13 April 2022
IBM recently lost a case in England arising out of a failed IT system supply contract for its customer CIS General Insurance Limited ("CISGIL"). The facts are long and tedious. However, the decision came down to an analysis of the exclusion clause in the contract.
On CISGIL's view of the clause, it was entitled to £96 million in damages. On IBM's view, the amount due could be no more than £16 million. A difference of approximately $140,000,000.
The relevant exclusion of liability clause prevented CISGIL from claiming for lost profits. However, CISGIL based its claim on "wasted expenditure" instead. IBM argued that the claim for wasted expenditure was excluded by the lost profits exclusion.
The trial Judge agreed with IBM. The UK Court of Appeal last month agreed with CISGIL and held that to exclude wasted expenditure in this context those words should have been used expressly. They were not and so IBM was liable for an extra£80 million damage, or approximately $70,000,000 for each of the two words omitted. IBM has indicated that it might appeal the decision. Watch this space!
Australian law on the interpretation of exclusion clauses is slightly different to the UK law in this area. However, whatever those differences might mean in other circumstances, one thing is for certain. A supplier under an IT services contract (or any other contract, for that matter) should always think carefully about what type of damage the customer might suffer if things go badly, and ensure those losses are dealt with expressly in the relevant exclusion clause. Suppliers should never have to rely on vague terms such as "indirect or consequential loss" in order to protect their interests.
In this case IBM's exposure would have been much reduced if only they had added the words "wasted expenditure" in their supply contract. This is the type of omission that ContractProbe will detect in under a minute.
The question is no longer whether you can afford to use ContractProbe in your business, but whether you can afford not to use it.
30 March 2022
Law Society of NSW FLIP Tech Tools Presentation: See how ContractProbe can help lawyers to decrease risk when reviewing contracts, as well as increasing their productivity and reducing drudgery by performing essential checks in under 60 seconds.
29 March 2022
In this webinar Michael Pattison from ContractProbe discusses the tricks and traps in the terms. He demonstrates how AI can help streamline preparing the contractual response to a Request For Tender.
21 February 2022
“Michael Pattison presented at a session organised by Centre for Legal Innovation on What's trending, What's driving legaltech development around the world.
15 February 2022
Many companies operating in the gig economy engage their staff as contractors to avoid the costs associated with employment. A common practice is to use the word ‘contractor’liberally in such contracts and rely on that to avoid an employment relationship. That will no longer work following a High Court decision last week. The decision affects companies in the gig economy but also any other company wanting to engage staff as contractors, rather than employees, in Australia.
Under the High Court decision, companies need to look closely at the words of their contracts to decide whether they create an employment relationship, no matter what terms the parties used to describe that relationship.
Time to check if your engagement contracts are fit for purpose? Machine learning tools such as ContractProbe can help companies and their lawyers work out whether their contracts are properly engaging their staff. Contact us to find out how.
30 September 2021
This popular presentation demonstrated ContractProbe's flexibility in dealing with unique requirements from customers.
29 April 2021
Our Microsoft Word tool was demonstrated at the Australian Legal Technology Association's Hour of Power. The video can be viewed here:
24 March 2021
Watch as our founder, Michael Pattison, uses ContractProbe to dissect the new Commonwealth Contract terms commonly used by the Federal Government. The full video is available here:
11 December 2019
A few months ago, Michael Jackson's former producer, Optimum Productions, sued HBO for airing Leaving Neverland, which Optimum alleged breached their 1992 licensing agreement preventing HBO from making "disparaging remarks concerning" Jackson. As the agreement did not contain an exclusive jurisdiction clause, the parties have spent months (and no doubt huge amounts of legal fees) litigating whether the dispute had to go to arbitration. Sometimes you will want a Court or arbitrator to have exclusive jurisdiction. Sometimes you will want non-exclusive jurisdiction. However, you should never leave this important issue unclear.You can make sure your contract does not miss important issues like this by running them through ContractProbe before they are signed and saving your company millions in avoidable litigation costs within seconds!
06 June 2019
The choice of law and choice of forum clauses are often tucked away in the part of the contract that no one ever reads. But they can matter, a lot. Ask Kanye West. In January this year, he sued EMI over his 2003 recording contract, claiming it was no longer valid under a California law limiting the term of contracts for ‘personal services’. EMI counter-sued for breach of contract, claiming that West’s choice to file in California was a ‘flagrant attempt to forum shop his way around the exclusive New York forum selection clause’. If West had used ContractProbe before he signed on the dotted line he would have been told about the exclusive jurisdiction clause while he still had an opportunity to get it changed.
