Saturday, August 29, 2009

The making of contracts: common pitfalls you should avoid.

The law of contracts can be rather much of a conundrum to the ordinary person who merely wishes to create a binding agreement for the purpose of enterprise or to safeguard the rights and responsibilities of parties in the ordinary course of living. They are not alone since admittedly, it can become complex and perplexing to even the most senior practitioners of the law at times. This is not merely because it is in itself a complex area, but because of the seeming propensity of human beings to create from the simplest circumstances, convolutions which would confound the gods. It is hardly surprising therefore that so many persons end up in litigation with the hope that a neutral third party or judge will unravel their problems for them. In some instances it becomes necessary for there to be enforcement of a contract as ordered by the court where a party refuses to honour his part of the agreement, or where a clause is unclear as written and needs judicial opinion to declare its meaning. In addition further difficulties are caused when a party seeks to reserve all the benefit of an arrangement for himself and attempts to construct an agreement along those lines. Often such an individual may resort to trickery to attain those ends.
For example, if party A wishes to purchase a vehicle from party B and offers B a price which is below the market value of the vehicle, he may add as if it were some benefit, the offer of paying the necessary taxes to the Inland revenue department. B being ignorant of the relevant rate of taxation for such a transaction may well agree to such an arrangement only to realise later that he did not receive his worth. Some will argue that A merely executed good business sense and that B ought to have done his homework before agreeing to such a deal, others will call A a brass faced swindler. The law however, has as part of its requirements that each individual must be careful to be mindful of their business affairs, and so B having concluded that contract with A may well have to abide by the consequences since he made the contract of his own free will without any illegalities being attached to the circumstances of its making. Imagine what happens when two or more parties try to outdo each other.
Simple contracts very often find themselves subject to dispute and the more complex ones such as partnership agreements even more so simply because there may not be strict adherence to a few commonsense rules which normally can aid those wishing to get involved in the making of a contract. I must first advise that an agreement between two or more persons does not constitute a binding contract until certain other conditions are fulfilled, though an agreement in some instances can be binding. I will deal with the law of contract in some detail in another article which will explain some of the intricacies in plain language and the statements made above.
One pitfall in making a contact is uncertainty or complete ignorance about what you are getting. As in the example above B was either plain careless as to the details of the transaction or he did not mind the amount he was to be paid for the vehicle. If you are the one proposing the contract since you wish to acquire goods or services, determine how much you are willing to pay and leave room for negotiations. If you are getting involved with a standard form contract such as on for utilities or services ask the question, are there any ancillary responsibilities attached? For example, will I be required to pay monthly bills or installments, is there any interest attached, if so how much?
Next ask the question, what are the seller’s or service provider’s responsibilities to me? Should my equipment become defective or cease to function, who pays for the repairs or the replacement?
Equally important, is the issue of ending a contract, since many service providers attach a fee or require notice which ends up with the consumer paying in some way for their desire to discontinue their association with a company or provider.
Individuals in private agreements who wish to avoid a contract or to discontinue their associations may also face significant legal challenges which the contract does not make provision for its termination, discontinuance and more importantly, the settlements of disputes which may arise during its execution. The next question to ask therefore is, should I wish to get out of this how can I escape and what would it cost me if anything?
There may also be times when an individual may wish to change or vary the terms of the contract and may wonder about the formalities of so doing. I will advise that trying to type over, write over or ‘running it by the other party while he was high’ is not the way to do it if you wish to stay out of prison or lose your interest under the contract! Such a variation must be made with the consent of the other party, and both need to be clear as to what it is that is being agreed upon.
Finally if you are writing the contract yourself use simple language and do not attempt to mimic the style found in legal documents, in short leave out the shall heretofore, theretofore, situate and other supposedly legalistic sounding terms, they simply confuse the issue and can be a general nuisance to the legal practitioners who are sore put upon to interpret the meaning of words which can create unnecessary and harmful nuances. Always review your agreements with the intention of keeping them clear and simple. Try to understand your rights and responsibilities in relation to the arrangements and that of the other party and to remember that dishonesty and or absolute self interest will usually cause your contractual arrangements to fail. If you are in business customers will leave , if it is a private contact it may be avoided on a number of grounds leaving you in some instances worse off than you were prior to its making. For complex agreements always consult a qualified professional so that you may get the most from your contractual arrangements.

Sunday, August 2, 2009

Balancing the interests in Intellectual Property Law; possible solutions to the Guyanese dilemma.

The issue of copyright infringement of written materials, music and performances is seemingly an everyday occurrence in Guyana, of which illegality ,notice is taken sporadically by the public when a specific complaint is made by a group, company or an individual seeking to protect their investment .At any other time it becomes a non issue in the face of the inadequacy of the law (both legislation and enforcement)to address the problem; this coupled with the lack of any properly organised focus group on intellectual property rights at both the legislative and the civil society levels, creates the environment most suitable for bootlegging to flourish and to expand by principle to other areas of endeavour ,as may be found in the example of the internet telephony issue which now occupies a place in the current newspapers. The issues of the infringement of patents, trademarks and passing off also regularly engage the attention of legal practitioners and the courts in which they may become caught in the snag of the now legendary backlog of cases, because of technical legal or administrative reasons.

