Comments on: “Arising Out Of” and “Relating To” http://www.adamsdrafting.com/2007/10/24/arising-out-of-and-relating-to/ Tue, 31 Jan 2012 01:23:03 +0000 hourly 1 http://wordpress.org/?v=abc By: Scott http://www.adamsdrafting.com/2007/10/24/arising-out-of-and-relating-to/comment-page-1/#comment-16627 Scott Tue, 13 Nov 2007 17:50:09 +0000 http://www.adamsdrafting.com/2007/10/24/arising-out-of-and-relating-to/#comment-16627 Ken A claim in tort might arise out of the performance of a contract - but would it then be described as a claim "under the contract"? Ken
A claim in tort might arise out of the performance of a contract – but would it then be described as a claim “under the contract”?

]]> By: Ken Adams http://www.adamsdrafting.com/2007/10/24/arising-out-of-and-relating-to/comment-page-1/#comment-11672 Ken Adams Sat, 27 Oct 2007 11:06:43 +0000 http://www.adamsdrafting.com/2007/10/24/arising-out-of-and-relating-to/#comment-11672 D.C.: This is a good example of an issue that wouldn't fall under <em>arising out of</em> but might well fall under <em>relating to</em>. I don't think there's any compelling reason why one would want it to fall within the scope of the dispute-resolution provision in the license agreement, as it's a very different sort of dispute. But if I wanted it to fall within the scope, I'd add to the dispute-resolution provision in the license agreement some sort of catch-all rather than rely on <em>relating to</em>. Ken D.C.: This is a good example of an issue that wouldn’t fall under arising out of but might well fall under relating to. I don’t think there’s any compelling reason why one would want it to fall within the scope of the dispute-resolution provision in the license agreement, as it’s a very different sort of dispute. But if I wanted it to fall within the scope, I’d add to the dispute-resolution provision in the license agreement some sort of catch-all rather than rely on relating to. Ken

]]> By: D. C. http://www.adamsdrafting.com/2007/10/24/arising-out-of-and-relating-to/comment-page-1/#comment-11308 D. C. Wed, 24 Oct 2007 21:45:00 +0000 http://www.adamsdrafting.com/2007/10/24/arising-out-of-and-relating-to/#comment-11308 There's another possibility: In negotiating a forum-selection clause, you might be willing to have "arising under" matters litigated in the other side's forum, while (quietly) leaving open that other matters might be litigated elsewhere. Here's a hypothetical example: a) Vendor is a software company. One of Customer's IT employees comes on-site at Vendor's office for training in the use of Software Product A, for which Customer has purchased a license. b) Customer's employee sees that Vendor's trainer has a CD of Software Product B in her notebook, which is sitting on the desk at the front of the classroom. During a break, the Customer IT employee surreptitiously steals the CD and takes it back to his office. The employee's boss congratulates him and directs him to use (stolen) Software Product B in Customer's business. c) Another Customer employee calls up his contact at Vendor and blows the whistle. Vendor tries to work things out amicably, but the response from the thief's boss is "sue us." (Something not too different than this once happened at my former company.) d) The contract is for use of and training in Software Product A. It says nothing about theft of other software products. Where does "arising out of or relating to" fit here? This factual scenario arguably doesn't "arise out of" the contract, but arguably it is indeed "related to" it. If I'm representing Vendor, I might not mind litigating warranty claims about Software Product A in Customer's forum. On the other hand, I wouldn't want to be <em>forced</em> to litigate the theft of Software Product B in Customer's forum; I'd want the choice to be mine. There’s another possibility: In negotiating a forum-selection clause, you might be willing to have “arising under” matters litigated in the other side’s forum, while (quietly) leaving open that other matters might be litigated elsewhere. Here’s a hypothetical example:

a) Vendor is a software company. One of Customer’s IT employees comes on-site at Vendor’s office for training in the use of Software Product A, for which Customer has purchased a license.

b) Customer’s employee sees that Vendor’s trainer has a CD of Software Product B in her notebook, which is sitting on the desk at the front of the classroom. During a break, the Customer IT employee surreptitiously steals the CD and takes it back to his office. The employee’s boss congratulates him and directs him to use (stolen) Software Product B in Customer’s business.

c) Another Customer employee calls up his contact at Vendor and blows the whistle. Vendor tries to work things out amicably, but the response from the thief’s boss is “sue us.”

(Something not too different than this once happened at my former company.)

d) The contract is for use of and training in Software Product A. It says nothing about theft of other software products.

Where does “arising out of or relating to” fit here? This factual scenario arguably doesn’t “arise out of” the contract, but arguably it is indeed “related to” it.

If I’m representing Vendor, I might not mind litigating warranty claims about Software Product A in Customer’s forum. On the other hand, I wouldn’t want to be forced to litigate the theft of Software Product B in Customer’s forum; I’d want the choice to be mine.

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