CAPAP 2024 Legal Training PDF

Legal Training CAPAP 2024 Theory Phase I July 19, 2024, 2 pm - 5 pm Restricted | © Siemens 2024 | MGG | LC RC-SG | 2024-07-19 Restricted | © Siemens 2021 | Author | Department | YYYY-MM-DD  1. Introduction Pract...

Legal Training CAPAP 2024 Theory Phase I July 19, 2024, 2 pm - 5 pm Restricted | © Siemens 2024 | MGG | LC RC-SG | 2024-07-19 Restricted | © Siemens 2021 | Author | Department | YYYY-MM-DD  1. Introduction Practical Exercises: 2. Legal Tools and Resources NDA 3. 5 Sales Contracting Principles Sales Contract 4. Conclusion Page 3 Restricted | © Siemens 2024 | MGG | LC RC-SG | 2024-07-19 1. Introduction Legal Training State Law Legal System Lex Mercatoria Focus: Contract Law Page 4 Restricted | © Siemens 2024 | MGG | LC RC-SG | 2024-07-19 1. Introduction Two Main Types of Legal Systems: Civil Law Common Law Page 5 Restricted | © Siemens 2024 | MGG | LC RC-SG | 2024-07-19  Two Main Types of Legal Systems Civil Law Common Law Origin in Holy Roman Empire Origin in 12th Century England Common in Continental Europe and its Common in English-speaking countries colonies and former British colonies Bound by statutes Generally bound by statutes but judges create new law: common law Inquisitorial – Judge as expert Adversarial – Judge as arbiter Many provisions are implied into the Few provisions are implied into the contract by law contract by law Page 6 Restricted | © Siemens 2024 | MGG | LC RC-SG | 2024-07-19 1. Introduction What is your country’s legal system? Page 7 Restricted | © Siemens 2024 | MGG | LC RC-SG | 2024-07-19  1. Introduction Practical Exercises: 2. Legal Tools and Resources NDA 3. 5 Sales Contracting Principles Sales Contract 4. Conclusion Page 8 Restricted | © Siemens 2024 | MGG | LC RC-SG | 2022-07-19 2. Legal Tools and Resources Have you met LISA? Page 9 Restricted | © Siemens 2024 | MGG | LC RC-SG | 2024-07-19 LISA is your digital one-stop-shop for Legal and Compliance-related content Search function Browsing content Browse Legal and Search in Corporate Legal Compliance Topics, Tools, and Compliance specific Contacts and more sources only Ranking according to best fit regarding searched term Smart Answers Handbooks: Over 1000 manually inserted Legal, CO, Documents: ICP LKB, Find it questions and answers LC Intranet Tools Videos Analytics for continuous Start here improvement lisa.siemens.com Restricted | © Siemens 2024 | Tour de LC and beyond | July 2024 2. Legal Tools and Resources My country’s legal system is … Quickguide – Overview of applicable Legal Law Systems throughout the world Page 11 Restricted | © Siemens 2024 | MGG | LC RC-SG | 2024-07-19 Siemens AG Legal Handbook A. Project Preparation B. The Contract C. Risk and Opportunity Management Page 12 Restricted | © Siemens 2024 | MGG | LC RC-SG | 2024-07-19 Siemens AG Legal Handbook A. Project Preparation I. Initial Questions II. Tender (Bid) Phase and Process Page 13 Restricted | © Siemens 2024 | MGG | LC RC-SG | 2024-07-19 Practical Exercise: Project Preparation NDA Customer wants to sign an NDA. Non-Disclosure Agreement, aka Confidentiality Agreement Prior to achieving agreement, the parties usually need to exchange commercial and technical information which enables them to assess the feasibility of the intended business relationship. Siemens Standard NDA Define purpose. Page 14 Restricted | © Siemens 2024 | MGG | LC RC-SG | 2024-07-19 Practical Exercise: Project Preparation NDA Customer sends you an NDA for acceptance. Review Customer’s NDA Checklist for reviewing NDAs (“14 helpers”) Page 15 Restricted | © Siemens 2024 | MGG | LC RC-SG | 2024-07-19 Project Preparation NDA review - 14 helpers 1. Types of NDAs 7. Contractual Penalty for Breach of 2. Marking the Confidential Confidentiality Information 8. Other Liabilities 3. List of Exceptions to Confidential 9. Intellectual Property Rights (including Know-How) Information 10. Non-Solicitation Clause 4. Permitted Recipients -- Inclusion of Noncontracting Parties 11. Contract Term and Term of 5. Return or Destruction of Routine Confidentiality 12. Choice of Law Back-up Copies 6. Liability for Correctness of 13. Dispute Resolution; Language of Confidential Information the Contract 14. Signatures Page 16 