The legal intricacies of the subject area which are useful and necessary for proper academic discourse, such as the Jurisprudence of Intellectual Property Law ,are considered to be cumbersome for the purposes of this short exposition which seeks to highlight the pertinent issues and to make some proposals as to how they may be addressed ,in a manner which might be appreciated by all interested parties. Reference will be made to case law and legislation as necessary.
It is a truism that law in society can only function effectively where there is a suitable balance between the interests of the citizens and the requirements at law, and that such a balance may only be attained by careful consideration of the contemporary challenges and requisites for living in that society along with the rules which must be applied in order that there should be regularity, and order .A reasonable level of contentment coming from a perception that justice is regularly satisfied is part of the reward of such a carefully considered application of seemingly commonsense principles; but which is scarcely the approach taken by legislators who seem as part of an historical attitude in some parts of the world, to adhere to the most pedantic and unproductive methods of creating rules which can fit the times and which may have some longevity in the regulation of society. The issue of legislation in relation to copyright ,patents and trademarks remains a sore issue in Guyana because it has not been properly addressed in a detailed and aggressive manner which includes the balance of the society’s interests. Such planned legislation must of necessity be subject to continuous assessment by a committee which will examine all of the aspects of modern Intellectual Property Law including the progressive use of Alternative Dispute Resolution as an inevitable part of an effective, modern system of justice dispensation.
There is little doubt that some areas of Intellectual Property Law continue to baffle lawyers who can struggle to find clear legal solutions to some issues and who are sometimes put to task to inform their clients as to this state of affairs. This is quite common in cases where a product or service is designed to piggyback on their client’s reputation and which would seem to be a clear case of passing off or registered trade mark infringement .As fantastical sounding as these legal malfeasance may be ,the most recognised method of dealing with this problem does not fall to any specific remedy in the legislation but must be dealt with through passing off in Tort, which is itself a common law remedy and which requires the test of look and feel. In these circumstances it is not unusual that the competitor will have made the product sufficiently different in these areas to avoid the clutches of the passing off remedy in Tort or Trade mark infringement and so may skip merrily away to continue the wrongdoing. Additional effective arguments may be made by the copycat to the effect that the brand name and other features make it distinctive from the complainant’s. Guyana does not have any recent Trademark legislation which may guide any infringement of trademarks in our modern circumstances and so a suitable reference for this discussion is found in the Trade Marks Act of 1994 of England. This Act allows for the registration of a trademark to include names, slogans and also inter alia, shapes and packaging, giving the brand name owner the opportunity to register the product packaging as a whole. The difficulty with this comes in the constant changes which will occur in packaging as response to the challenges of competition in both the local and global marketplace since the brand name owner may not find it either feasible or possible to continuously register the changes to the product’s packaging. The same issue may arise in reference to design protection. Where the question of a lookalike product arises the courts will apply the test which requires the claimant to establish a likelihood of confusion in assessment of trademark infringement, this requirement may be found at section 10(2) of the Trade Marks Act of 1994. This confusion may be held to include a likelihood of association but the case law in this area has also demonstrated the need to establish more than a mere “bringing to mind of the registered mark” as per Wagamama Limited v City Centre Restaurants [1995] PSR 715. Further, the test as to whether confusion has occurred is set down by the European Court of Justice (ECJ) as per Case C-2511/95 Sabel BV v Puma AG [1998] European Trade Marks Report 1. It was here established that a global assessment is required of all the relevant factors inclusive of the similarity of the marks, the goods and of the likelihood of confusion. It can be concluded that trademark registration is often of little assistance in the typical lookalike case since they almost always involve ‘initial interest confusion’ or /and cues or subliminal messages. While the so called infringing product may send the customer the message that it is as good as the Branded product, this alone will serve to satisfy the section 10 (2)test of the 1994 Act. The United Kingdom is however, afforded some relief from the inadequacies of the law by the effective Unfair Commercial Practices Directive(Dir 2005/29/EC) ,implemented in December of 2007 which seeks to regulate matters concerning unfair business to consumer commercial practices in the internal market. This Directive provides wider and more principled protection against the manufacture and sale of lookalike products than does the common law of passing off in England and is allied to the relief currently allowed for trademark and design infringement. The Directive also seeks to make competition fairer, protect consumers and to harmonize the existing remedies under national law.
It is these principles coming from the EC Directive and which will combine with remedies and provisions of the 1994 Act which need to be adopted for the development of effective legislation in the areas of Commercial Practice Guyana, which will also need to cover patents and copyright infringement. At all times it will be necessary to consider the current needs and peculiarities of the Guyanese society and to develop some foresight as to the future developments in commercial law Caribbean wide and globally .This is especially important with the growth of ecommerce which will eventually take root in our corner of the world and for which we are woefully unprepared ,as there is no legal regulatory system in place to deal with ecommerce in Guyana. Across the Caribbean the situation is little better, being non-existent in some territories and of a piecemeal constitution in others.
Of immense importance in the development of legislation which will address this area of the law is the incorporation of Alternative Dispute Resolution as an integral means of resolving disputes related to Intellectual Property Rights alongside of and perhaps in preference to litigation. This is a useful mechanism which provides for the use of mediation and arbitration as fast , cost effective , and less painful methods of solving problems ;and which are used successfully in the United kingdom and The United States of America to resolve issues in every sphere of civil law with huge degrees of success. The mediation project of the Supreme Court of Guyana, may work over time to assist in the resolution of disputes within the general Civil law system, but without the use of arbitration as an integral part of the work of the Commercial Court and as an effective means of dispensing with the backlog of civil cases there is likely to remain considerable frustration and disillusionment with the delivery of justice.
The development of suitable legislation on Intellectual Property rights must therefore take place as a combined effort of academia, practitioners and all persons who hold an interest in the subject by use or production of materials which may have some form of Intellectual property rights attached to them. It is certainly to be hoped that academia will be invited to engage in any future process far more than has obtained in the past, so that our society may benefit from dedicated intellectual resources in this area.