18 March 2019
Australia has recently passed laws that are intended to make it easier for security and police authorities to gain access to encrypted messages. ContractProbe founder Michael Pattison was pleased to participate in a forum last night to discuss their impact. Great to have input from both legal and technical people at the event; it made for a much more informed discussion. In short, the laws are draconian in approach but might not achieve the aims the Government intended.The full discussion can be viewed for a limited time here.
26 February 2019
Contracts with a choice of law clause but no jurisdiction provision are surprisingly common. In the recent case of Abdou v Mahany (2019), an action to regain legal fees was moved from Wisconsin to New York against the plaintiff's preference. The plaintiff's argument that the relevant choice of law clause was "tantamount" to a choice of forum clause was quickly and clearly dismissed. You can make sure that your contracts include BOTH these important matters by using ContractProbe to check your contracts before they are signed.
26 January 2019
Watch out what contracts you or your clients sign. Don`t include "Unfair terms". "Sole traders" are actually in the scope of the Australian Consumer Laws. So your "Standard-form contracts" must be compliant with the unfair contract terms regime.In other words, watch out: the consumer laws give enforcement powers to both parties the ability to issue and seek orders requiring a supplier to provide redress. Scan your Consulting Contracts with ContractProbe or learn how to determine whether a term in the contract is unfair here.
14 December 2017
Best of 2017 Edition – your top 10 #Lawtech startups (ranked by click through) across 45 issues this year 🏆
№ 1. ContractProbe: Review a contract in
WWW.CONTRACTPROBE.COM – Share
One of the first two startups backed by the Mills Oakley accelerator, this tool will flag issues and quality-score your contract in jiffy. According to creator, ex-Allens partner, Michael Pattison: “This kills the billable hour dead.”
№ 2. Heureka: A Clear View Into Your Unstructured data
WWW.HEUREKASOFTWARE.COM – Share
Heúreka “I have found it!” Or so they say. This platform gives you the ability to extract intelligence from dark data, for legal, regulatory, compliance and cybersecurity applications.
№ 3. Midasium: A Prototype of a Smart Tenancy Contract
MIDASIUM.HEROKUAPP.COM – Share
An Ethereum smart contract prototype, built to interface with Citibank’s payment API - here’s their demo at the Citibank Mobile Challenge Final in Sydney back in late 2015. This needs to exist.
30 May 2017
Australia's 10th-largest law firm Mills Oakley has revealed the first two start-ups it will support through its $500,000 accelerator program, with the founder of one a former 21-year Allens partner who claims his robot will "kill the billable hour dead".
Mills Oakley chief executive John Nerurker flagged last year that up to six start-ups would enter the first intake of the program, which it is paying Melbourne-based innovation consultancy Collective Campus to run.
Only two of 35 applicants were deemed to have products sufficiently advanced and commercially viable to test on Mills Oakley lawyers, with the firm taking a 7 per cent equity stake in each.
One is Speak To Scout, the Brisbane-based builder of a "chatbot" claiming to give personalised legal guidance to consumers researching online. Mr Nerurker said an obvious application of the product was as a referrer for migration law advice, or it could be customised for in-house legal counsel to help them find and instruct external legal providers.
The other is ContractProbe, an automator of contract reviews developed by Michael Pattison, a technology lawyer at Allens for 31 years (21 of them as a partner) until last May, when he decided "now or never" and took the leap into entrepreneurship.
Contract review automation is already a competitive field, with global players like Kira Systems getting installed by Australian firms like DLA Piper, however Mr Pattison claimed his product was different.
"There's plenty of systems that will help you draft a contract, ContractProbe comes into its own when you receive a copy of a contract as part of a negotiation," he told The Australian Financial Review.
Learning from new contracts
ContractProbe has been "trained" on thousands of executed non-disclosure agreements, consultancy agreements, employment agreements and technology licences. However Mr Pattison, who has a Masters in Computer Science from RMIT, claimed it also has an artificial intelligence "front-end" capable of learning from new contracts it processes, so that it is able to identify missing clauses or clauses that are unusual.
The ContractProbe booth had an eye-catching inflatable boxing kangaroo and Cherry Ripe candy, a nod to their Australian origins. But what caught our eye were these stress balls in the shape of a brain, perfect for the parent company of the product, Neural Contract Company. The Pitch: “ContractProbe will cut down substantially the length of time you have to spend on reviewing a contract. ContractProbe will also make your work easier. No one likes proofreading documents for the types of errors that ContractProbe picks up. ContractProbe takes that weight off your shoulders and allows you to decide simply whether you’re concerned about a particular problem or not. Finally, ContractProbe reduces the risks of missing important clauses in contracts.”
We are happy to talk about new features which can make your work easier. Get in touch for a demonstration now