Our blog explores ideas around the law and technology.

Clausehound's a legal tech company, helping companies and firms automate their agreement negotiations.

Blog Bite: Does your contractor own the IP developed during the term of their agreement?

July 06, 2015
When employees resign and enter into consulting agreements, it is important to ensure that all restrictive covenants continue in effect, and that the consulting agreement contain an IP transfer agreement similar to the one contained in the employment agreement
Intellectual Property
Consulting Agreement
Ownership of Work Product
Ownership of Intellectual Property
Human Resources
IP Transfer

An Undervalued Purchase Price Can Face Objection By a Trustee in Bankruptcy

June 28, 2015
Although parties are generally free to negotiate their sale price, in the case of a sale by a bankrupt, the price must reflect the market value of the assets in order to be able to withstand an objection by a Trustee in Bankruptcy.
Purchase Price
Asset Purchase Agreement
Commercial Activities

Purchase Price May Be Satisfied by Cash or Securities

June 27, 2015
If the subscriber under a subscription agreement is a corporate body, they may satisfy the purchase price with a mix of cash and equity/debt securities.
Purchase Price
Subscription Agreement
Consideration
Company Formation

Indemnity May Be Limited to a Limited Period of Time

June 25, 2015
When drafting an indemnity clause in an asset purchase agreement, parties may wish to limit the time period in which the indemnity clause is to be effective.
Asset Purchase Agreement
Indemnity
Commercial Activities

Lawyers Liable for Damages for Failing to have Consulting Agreement Executed

June 24, 2015
Sometimes, one mistake leads to another. A Toronto law firm was recently hit with a $40,000 damages award for failing to advise their former client that she consider receiving advice on how to invest the $1.1 million they held in trust for her.
Consulting Agreement
Performance Standards
Human Resources

Developer Hacks Mobile App with Harmful Malware

June 20, 2015
The developer of the app 'Prized' was caught using its users' smartphones and other electronic devices to mine for cryptocurrency, which was damaging for the hardware, with the potential to leave it barely functional.
Representations and Warranties
Website Terms of Use
Commercial Activities

What are the Copyright Implications of Pinterest?

June 13, 2015
This article discusses the copyright issues associated with the use of the popular social networking site Pinterest. Pinterest encourages users not to pin their own items and cautions against self-promotion, but their terms of service contain representations and warranties about the ownership of all IP posted on Pinterest and non-infringement of third party IP.
Representations and Warranties
Website Terms of Use
Commercial Activities

Detailed Description of Assets May Avoid Title Transfer Issues

June 12, 2015
Parties to an asset purchase agreement may avoid unpleasant surprises with respect to title transfer issues if every asset, or category of assets is carefully itemized in a schedule to the agreement.
Transfer of Title
Asset Purchase Agreement
Commercial Activities

Scope of Release Is Crucial to Settlement Agreement

June 12, 2015
A good settlement agreement should clearly define the effect the agreement will have on future and current claims, and whether it applies to all claims between the parties, or only those claims arising out of a particular agreement or set of circumstances.
Settlement Agreement
Time Period of Release
Dispute Resolution

Sweetheart Lease Not So Sweet For The Sellers

June 05, 2015
Drafters of commercial lease agreements should beware when drafting the minimum rent clause. An option to renew an agreement can oblige the landlord to offer to renew for the original (lower) rent, although the rental market may have increased.
Commercial Lease
Minimum Rent
Commercial Activities

JV Parties Must Develop Comprehensive Background IP Protection Strategy

May 31, 2015
Joint ventures (JV) have lower capital costs than 100% acquisitions, which makes them increasingly popular during times of economic uncertainty, however JV partners are likely to be actual or potential competitors.
Intellectual Property
Proprietary Rights
Licence Restrictions
Grant of Licence
Commercial Activities

When Should a Company Declare Dividends?

May 26, 2015
When declaring dividends it is important to be aware that your company may be susceptible to a reassessment by the Canada Revenue Agency (“CRA”). This is something you want to avoid, therefore knowing when reassessment can be triggered can be important to your business.
Long Form
Dividends
Corporation
Tax
Corporate Finance

Blog Bite: Will Alabama enforce choice of law provisions?

April 24, 2015
This article posted on our partner site Mondaq.com discusses the impact of the ratified Amendment 884 to the Alabama Constitution. The author states that with this amendment, Courts will not enforce foreign law if it contradicts Alabama law.
Governing Law
Learn
USA

Blog Bite: What are the possible changes for corporations contracting with the federal government regarding confidentiality provisions?

