From Groucho to Aristotle: Understanding Technology Transactions

Groucho Marx: Now pay particular attention to this first clause, because it is most important. The party of the first part shall be known in this contract as the party of the first part. How do you like that, that’s pretty neat eh?

Chico Marx: No, that’s no good.

Groucho: Why? What’s the matter with it?

Chico: I don’t know. Let’s hear it again.

Groucho: So the party of the first part shall be known in the contract as the party of the first part.

Chico: Well it sounds a little better this time.

Groucho: Well it grows on you. Would you like to hear it once more?

Chico:  Just the first part.

Groucho: What do you mean, the party of the first part?

Chico: No, the first part of the party of the first part.

Groucho: All right. It says the first part of the party of the first part shall be known in this contract as the first part of the party of the first part—look, why should we quarrel about a thing like this, we’ll take it out, ok?

Chico: Yes. It’s too long anyhow. Now what have we got left?

So starts the contract negotiation scene from A Night at the Opera, and so started our workshop entitled A Legal Guide to Technology Transactions (see my earlier post) held on June 22 at Gray Plant Mooty. My fellow entreVIEW blogger, Karen Wenzel and I used the Marx Brothers to have some fun with key issues like limitations of liability, risk avoidance, source code, acceptance testing, warranties, and intellectual property rights, as well as to illustrate the many issues involved in the acquisition of complex technology and related agreements. The point was to make sure that when these agreements are negotiated they are easily understood, accurately reflect the business deal, and are reasonable in how they allocate risks and opportunities.

So after Groucho and Chico reduce their lengthy contract to just a few clauses that appear to capture the essence of the agreement they continue to parse through the agreement:

Chico: Hey wait, wait. What does this say here?

Groucho: Oh that? Oh that’s the usual clause. That is in every contract. That just says “If any of the parties participating in this contract are shown not to be in their right mind, the entire agreement is automatically nullified.”

Chico: Well, I don’t know.

Groucho: It’s all right, that’s in every contract. That’s what they call the sanity clause.

Chico: You can’t fool me, there ain’t no sanity clause.

Our workshop started with Groucho and ended with a quote from Aristotle—

“How many a dispute could have been deflated into a single paragraph if the disputants had dared to define their terms?”

Keep it simple. While it can be a challenge, given the lethal combo of technical and legal jargon in these types of agreements, the parties must focus on how to put together a written agreement that everyone (not just the lawyers and computer programmers) can understand.

If you missed our captivating performance, you can still get a free copy of A Legal Guide to Technology Transactions in hard copy or CD-ROM from Gray Plant Mooty or the Minnesota Department of Employment and Economic Development (DEED). You can also view and download a copy from either the Gray Plant Mooty web site or the DEED web site.

We were overwhelmed by the turnout at this event and may do a repeat performance. Let us know if you are interested in hearing the content (and getting a chance to see us don our Marx Brothers garb). We are also looking for topics for future workshops so let us know what issues are keeping you up at night or what you would simply like to learn more about. We might even put on a show…