Void and Unenforceable

News & Analysis as of

Is the Attorney's Fees Clause Moot in an Illegal Contract? – Depends On Your Involvement, Explains First Appellate District Court

The Court of Appeal recently clarified when a party can recover attorney's fees under a real estate purchase contract that is ruled to be illegal. California courts have previously enforced attorney's fees provisions in a...more

Don’t Tell the Government “It Wasn’t Me”: ASBCA Holds Contract Void Ab Initio for Fraud

In the Appeal of Vertex Construction & Engineering, ASBCA No. 58988, decided last month, the Armed Services Board of Contract Appeals (“ASBCA”) exercised a “harsh” remedy in declaring Appellant’s contract void ab initio...more

New Jersey Supreme Court Calls for More Specific Language in Arbitration Agreements

Although New Jersey public policy generally favors arbitration as a method of resolving disputes, following the New Jersey Supreme Court’s unanimous holding in Atalese v. U.S. Legal Services Group L.P., companies doing...more

Texas Court Refuses to Apply Texas Choice of Law in Non-Compete Fight Involving Texas Bank

A recurrent theme in non-compete litigation is the overriding importance of choice-of-law. The latest example comes to us from the United States District Court for the Southern District of Texas and pits a Texas choice-of-law...more

Keep Your Hands Off the Customers … and the Cows

A federal district court in Washington has confirmed that an employer’s relationship with the cows that its employees serviced is insufficient to establish a legitimate protectable interest to enforce a non-compete....more

Browsewrap Agreement Held Unenforceable Against Consumer Due to Insufficient Notice

Many commercial websites rely on “browsewrap” agreements to bind visitors to commercial terms. A recent decision by the Ninth Circuit suggests that a review of how those terms are presented may be in order to ensure...more

Illinois Court Holds That Tax Deed Was Not Void For Lack Of Proper Notice

Excalibur Energy (“Excalibur”) attempted to void a tax deed for certain property for which the defendant, Marilyn Rochman, also claimed ownership. To achieve this end, Excalibur filed a new action in circuit court for...more

Sixth Circuit Voids FLSA Collective Action Waiver Signed as Part of Separation and Release Agreement in Killion v. KeHE...

On July 30, 2014, the Sixth Circuit Court of Appeals invalidated a collective action waiver signed as part of a separation and release agreement. The ruling is significant because it is the first time a federal appellate...more

Beware! “Standard Terms” in Your Company’s Separation Agreement Might Trigger a Lawsuit: EEOC Says Common Provisions Are...

Recently, the EEOC filed two separate actions in federal court challenging form separation agreements given to employees as part of reductions in force. The agency takes issue with provisions that impact an individual’s...more

Arbitration Clause In Agreement Between Insured And Reinsurer Held Invalid Under Nebraska Law

A federal district court has held an arbitration clause in a Reinsurance Participation Agreement (RPA) between an insured and a reinsurer invalid and unenforceable under governing state law. The RPA complemented a standing...more

Employer’s Handbook Disclaimer Renders Agreement To Arbitrate Unenforceable, New Jersey District Court Holds

Employee handbooks typically contain an overview of company history, a set of employment policies and general guidance, and a clear and prominent disclaimer that nothing in the handbook creates a contract of employment...more

Liquidated Damages Provision in Texas Power Contract Found Void as Unenforceable Penalty

The Supreme Court of Texas (“Court”) recently held that a liquidated damages provision in a contract for renewable energy was unenforceable because it operated as a penalty without having any reasonable relationship to actual...more

Invalidity of Transactions with a Flaw in Will

On 10 December 2013 the Presidium of the Supreme Commercial Court (the “Presidium”) issued Information Letter No. 162 with an overview of court practice on the application of Articles 178 and 179 of the Russian Civil Code...more

Supreme Court of Rhode Island Declares Usury Savings Clauses Void

For public policy reasons, the Rhode Island Supreme Court recently held that usury savings clauses are void and unenforceable. In NV One, LLC v. Potomac Home Capital, LLC, borrowers who had defaulted on their note filed a...more

Frustration of Purpose: A Frustrating Doctrine

Next Gen Capital, LLC v. Consumer Lending Associates, LLC illustrates the difficulty a tenant faces when trying to avoid liability for breaching a lease based on the “frustration of purpose” defense. No. 1 CA-CV 12-0624...more

Court Nixes Non-Appealability Clause in Arbitration Agreement

Generally speaking, arbitration is a matter of contract, and arbitration agreements must be enforced according to their terms. The Ninth Circuit recently issued a caveat, however. In In re Wal-Mart Wage & Hour Employment...more

German Court Finds 25 Provisions in Google’s Online Terms of Use and Privacy Policy to Be Unenforceable

In November 2013, the Berlin District Court ruled that all of the 25 provisions in Google’s online terms of use and privacy policy that had been challenged by the German Federation of Consumer Associations (VZBV) are...more

Non-appealability clauses eliminating all federal court review of arbitration awards held unenforceable

I generally advise most clients under most circumstances to avoid arbitration clauses. Over the long run, they do not deliver on the promise of streamlined, cost effective litigation....more

English Court Finds Shareholder Default Provisions Unenforceable as a Penalty

Decision serves as a reminder that careful consideration should be given to provisions dealing with the consequences of breaches of restrictive covenants and other terms of commercial agreements....more

Know What You Are Protecting When You Develop a Non-Compete

A recent North Carolina Court of Appeals case, Phelps Staffing, LLC v. C.T. Phelps, Inc. and Charles T. Phelps, COA12-886, 2013 WL 1575409 (N.C. Ct. App. Apr. 16, 2013), highlights the need for employers who either have...more

Covenant, Shmovenant? Ten-Year Nationwide Non-Compete in Asset Purchase Agreement Forms the Basis for Tortious Interference With...

Once again we are reminded that covenants not to compete given in connection with the sale of a business are an entirely different species from the employment kind. Last week, in Oros & Busch Application Technologies, Inc. v....more

BB&K Police Bulletin: Ammunition Regulations: Criminal Statutes Restricting “Handgun Ammunition” Vague and Invalid

Overview: A California appellate court recently held that criminal statutes regulating handgun ammunition (defined as ammunition “principally for use” in “pistols, revolvers, and other firearms”) were unconstitutionally vague...more

Arbitration Agreement Awarding Fees To Prevailing Party In FLSA Case Held Not Enforceable By Florida’s Second DCA

Florida’s Second District Court of Appeal recently held that an arbitration agreement was unenforceable in the context of a claim brought under the federal Fair Labor Standards Act (FLSA) when the agreement provides for an...more

Legitimate "Newco" Is Entitled To Partial Fee Award

In Brown Bark III LP v. Haver, 2013 DJDAR 12439 (2013), the California Court of Appeal for the Fourth Appellate District decided an interesting fee case arising in the commercial litigation context....more

The Ninth Circuit Rules Employer’s Arbitration Agreement Unenforceable Under California Law And Cautions Employers To Ensure...

Today, the Ninth Circuit, in Chavarria v. Ralphs Grocery Company (Case No. 11-56673), issued a decision affirming the denial of Ralphs Grocery Company’s motion to compel arbitration in an action by an employee asserting...more

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