name_de": "Acceptable Use Policy", "mandatory": true, "guidance": "Prohibited conduct: illegal activity; IP infringement; harassment, hate speech, threats; spam; circumvention of security or rate limits; scraping or automated access except through documented API; reverse engineering except where permitted by law; impersonation; sexually-explicit content (where service is not adult-oriented); promotion of violence or self-harm. The AUP is the substantive basis for content moderation and account termination; draft with the granularity needed to defend specific enforcement actions." }, { "id": "user_generated_content_license", "name": "User-Generated Content Licence", "name_de": "User-Generated Content Licence", "mandatory": true, "notes": "Where the Service hosts user content: non-exclusive, royalty-free, perpetual, irrevocable (for the duration of the user's posting), worldwide, sublicensable, transferable licence to use, reproduce, modify, adapt, publish, translate, distribute, perform, and display user content for the purposes of operating, promoting, and improving the Service. Moral-rights waiver to the extent permitted by applicable law. Distinguish public-facing content (broader licence) from private content (narrower licence tied to service operation). User retention of ownership is the consumer-friendly framing." }, { "id": "dmca_notice_and_takedown", "name": "DMCA Notice and Takedown", "name_de": "DMCA Notice and Takedown", "mandatory": true, "bgb_ref": "17 USC § 512; 37 CFR § 201.38", "notes": "§ 512(c)-compliant statement: identification of the designated agent (full name, postal address, telephone, email — must match the Copyright Office registration), procedure for submitting a DMCA notice (six § 512(c)(3)(A) elements), procedure for submitting a counter-notification (six § 512(g)(3) elements), repeat-infringer termination policy. Designation of DMCA agent with the Copyright Office is a statutory prerequisite for the safe harbor; a ToS-only designation does not suffice. Filing fee $6 per agent (37 CFR § 201.38)." }, { "id": "intellectual_property_and_feedback", "name": "Intellectual Property and Feedback Licence", "name_de": "Intellectual Property and Feedback Licence", "mandatory": true, "notes": "Service provider's IP — software, content, trademarks, logos, design elements — remains the service provider's property. Any feedback, suggestions, or ideas submitted by the user are licensed to the service provider on a non-exclusive, royalty-free, perpetual, irrevocable basis for any purpose (the feedback licence prevents later equitable-ownership claims for features inspired by user feedback)." }, { "id": "disclaimers_of_warranty", "name": "Disclaimers of Warranty", "name_de": "Disclaimers of Warranty", "mandatory": true, "bgb_ref": "UCC § 2-316; 15 USC § 2308 (Magnuson-Moss)", "notes": "Conspicuous 'AS IS' and 'AS AVAILABLE' disclaimer of all warranties express or implied, including UCC implied warranties of merchantability, fitness for a particular purpose, and non-infringement, where permitted by law. UCC § 2-316(2) requires conspicuousness (typically all-caps or bold). Magnuson-Moss (15 USC § 2308) prohibits disclaimer of implied warranties on consumer products where a written or service-contract warranty is offered. CA, MA, CT, VT, WA prohibit complete disclaimer of certain implied warranties on consumer transactions; carve out 'such warranties as cannot be disclaimed under applicable law'." }, { "id": "limitation_of_liability", "name": "Limitation of Liability", "name_de": "Limitation of Liability", "mandatory": true, "bgb_ref": "Cal. Civ. Code § 1668", "notes": "Two parts: (1) exclusion of indirect, consequential, incidental, special, punitive, and exemplary damages, and lost profits, regardless of theory; (2) cap on