Problem 12: Territory, Taxes, Governing law, and Dispute
Contair has decided to license air bag technology incorporated
into the Estrella for use in new airplane seats. The seats include
a cushioning device that inflates upon impact, much like the air bags that
inflate to cushion the impact of a car accident. The device inflates
an air bag in 0.02 seconds. No other device on the market can inflate
an air bag at that speed. Contair has successfully obtained letters
patent for the device in the United States, Japan, and most western European
AirVan, a consortium of Asian airplane manufacturers, has approached Contair
and offered to license the inflation device. Counsel for AirVan has
drafted the following contract language for a portion of their proffered
license agreement. As counsel for Contair, provide substantive comments
and suggested amendments that Contair should consider before executing the
A. The territory of this Agreement shall be the world.
B. Contair Corporation shall be responsible for any and all filings
with any governmental agencies necessary to make this a valid license
C. Contair Corporation shall pay all taxes that may be assessed
by any governmental body on royalties payable under this Agreement.
D. The laws of the Country of France shall govern the creation and performance
of this agreement.
E. Disputes that may arise out of the performance of this Agreement shall
be settled amicably among the parties hereto.
Back to Top