Page 20: of Marine News Magazine (June 2011)

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20 MN June 2011

LEGAL the conduct of the parties and any previously exchanged offers, emails, or other documents are not to be considered as terms of the agree- ment. In the negotiation process, the parties usually exchange several rounds of offers and counteroffers while ironing out the terms of the agreement. Once the agreement is signed, all of these previous agree- ments should be cancelled as if they never occurred. Often, if a dispute about the terms of the MSA arises, someone will produce a document that indicated that the term should not have been included, or otherwise modified prior to execution.

However, if you include a proper provision, the parties will be deemed to be aware of the terms of the doc- ument they signed and the parties must govern themselves accordingly.

Another area that we often recom- mend adding language relates to an award of attorneys’ fees that incurred while requesting defense and indem- nity. The general maritime law allows for the reimbursement of the attorneys’ fees expended in defend- ing the claim filed by an injured worker, if the MSA included an obli- gation to defend. However, the gen- eral maritime law does not allow for the recovery of the attorneys’ fees expended in pursuing the defense and indemnity claim. Thus, unless you have a specific provision that covers this area, the party that you request defense and indemnity from does not have any real incentive to quickly evaluate your tender. Adding language providing for the reim- bursement of these fees increases the likelihood of recovering all of your fees and has the added benefit of putting pressure on the other side to fairly evaluate your tender.

Considering the importance of entering into an agreement that ade- quately portrays the company’s intentions, as well as protecting each company’s interest in the event of a dispute, great care should be put into ensuring that MSAs are entered into when appropriate and that each agreement includes the terms neces- sary for the successful management of the service to be provided. A little time spent coordinating the execu- tion of MSAs and reviewing existing

MSAs to make sure they are ade- quate can save you a lot of time and expense in the event that a dispute arises. For example, the specific lan- guage used in an indemnity agree- ment could be enforceable or not enforceable under the general mar- itime law, or different state laws. So, it is a good idea to have someone knowledgeable about the terms of

MSAs review these documents, on an ongoing basis, with an eye towards what is customary, reason- able and enforceable. Allocating resources to this task may save you significant time and money by avoiding a future dispute.

Office: 337-237-5011

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