aggregate direct damages — typically the greater of amounts paid by the user in the preceding 12 months or a fixed dollar amount ($100 common for free services). Carve-outs for IP infringement indemnification (user-side), gross negligence, wilful misconduct, fraud, and any liability that cannot be limited under applicable law. Cal. Civ. Code § 1668 voids exemption from own fraud or wilful injury." }, { "id": "indemnification_by_user", "name": "Indemnification by User", "name_de": "Indemnification by User", "mandatory": true, "notes": "User indemnifies and holds harmless the service provider for claims arising from the user's misuse of the Service, violation of the Terms, infringement of third-party rights, or user content. Reciprocal indemnification by the service provider is industry-norm in B2B SaaS ToS but uncommon in consumer ToS." }, { "id": "arbitration_and_class_waiver", "name": "Mandatory Arbitration and Class-Action Waiver", "name_de": "Mandatory Arbitration and Class-Action Waiver", "mandatory": true, "bgb_ref": "9 USC § 2 (FAA); 9 USC §§ 401-402 (EFAA); AT&T Mobility v. Concepcion, 563 U.S. 333 (2011)", "notes": "Pre-dispute arbitration clause covering 'any dispute, claim, or controversy arising out of or relating to these Terms, the Service, or the relationship between the parties' + institutional administrator (AAA Consumer Arbitration Rules or JAMS Streamlined) + class-action waiver + delegation clause assigning arbitrability disputes to the arbitrator. Mass-arbitration protections (Heckman v. Live Nation, 9th Cir. 2024) must preserve a fair individual-arbitration alternative. Opt-out window — typically 30 days after acceptance — blunts unconscionability arguments. Carve-outs: small-claims-court actions, IP infringement injunctive relief, and EFAA sexual-assault and sexual-harassment claims." }, { "id": "governing_law_and_forum", "name": "Governing Law and Forum", "name_de": "Governing Law and Forum", "mandatory": true, "notes": "Choice of law (Delaware, California, New York are most common) and forum (state and federal courts of the chosen state, exclusive jurisdiction) for any claim not subject to arbitration. Choice-of-law is generally enforceable for contract claims; for state consumer-protection claims, several states have anti-derogation rules (Cal. Civ. Code § 1751 voids CLRA-rights waivers; NJ Truth-in-Consumer Contract Act similar)." }, { "id": "termination", "name": "Termination", "name_de": "Termination", "mandatory": true, "notes": "Service provider's right to suspend or terminate the user's account, with or without cause, with or without notice (material-cause notice often given for paid accounts). Effects: survival of certain provisions (IP, indemnification, limitation of liability, arbitration, governing law, user content licence to the extent of pre-termination posting). User's right to terminate by closing the account." }, { "id": "modifications", "name": "Modifications to the Terms", "name_de": "Modifications to the Terms", "mandatory": true, "bgb_ref": "Douglas v. U.S. District Court (Talk America), 495 F.3d 1062 (9th Cir. 2007)", "notes": "Notice of material changes by email or in-product banner + meaningful opportunity to review and terminate before changes take effect + continued use after the effective date as manifestation of assent. Unilateral modification without notice and opportunity-to-cancel is unenforceable under Douglas v. Talk America." }, { "id": "electronic_communications_consent", "name": "Electronic Communications Consent (ESIGN / CAN-SPAM)", "name_de": "Electronic Communications Consent (ESIGN / CAN-SPAM)", "mandatory": true, "bgb_ref": "15 USC §§ 7001-7031 (ESIGN); 15 USC § 7701 (CAN-SPAM)", "notes": "Consent under ESIGN to receive transactional and contractual communications electronically, with