April 22, 2015
This article posted on our partner site Mondaq.com discusses the changing regulations after a federal statute was enacted that prohibited federal funds to go to corporations who had confidentiality agreements which prevented the employees from reporting fraud, waste, or abuse to agencies.
Confidentiality
Consulting Agreement
Confidentiality Agreement
Learn
USA

Fundraising: Finding and Managing “Retail” and “Accredited” Investors

April 13, 2015
I performed some searches yesterday to identify recent publicly-listed technology companies via TMX Money and I found that technology companies and biotechnology companies are starting to take a major share of new listings on the venture exchange. For a growing company in this space, this is good news.
Long Form
Corporation
Accredited Investors
Investors
Technology
Corporate Finance

Choosing a Board of Directors or Board of Advisors For Your Business

February 23, 2015
Selecting a board of directors or a board of advisors is an important decision and should be given careful consideration. Both roles are treated differently for liability purposes.
Long Form
Corporation
Board of Directors
Liability
Fiduciary Duty
Company Formation

Registration of Your Business Outside of Your Legal Jurisdiction

December 15, 2014
To do business outside of the jurisdiction that a corporation is registered in, your corporation may need to apply for a licence for your corporation to be formed in that jurisdiction.
Long Form
Corporation
Trademark Registration
Jurisdiction
Commercial Activities
Articles of Incorporation

Data Security is Essential for Company Credibility

November 10, 2014
This month Home Depot announced that it was hacked and that 56 million credit card accounts were compromised, and that around 53 million customer email addresses were stolen as well. This articles discusses how hackers could have breached security and a suggested security protocol that a company and its data security team should consider.
Confidentiality
Confidential Information
Safeguarding Requirements
Long Form
Technology
Commercial Activities
Confidentiality Agreement

Blog Bite: How can a corporation enjoy tax benefits offered to Canadian-Controlled Private Corporations when the majority of its shareholders are non-residents?

September 24, 2014
This article posted on our partner site Mondaq.com refers to a recent Tax Court of Canada decision to make it clear that a corporation can now receive the tax benefits offered to Canadian-Controlled Private Corporations even though the majority of its shareholders are non-residents.
Shareholders Agreement
Learn
Canada (General)

Blog Bite: What must be considered when entering a joint venture agreement?

September 09, 2014
This article posted on our partner site Mondaq.com identifies primary concerns for a firm considering to enter a joint venture agreement viz. non-competition, confidentiality, liquidation clauses and defining the scope of the business opportunities.
Confidentiality
Non-competition
Confidentiality Agreement
Joint Venture Agreement
Learn
USA

Blog Bite: Unfair benefit derived from brand recognition

September 04, 2014
This article posted on our partner site Mondaq.com discusses the implications of the use of recognized trademarked goods by Google Glass software for the purpose of triggering ad popups in augmented reality.
Intellectual Property
Technology
Trademark Registration
IP Transfer
Blog Bites
UK

Board of Director Formalities

July 28, 2014
An early stage company, once incorporated, is required to have a board of directors.  To protect the shareholders of the corporation, rules and formalities of organizing a board of directors are set out.
Corporation
Board of Directors
Appointment of Directors Long Form
Quorum
Notice of Meetings
Company Formation

What constitutes a company in Ireland?

July 08, 2014
This article posted on our partner site Mondaq.com describes the features of a corporation in Ireland, notably that the company must have a real and substantive presence in Ireland and not merely a local registered office.
Jurisdiction Shopping
Learn
Ireland

Mergers, Partnerships and Joint Ventures – Basic Terms

June 02, 2014
I am often queried about what terms should be considered by companies that are considering entering into a merger, partnership or joint venture (which I will describe in this article as Joint Venture.
Long Form
Partnership
Mergers
Joint Ventures
Mergers and Acquisition

What kinds of corporate vehicles are available in Russia?

April 28, 2014
This article posted on our partner site Mondaq.com describes the various corporate vehicles available in Russia, including a Russian joint stock company, a Russian limited liability company and a nonn-Russian company with a wholly-owned Russian operating subsidiary.
Jurisdiction Shopping
Learn
Russia

When Fundraising, “Know” Your “Accredited Investor”

March 17, 2014
When raising money in Ontario or anywhere in Canada for your startup company, you fall under the scrutiny of the rules of the Securities Act and related National Instruments that set the rules on the nature and type of disclosure that you need to provide to your potential investors.
Long Form
Corporation
Investor
Term Sheet
Independent Legal Advice
Accredited Investor
Due Diligence
Prospectus Exemption
Corporate Finance
Articles of Incorporation
Investor Term Sheet

Defending Your Business Name

February 24, 2014
Once your company has started to gain some 'traction' (subscribers, customers) you will turn a corner where it has its own brand and identity. At that point in time you will likely want to protect that identity with a trade-mark.
Trademark Registration
Business
Commercial Activities
Canada (General)

Blog Bite: Learn more about the 'fast track patent program'

October 01, 2013
This article posted on our partner site Mondaq.com provides a brief description on how the clean technology is emerging into a global industry.
Intellectual Property
Investors
Technology
Start-up
Business
Blog Bites
USA
Canada (General)

Legal Tips and Tricks: Negotiating an Agreement Should Start with a Blank Page

September 30, 2013
In this article, we describe four (4) simple steps to follow to make sure that your interests are protected when drafting a term sheet.
Intellectual Property
Confidentiality
Long Form
Term Sheet
Independent Legal Advice
Contract Drafting
Contract Negotiations
Commercial Activities
Share Purchase Agreement

Blog Bite: Can third parties who have not signed a contract be bound to its terms?

