Observing Contract Deadlines—A Cautionary Tale Involving FaceTime Communications and Reuters

In this post on his Goldman’s Observations blog, Eric Goldman describes a dispute between FaceTime Communications and Reuters.

Reuters licensed FaceTime’s software for two years and devoted significant resources to customizing the software. Reuters had an option to pay $150,000 for a perpetual license, but for reasons that aren’t entirely explained, Reuters didn’t exercise the option before the deadline, namely the end of the two-year term. Instead, Reuters tried to exercise the option after the deadline. The parties ended up in court, and as its recent opinion makes clear, the Southern District of New York was unsympathetic to Reuters’ attempt to avoid the consequences of missing the deadline.

Eric suggests that Reuters will get to keep using the software if it really wants to, but at a steeper price.

About the author

Ken Adams is the leading authority on how to say clearly whatever you want to say in a contract. He’s author of A Manual of Style for Contract Drafting, and he offers online and in-person training around the world. He’s also chief content officer of LegalSifter, Inc., a company that combines artificial intelligence and expertise to assist with review of contracts.