the right to receive paper copies on request. CAN-SPAM-compliant opt-out mechanism for marketing emails (the user cannot opt out of transactional emails — order confirmations, security alerts — while remaining a user)." }, { "id": "boilerplate", "name": "Severability, Entire Agreement, No Waiver, Assignment", "name_de": "Severability, Entire Agreement, No Waiver, Assignment", "mandatory": true, "notes": "Standard boilerplate — severability, entire agreement, no waiver, no assignment by user, assignment by provider. See /handbook/us/foundation/standard-clauses/ for the architecture." } ], "optional_clauses": [ { "id": "tcpa_sms_consent", "name": "TCPA SMS Consent", "name_de": "TCPA SMS Consent", "bgb_ref": "47 USC § 227", "notes": "Where the service uses SMS for marketing: express written consent under 47 USC § 227(b), 'Msg & data rates may apply', reasonable opt-out instruction ('Reply STOP to unsubscribe'), clear disclosure that consent is not a condition of purchase. ToS-acceptance language is generally insufficient — separate checkbox or affirmative opt-in is required. Statutory damages $500-$1,500 per text." }, { "id": "auto_renewal_disclosure", "name": "Auto-Renewal Disclosure", "name_de": "Auto-Renewal Disclosure", "bgb_ref": "15 USC § 8401 (ROSCA); 16 CFR Part 425; Cal. Bus. & Prof. Code § 17600", "notes": "Where the service is a paid subscription with automatic renewal, ROSCA / FTC Click-to-Cancel and state ARL disclosures must be reproduced in the ToS and in the checkout flow. See /handbook/us/consumer/refund-policy/." }, { "id": "third_party_services_and_links", "name": "Third-Party Services and Links", "name_de": "Third-Party Services and Links", "notes": "No endorsement, no responsibility — links to third-party websites or services are provided for convenience and do not constitute endorsement or assumption of responsibility for third-party content, services, or practices." }, { "id": "export_controls", "name": "Export Controls and Sanctions Compliance", "name_de": "Export Controls and Sanctions Compliance", "bgb_ref": "EAR 15 CFR §§ 730-774; OFAC 31 CFR Part 500", "notes": "User represents that user is not on any US sanctions list, not located in any embargoed country (Cuba, Iran, North Korea, Syria, Crimea/Donetsk/Luhansk regions), and will not use the service for export-controlled or sanctioned purposes." }, { "id": "force_majeure", "name": "Force Majeure", "name_de": "Force Majeure", "notes": "Provider not liable for failure or delay in performance caused by events beyond reasonable control (natural disasters, war, terrorism, governmental action, internet or telecommunications failures, pandemics)." } ], "forbidden_in_agb": [ { "clause_id": "pre_dispute_sexual_harassment_arbitration", "name_de": "Pre-Dispute Arbitration of Sexual Harassment / Assault", "bgb_ref": "9 USC §§ 401-402 (EFAA, 2022)", "consequence": "EFAA gives the consumer or employee a unilateral right to void pre-dispute arbitration agreements as to sexual-assault and sexual-harassment claims. Class-action waivers in the same dispute are also voidable at the consumer's election." }, { "clause_id": "fosta_sesta_carve_out", "name_de": "FOSTA-SESTA-Violating Content Liability Shield", "bgb_ref": "47 USC § 230(e)(5); 18 USC § 1591", "consequence": "Hosting content that violates federal sex-trafficking statutes (18 USC § 1591) or state laws prohibiting promotion of prostitution is outside the § 230 shield, regardless of ToS terms. Pub. L. 115-164 (FOSTA-SESTA, 2018) created the carve-out." }, { "clause_id": "unilateral_mass_arbitration_clause", "name_de": "Unilateral Mass-Arbitration Procedure Clause", "bgb_ref": "Heckman v. Live Nation Entertainment, Inc. (C.D. Cal. 2023, aff'd 9th Cir. 2024)", "consequence": "Clauses that give the defendant unilateral