July 22, 2013
This article posted on our partner site Mondaq.com discusses a recurring problem of parties purporting to bind third parties to a contract. The author makes it clear that merely mentioning an individual or entity in a contract is insufficient to legally bind the individual or entity.
Joint Venture Agreement
Learn
USA (Federal)

Blog Bite: Can employers get independent contractors to sign a non-compete?

June 21, 2013
This article posted on our partner site Mondaq.com states that independent contractors can sign confidentiality agreements, but employers who wish to maintain the independent contractor status (e.g., to avoid compliance with employee protection laws) cannot require them to sign non-compete agreements.
Consulting Agreement
Non-competition
Learn
USA

Legal Tips and Tricks: Boilerplate Provisions Of Your Agreement

June 13, 2013
Although the language appears the same every time you read these clauses, subtle differences can and will make a difference in interpreting your commercial agreement or acquisition transaction documents.
Intellectual Property
Long Form
Costs and Expenses
Assignment
Dispute Resolution
Generally Used Clauses
Headings
Counterparts
Entire Agreement
Enurement
Amendment
Severability
No Waiver
Commercial Activities

How does one incorporate in British Virgin Islands?

March 05, 2013
This article posted on our partner site Mondaq.com describes the five types of companies that could be incorporated under the BVI Business Companies Act.
Jurisdiction Shopping
Learn
British Virgin Islands

How to incorporate in Sri Lanka?

October 17, 2012
This article posted on our partner site Mondaq.com explains the steps to incorporation in Sri Lanka and the required characteristics of an incorporated company.
Jurisdiction Shopping
Learn
Sri Lanka

Blog Bite: Can a corporation be considered a Canadian controlled private corporation for taxation purposes when a majority of the voting shares are held by non-residents if the USA prevents non-resident shareholders from electing a majority of the directors?

September 13, 2012
This article posted on our partner site Mondaq.com is about how relevant the provisions of a USA are for determining tax status particularly as a Canadian controlled private corporation.
Shareholders Agreement
Learn
Canada (Federal)

Blog Bite: What should be kept in mind when considering establishing a joint venture in China?

June 11, 2012
This article posted on our partner site Mondaq.com notes the difficulty of establishing successful joint ventures in the Chinese market, suggests some best practices, and to avoid the common practice of non-compliance with the law through maintaining comprehensive legal documentation on matters like ownership and management.
Nature of Relationship
Joint Venture Agreement
Learn
China

Blog Bite: Can joint ventures legally set fixed prices for products sold within a market, albeit under each of the separate brand names of the joint venture's members?

March 28, 2006
This article posted on our partner site Mondaq.com discusses a US Supreme Court decision where the court held that two traditional competitors that form a joint venture can, pursuant to the purpose of the venture, set a fixed price for products sold under each of the joint venture's members brand names.
Nature of Relationship
Joint Venture Agreement
Learn
USA (Federal)

Blog Bite: How can a mortgage company and title company form a joint venture without risking a violation of the Real Estate Settlement Procedures Act (RESPA)?

December 01, 2004
This article posted on our partner site Mondaq.com is a guide to the evaluative criteria used by the Department of Housing and Urban Development (HUD) in determining whether a joint venture between a mortgage company and title company is a 'sham controlled business arrangement'.
Nature of Relationship
Joint Venture Agreement
Learn
USA

How do you incorporate a company in the Bahamas?

February 21, 2000
This article posted on our partner site Mondaq.com provides a summary of the principal provisions of the International Business Companies Act, which is the statute that governs or the incorporation, registration and operation of International Business Companies in the Bahamas.
Jurisdiction Shopping
Learn
Bahamas

Blog Bite: What are the key elements of a Technology Transfer Agreement?

November 02, 1999
This article posted on our partner site Mondaq.com discusses the importance of properly incorporating clear and unambiguous technology transfer and license elements in a Technoloy Transfer Agreement.
Intellectual Property
Technology
Start-up
Payment Terms
Agreements
Termination Agreement
Intellectual Property Licensing Agreement
Blog Bites
Royalties
USA

Mauritius - What are international companies (ICs)?

May 20, 1997
This article posted on our partner site Mondaq.com describes International Companies (ICs) and its main features: tax exemption, capital requirements, filing requirements, and meeting locations.
Jurisdiction Shopping
Learn