In this issue:
Importance of Carefully Drafted Provisions Limiting Damages
By Tom Sullivan
Contractual provisions limiting the types of damages that are available in the event of a breach, i.e. "limitation-of-liability provisions," are common in various types of commercial contracts. Such provisions may be useful in shielding a breaching party from significant liability, but their prevalence may cause some lawyers to view them as "mere boilerplate." Global Crossing Telecomms., Inc. v. CCT Commc'ns, 46 B. R. 97 (Bankr. S.D.N.Y. 2011), however, underscores that these provisions are not automatically enforced and are subject to certain exceptions. In light of this ruling, attorneys may want to consider several issues when drafting these provisions.
Global Crossing involved a dispute between Global Crossing Telecommunications, Inc. (Global Crossing) and CCT Communications, Inc. (CCT), two common carriers of telecommunication services. Id. at 102. The dispute arose out of a closely negotiated contract under which Global Crossing agreed to provide services to CCT; CCT, in turn, resold the services to retail customers. Id. Under the terms of the contract, Global Crossing charged CCT a flat monthly fee for calls to some destinations and a per-minute charge for calls to other destinations. Under this arrangement, Global Crossing had to "eat," or absorb, certain costs of international calls on the monthly fee plan that terminated in certain international areas. Id. This program became too costly and Global Crossing purported to terminate the agreement. CCT counterclaimed, seeking damages for breach of contract among other claims. Id. at 103.
Introducing Our Financial Institutions Consulting Practice
Morgan Lewis has a seasoned team of lawyers across multiple practices that have spent the last 18 months working as a unit to help some of the nation's largest financial institutions successfully withstand the numerous highly charged regulatory, legislative, and private actions that have been launched since the financial crisis began. To better meet the needs of our clients, we have created a Financial Institutions Consulting Practice composed of a team of attorneys who are able to efficiently review the policies, procedures, practices, and controls of financial institutions and provide meaningful recommendations for proactively reducing the business risks attendant to negative regulatory reviews, media coverage, and lawsuits.
Trend Report: Focus on Financial Services
By Romeo Quinto
This is the first of a series of trend reports tailored for our clients and friends to help companies stay a step ahead of legal issues that may affect their businesses. In this issue, we scrutinize financial analyst reports to identify potential litigation trends in the financial services industry. For the most recent three-month period, the following potential trends have been identified:
NY Commercial Litigation
Morgan Lewis's New York office has a strong commercial litigation practice. Our team works together with commercial litigators throughout the firm as well as securities and insurance recovery attorneys in our home office. We represent a diverse group of clients, including a foreign sovereign, chemical manufacturers, a multinational transportation and aerospace company, international shipping and logistics providers, financial services companies, and indenture trustees.