control over the order of bellwether cases or that effectively foreclose individual relief have been struck down. Mass-arbitration-defense clauses must preserve a fair individual-arbitration alternative or risk invalidation of the entire arbitration provision." }, { "clause_id": "fraud_or_wilful_injury_exemption", "name_de": "Liability Disclaimer for Own Fraud or Wilful Injury", "bgb_ref": "Cal. Civ. Code § 1668", "consequence": "California Civ. Code § 1668 voids contractual provisions purporting to exempt a party from liability for its own fraud, wilful injury, or violation of law. Most states have analogous common-law or statutory rules." }, { "clause_id": "magnuson_moss_implied_warranty_disclaimer", "name_de": "Disclaimer of Implied Warranty on Consumer Product with Written Warranty", "bgb_ref": "15 USC § 2308 (Magnuson-Moss)", "consequence": "Where the service is a 'consumer product' within Magnuson-Moss and a written or service-contract warranty is given, implied warranties of merchantability and fitness for purpose cannot be disclaimed." }, { "clause_id": "pre_checked_auto_renewal", "name_de": "Pre-Checked Auto-Renewal Consent", "bgb_ref": "15 USC § 8401 (ROSCA); 16 CFR Part 425; Cal. Bus. & Prof. Code § 17602", "consequence": "ROSCA, the FTC Click-to-Cancel Rule, and the California ARL require affirmative, conspicuous consent to recurring charges. Pre-checked boxes or buried disclosure violate the rules and expose the business to civil penalties — FTC up to $51,744 per violation; California civil penalties under the UCL and CLRA." } ], "court_cases": [ { "case": "Specht v. Netscape Communications Corp.", "year": 2002, "url": "https://casetext.com/case/specht-v-netscape-communications-corp-2", "relevance": "Foundational online-contract case. Terms placed below the download button without an affirmative click were not enforceable because the user had no reason to scroll past the button. 306 F.3d 17 (2d Cir.)." }, { "case": "Meyer v. Uber Technologies, Inc.", "year": 2017, "url": "https://www.courtlistener.com/opinion/4546330/meyer-v-uber-technologies-inc/", "relevance": "Crystallised the modern clickwrap test: a reasonably-conspicuous notice that creating an account constitutes agreement to the linked terms, presented immediately adjacent to the registration button, with the hyperlink visually distinguished, satisfies the assent requirement. 868 F.3d 66 (2d Cir.)." }, { "case": "Nguyen v. Barnes & Noble, Inc.", "year": 2014, "url": "https://law.justia.com/cases/federal/appellate-courts/ca9/12-56628/12-56628-2014-08-18.html", "relevance": "Browsewrap unenforceable absent actual notice — refused to enforce arbitration clause where the only notice was a footer hyperlink to the terms. 763 F.3d 1171 (9th Cir.)." }, { "case": "Douglas v. U.S. District Court (Talk America)", "year": 2007, "url": "https://law.justia.com/cases/federal/appellate-courts/F3/495/1062/611829/", "relevance": "Posting amended terms on the website without notification to the user did not bind the user to the changes. Established notice + opportunity-to-cancel as the modern modification template. 495 F.3d 1062 (9th Cir.)." }, { "case": "AT&T Mobility LLC v. Concepcion", "year": 2011, "url": "https://www.law.cornell.edu/supremecourt/text/09-893", "relevance": "FAA preempts state-law rules that disfavour class-action waivers in consumer arbitration agreements. Class-action waivers paired with mandatory individual arbitration are enforceable. 563 U.S. 333." }, { "case": "Zeran v. America Online, Inc.", "year": 1997, "url": "https://law.justia.com/cases/federal/appellate-courts/F3/129/327/591338/", "relevance": "Foundational § 230 case. Subsection (c)(1) construed broadly to bar state-law tort claims against platforms for user-posted content (defamation, negligence, intentional infliction). 