Updates and Errors, The Tech Contracts Handbook

The third edition of the Tech Contracts Handbook (2021) remains quite up to date. But the law changed on at least one point, so this post offers an update.

This post also offers error corrections. Sadly, not a lot of books covering as much material as TCH get to publication without a few errors, and mine is no exception, even after peer review through ABA Publishing. (Note defensive tone.) Fortunately, most errors involve things like wrong cites in footnotes, and the two substantive errors involve wrong information but not wrong recommendations. This post includes error corrections too.

Thank you in particular to Kara Plastich, who’s been working on translating the book into Mandarin for an edition to be published soon in Taiwan. Without her brilliance (in two languages!) and attention to detail, we wouldn’t have caught half of this stuff.

In the text below, I call The Tech Contracts Handbook, 3rd edition as “TCH3.”

Update

Subchapter II.J.8 (“Limited Data Terms”), pp. 140-141

The GDPR definition of “processor” has been clarified since publication of TCH3. It is no longer possible for a vendor with access to customer data to avoid processor status on the grounds that it doesn’t literally host that data (a ridiculous outcome, IMHO). So the clause box on page 140, which asserts that such a provider isn’t a processor, no longer works. We posted a replacement version of that clause some time ago in our clause library, and you should use that instead.

Substantive Errors

Chapter II.K (“Warranties”), pp. 143-144

The paragraph beginning, “Technically, the two have different meanings,” has some confusing information, as well as some wrong information. The text is correct that a representation “states a present fact,” but it should clarify that it also includes past facts. And the text there about warranties is wrong. They’re not limited to future facts; they can address the past, present, or future. However, the recommendation in the text remains the same: use “warrants” alone in most warranties. But “represents” does you no harm if you’re on the receiving end of the warranty, and it could help you.

Subchapter II.M.5, “Limit on Indemnity Performance (as Opposed to Liability),” pp. 207-208

The text overstates its case. It’s not guaranteed that a limit of liability (LoL) won’t apply to an indemnity against third party claims. Rather, it’s a risk, particularly related to the indemnitor’s duty to defend (as opposed to its duty to pay judgments or settlements). The outcome isn’t certain and depends on the laws of the jurisdiction and the specific terms of the indemnity and LoL. However, the remedy suggested remains valuable for the indemnitor, whether this LoL issue qualifies as a risk or a certainty. An indemnitor hoping to limit indemnity responsibility should add a clause limiting the cost of indemnity performance obligations, like the one on TCH3 page 208, in addition to the LoL.

Other Errors

Listed by chapter:

I.A.1, f.n. 3, p. 5: Reference should be to Subchapter 1.C.3.
I.G.2 p. 56: In 2nd example in clause box, “Distributor” should be “Reseller.”
II.C, p. 82: In 2nd-to-last para. of chap., 2nd-to-last sentence, “first” should be “second.”
II.E, p. 90: In 1st full sentence, “second” should be “first.”
II.F.2, p. 96: In last para. of chap., 1st sentence, reference should be to Chapter 1.c.3 (“License Conditions and Restrictions”).
II.H.1, p. 101: In para. starting, “Despite the separation …,” in suggested language in quotes (starting, “For the avoidance …”), insert “limit” after “not” and before “either.”
II.J.8, p. 141: 2nd-to-last para. of chap. should not be in box.
II.I.7, p. 162, f.n. 55: In 2nd para./sentence, “warranties” should be “remedies.”
II.L.1, p. 166: In 3rd sentence of Sec. (a)(a) of clause box, delete “include, without limitation.”
II.L.1, p. 169, f.n. 58: Reference should be to footnote 56 (not 59).
II.L.2, p. 175, clause box and f.n. 64: Reference in clause box title should be to footnote 64 (not 9). In last sentence of f.n. 64, delete “and third.”
II.L.3, p. 178: Reference in clause box title should be to footnote 67 (not 12).
II.L.3, p. 180: Reference in clause box title should be to footnote 71 (not 16).
II.L.4, p. 185: Reference in clause box title should be to footnote 76 (not 21).
II.L.4, p. 187, f.n. 77: Reference should be to footnote 72 (not 76).
II.L.4, p. 188: Reference in clause box title should be to footnote 78 (not 23). F.n. 79 should refer to footnote 72 (not 76).
II.M.5, p. 208, f.n. 90: Last sentence in 1st para. should refer to footnote 88 (not 93).
II.P.3, p. 223: Reference at end of clause box should be to footnote 95 (not 40).
II.P.4, p. 229: In last sentence of para. starting “The second example also …,” “arbitrator” should be “escrow agent.”
II.V.2, p. 260: At end of clause box, reference should be to footnote 109 (not 54).
III.C., p. 293: In clause box, 1st sentence, “will” should be “shall.”
Appen. 4, p. 360, f.n. 8: “California Consumer Privacy Act” should be “California Privacy Rights Act.”
Appen. 4, p. 361: In para. starting, “Bullet 9 is the big …,” “bullet 9” should be “bullet 10.”

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