129 F.3d 327 (4th Cir.)." }, { "case": "Force v. Facebook, Inc.", "year": 2019, "url": "https://www.courtlistener.com/opinion/4720700/force-v-facebook-inc/", "relevance": "Extended § 230 to algorithmic recommendation systems — platforms not liable for promoting third-party content via recommendation algorithms. 934 F.3d 53 (2d Cir.)." }, { "case": "Heckman v. Live Nation Entertainment, Inc.", "year": 2024, "url": "https://www.courtlistener.com/opinion/9408944/heckman-v-live-nation-entertainment-inc/", "relevance": "Struck down a mass-arbitration response clause that gave the defendant unilateral selection of bellwether cases and effectively foreclosed individual relief. Confirms that mass-arbitration-defense clauses must preserve a fair individual-arbitration alternative. 686 F. Supp. 3d 939 (C.D. Cal.), aff'd 9th Cir." } ], "further_reading": { "bgb_articles": [ "47 USC § 230 — Section 230 (intermediary immunity)", "47 USC § 230(e)(5) — FOSTA-SESTA sex-trafficking carve-out", "17 USC § 512 — DMCA Online Copyright Infringement Safe Harbor", "37 CFR § 201.38 — DMCA Designated Agent Registration", "9 USC § 2 — Federal Arbitration Act", "9 USC §§ 401-402 — EFAA (2022)", "15 USC §§ 7001-7031 — ESIGN Act", "15 USC § 7701 et seq. — CAN-SPAM Act", "47 USC § 227 — TCPA", "15 USC §§ 2301-2312 — Magnuson-Moss Warranty Act", "15 USC § 8401 et seq. — ROSCA", "16 CFR Part 425 — FTC Click-to-Cancel Rule", "UCC § 2-316 — Warranty Disclaimers", "UCC § 2-719 — Limitation of Remedies", "Cal. Civ. Code § 1668 — Fraud / wilful injury", "Cal. Civ. Code § 1751 — CLRA non-waivability", "Cal. Bus. & Prof. Code § 17600 et seq. — California ARL" ], "chaindoc_blog": [ "https://chaindoc.io/blog/legal-strength-blockchain-e-signatures" ] }, "lastVerified": "2026-05-10", "confidence": "high", "validationConflicts": [] }, { "type": "ucc-article-2", "name": "UCC Article 2 — Sale of Goods", "name_de": "UCC Article 2 — Sale of Goods", "category": "foundation", "schema_version": 1, "form_requirement": { "base": "free", "bgb_ref": "UCC § 2-201 — Statute of Frauds for sale of goods of $500 or more", "alternatives": [ "electronic" ], "notes": "UCC § 2-201(1) requires a writing signed by the party against whom enforcement is sought for sale-of-goods contracts of $500 or more. Three statutory cures: merchant memo (§ 2-201(2)), part performance (§ 2-201(3)(c)), specially manufactured goods (§ 2-201(3)(a)), and judicial admission (§ 2-201(3)(b)). ESIGN/UETA validate electronic records as 'writing'. UCC has been adopted with variations in 49 states plus DC; Louisiana never adopted Article 2 and applies La. Civ. Code arts. 2438-2659 instead." }, "required_clauses": [], "optional_clauses": [ { "id": "scope_goods", "name": "Scope — Transaction in Goods", "name_de": "Scope — Transaction in Goods", "bgb_ref": "UCC § 2-102; UCC § 2-105", "notes": "Article 2 applies to 'transactions in goods'. 'Goods' = all things which are movable at the time of identification to the contract for sale (§ 2-105(1)). For mixed goods-and-services contracts, the predominant purpose test (Bonebrake v. Cox, 499 F.2d 951 (8th Cir. 1974)) decides whether Article 2 applies." }, { "id": "merchant_status", "name": "Merchant Status", "name_de": "Merchant Status", "bgb_ref": "UCC § 2-104", "notes": "'Merchant' = a person who deals in goods of the kind or otherwise by occupation holds themselves out as having knowledge or skill peculiar to the practices or goods involved. Heightened standards apply: § 2-201(2) merchant-memo exception, § 2-207 different/additional terms, § 2-314 implied warranty of merchantability." }, { "id": "battle_of_forms", "name": "Battle of the Forms", "name_de": "Battle of the Forms", "bgb_ref": "UCC § 2-207", "notes": "Definite expression of acceptance operates as acceptance even if it states additional or different terms. Between merchants, additional terms become part of the contract unless (a) offer expressly limits acceptance to its terms, (b) they materially alter, or (c) notification of objection given within reasonable time. Knockout rule for different terms is the majority view." }, { "id": "statute_of_frauds_goods", "name": "Statute of Frauds — $500 Threshold", "name_de": "Statute of Frauds — $500 Threshold", "bgb_ref": "UCC § 2-201", "notes": "Writing must (a) be sufficient to indicate a contract for sale was made, (b) be signed by party to be charged, and (c) state a quantity term. Contract not enforceable beyond quantity stated. The proposed 2003 amendments to UCC § 2-201 (raising threshold to $5,000) were never adopted by any state and were withdrawn in 2011." }, { "id": "warranty_merchantability", "name": "Implied Warranty of Merchantability", "name_de": "Implied Warranty of Merchantability", "bgb_ref": "UCC § 2-314", "notes": "Implied in contract for sale of goods if seller is a merchant with respect to goods of that kind. Goods must be (a) fit for ordinary purposes for which such goods are used, (b) pass without objection in the trade, (c) of fair average quality, (d) adequately contained, packaged, and labeled, (e) conform to promises on label." }, { "id": "warranty_fitness", "name": "Implied Warranty of Fitness for Particular Purpose", "name_de": "Implied Warranty of Fitness for Particular Purpose", "bgb_ref": "UCC § 2-315", "notes": "Implied when seller at time of contracting has reason to know any particular purpose for which goods are required and buyer is relying on seller's skill or judgment to select or furnish suitable goods. Applies to merchants and non-merchants alike, but requires actual buyer reliance." }, { "id": "warranty_disclaimer", "name": "Warranty Disclaimer", "name_de": "Warranty Disclaimer", "bgb_ref": "UCC § 2-316", "notes": "Implied warranty of merchantability disclaimer must mention 'merchantability' and, if written, be conspicuous. Implied warranty of fitness disclaimer must be written and conspicuous. 'AS IS', 'WITH ALL FAULTS', and similar language disclaims all implied warranties (§ 2-316(3)(a))." }, { "id": "limitation_remedies", "name": "Limitation or Modification of Remedies", "name_de": "Limitation or Modification of Remedies", "bgb_ref": "UCC § 2-719", "notes": "Parties may limit remedies (e.g., repair/replace or refund of purchase price) and exclude consequential damages. Two limits: (a) where the limited remedy fails of its essential purpose (§ 2-719(2)), other remedies revive; (b) limitation of consequential damages for personal injury in consumer goods is prima facie unconscionable (§ 2-719(3))." }, { "id": "risk_of_loss", "name": "Risk of Loss", "name_de": "Risk of Loss", "bgb_ref": "UCC §§ 2-509, 2-510", "notes": "F.O.B. shipment (§ 2-319(1)(a)): risk passes when goods duly delivered to carrier. F.O.B. destination (§ 2-319(1)(b)): risk passes on tender at destination. Section 2-510 shifts risk back to breaching party where goods are non-conforming." }, { "id": "perfect_tender", "name": "Perfect Tender Rule", "name_de": "Perfect Tender Rule", "bgb_ref": "UCC § 2-601", "notes": "If goods or tender of delivery fail in any respect to conform to contract, buyer may (a) reject the whole, (b) accept the whole, or (c) accept any commercial unit and reject the rest. Limited by seller's cure right (§ 2-508), installment-contract carve-out (§ 2-612), and good-faith requirement (§ 1-304)." }, { "id": "buyer_inspection_rejection", "name": "Inspection, Rejection, and Revocation of Acceptance", "name_de": "Inspection, Rejection, and Revocation of Acceptance", "bgb_ref": "UCC §§ 2-513, 2-602, 2-608", "notes": "Buyer has right to inspect before payment or acceptance (§ 2-513). Rejection must be within reasonable time after delivery and seasonably notified (§ 2-602). Revocation of acceptance available where non-conformity substantially impairs value and acceptance was reasonably induced (§ 2-608)." }, { "id": "seller_cure", "name": "Seller's Right to Cure", "name_de": "Seller's Right to Cure", "bgb_ref": "UCC § 2-508", "notes": "Within contract performance time, seller may notify buyer of intent to cure and then make a conforming delivery. After performance time, if seller had reasonable grounds to believe non-conforming tender would be acceptable, seller may have further reasonable time to substitute conforming tender." }, { "id": "louisiana_exception", "name": "Louisiana Exception", "name_de": "Louisiana Exception", "bgb_ref": "La. Civ. Code arts. 2438-2659", "notes": "Louisiana never adopted UCC Article 2. Sales of movables governed by the Louisiana Civil Code articles on Sale, which retain French civil-law origins (Pothier-derived). Practical drafters of goods contracts with a Louisiana nexus should review forum-selection and choice-of-law clauses with care." } ], "forbidden_in_agb": [], "court_cases": [ { "case": "Bonebrake v. Cox", "year": 1974, "url": "https://law.justia.com/cases/federal/appellate-courts/F2/499/951/", "relevance": "Established predominant purpose test for mixed goods-services contracts: Article 2 applies where rendition of service is incidental to delivery of goods. 499 F.2d 951 (8th Cir.)." }, { "case": "ProCD, Inc. v. Zeidenberg", "year": 1996, "url": "https://law.justia.com/cases/federal/appellate-courts/F3/86/1447/512218/", "relevance": "Shrink-wrap license enforceable under UCC § 2-204 — vendor was master of offer; buyer's act of using software after notice of license terms constituted acceptance. 86 F.3d 1447 (7th Cir.)." }, { "case": "Hill v. Gateway 2000, Inc.", "year": 1997, "url": "https://law.justia.com/cases/federal/appellate-courts/F3/105/1147/484846/", "relevance": "Extended ProCD reasoning to standard-form contracts inside computer packaging; terms enforced under § 2-204 where buyer had opportunity to return product after reading. 105 F.3d 1147 (7th Cir.)." }, { "case": "Step-Saver Data Systems, Inc. v. Wyse Technology", "year": 1991, "url": "https://law.justia.com/cases/federal/appellate-courts/F2/939/91/195927/", "relevance": "Box-top license treated as additional term under § 2-207; materially altered original phone-order contract and therefore did not become part of it. 939 F.2d 91 (3d Cir.)." } ], "further_reading": { "bgb_articles": [ "UCC § 1-201 — General Definitions", "UCC § 1-304 — Obligation of Good Faith", "UCC § 2-102 — Scope", "UCC § 2-104 — Definitions: Merchant", "UCC § 2-105 — Definitions: Goods", "UCC § 2-201 — Statute of Frauds", "UCC § 2-202 — Parol Evidence", "UCC § 2-204 — Formation in General", "UCC § 2-205 — Firm Offers", "UCC § 2-207 — Battle of the Forms", "UCC § 2-209 — Modification, Rescission, Waiver", "UCC § 2-302 — Unconscionable Contract or Term", "UCC § 2-314 — Implied Warranty: Merchantability", "UCC § 2-315 — Implied Warranty: Fitness for Particular Purpose", "UCC § 2-316 — Exclusion or Modification of Warranties", "UCC § 2-508 — Cure by Seller", "UCC § 2-509 — Risk of Loss in the Absence of Breach", "UCC § 2-510 — Effect of Breach on Risk of Loss", "UCC § 2-513 — Buyer's Right to Inspection", "UCC § 2-601 — Buyer's Rights on Improper Delivery", "UCC § 2-602 — Manner and Effect of Rejection", "UCC § 2-608 — Revocation of Acceptance", "UCC § 2-719 — Limitation or Modification of Remedies", "La. Civ. Code arts. 2438-2659 — Louisiana Sales of Movables" ], "chaindoc_blog": [ "https://chaindoc.io/blog/legal-strength-blockchain-e-signatures" ] }, "lastVerified": "2026-05-10", "confidence": "high", "validationConflicts": [] } ]