Restricted | © Siemens 2024 | MGG | LC RC-SG | 2024-07-19 Siemens AG Legal Handbook B. The Contract I. Contract Formation and Elements of Contract II. Scope of Work, Parties Obligations, Responsibilities and Risk Allocation III. Pricing and Payment, Payment Securities IV. Subcontracting, Sourcing V. Variations, Changes and Adjustments VI. Contract Program, Delay and Disruption Page 17 Restricted | © Siemens 2024 | MGG | LC RC-SG | 2024-07-19 Siemens AG Legal Handbook B. The Contract VII. Completion, Acceptance, Performance Guarantees VIII. Warranties, Defect Liability IX. Termination of Contract, Rescission X. Liability and Indemnification XI. Disputes, Dispute Resolution Page 18 Restricted | © Siemens 2024 | MGG | LC RC-SG | 2024-07-19 Siemens AG Legal Handbook B. The Contract I. Contract Formation and Elements of Contract Agreement: Parties must reach mutual agreement. Offer + Acceptance = Contract Intention: Parties must intend to create a contract on a specific lawful object. Consideration: Agreement must be supported by valuable consideration. Formalities: Any necessary formalities must be fulfilled. Page 19 Restricted | © Siemens 2024 | MGG | LC RC-SG | 2024-07-19 Practical Exercise: The Contract Source: https://intranet.legal- compliance.siemens.com/eLearning/legal/L egalWBT/EN/contract/#/id/5b61b5b6f3fb91 9428770bcc Page 20 Restricted | © Siemens 2024 | MGG | LC RC-SG | 2024-07-19 Practical Exercise: The Contract Source: https://intranet.legal- compliance.siemens.com/eLearning/legal/L egalWBT/EN/contract/#/id/5b61b5b6f3fb91 9428770bcc Page 21 Restricted | © Siemens 2024 | MGG | LC RC-SG | 2024-07-19 Practical Exercise: The Contract Source: https://intranet.legal- compliance.siemens.com/eLearning/legal/L egalWBT/EN/contract/#/id/5b61b5b6f3fb91 9428770bcc Page 22 Restricted | © Siemens 2024 | MGG | LC RC-SG | 2024-07-19 Practical Exercise: The Contract Sales Contract Customer wants to order from Siemens. Project (“Works”), Product (“Goods”), Service (“Services”) business Siemens Standard Terms and Conditions Page 23 Restricted | © Siemens 2024 | MGG | LC RC-SG | 2024-07-19 Practical Exercise: The Contract Sales Contract Customer sends you its Terms and Conditions for acceptance. Review Customer’s Terms and Conditions Checklist for review Limits of Authority (LoA) - the internal bid approval procedure for external customer projects Page 24 Restricted | © Siemens 2024 | MGG | LC RC-SG | 2024-07-19 Siemens AG Legal Handbook C. Risk and Opportunity Management I. Risk and Opportunity Management 1. Identification and Response to Risks 2. Recognizing and Driving Opportunities II. Contract Management 1. Contract Analysis 2. Contract Workshop III. Claim Management 1. Claim Strategy 2. Enforcement of Claims Towards Customer 3. Effective Protection Against Incoming Claims IV. Change Order Management 1. Change Orders Page 25 Restricted | © Siemens 2024 | MGG | LC RC-SG | 2024-07-19 Contract management along the project life cycle Project sales Project execution Contract Management up to Contract Management after contract signature contract signature ▪ analysing and commenting draft ▪ contract analysis contracts opportunities and risks ▪ initial risk management claim potential / procedures ▪ sub-contracts ▪ negotiating up to final contract draft drafting and contract signature controlling ▪ sub-contracts ▪ claim strategies – define & implement analysing back-to-back needs → term sheet project-specific requesting confirmation of term partner-specific sheet From PM Insights, 2016-11-15 Page 26  Contract management along the project life cycle Project sales Project execution ✓ Leverage to avoid or limit Risks ✓ Leverage to realize Opportunities The earlier a risk is identified, the better the risk can be controlled. Many risks can only be avoided prior to submission of the offer / contract signing. From PM Insights, 2016-11-15 Page 27 Foreign Legal System Page 28 Restricted | © Siemens 2024 | MGG | LC RC-SG | 2024-07-19  1. Introduction Practical Exercises: 2. Legal Tools and Resources NDA 3. 5 Sales Contracting Principles Sales Contract 4. Conclusion Page 29 Restricted | © Siemens 2024 | MGG | LC RC-SG | 2022-07-19 3. 5 Sales Contracting Principles 1. First and foremost, scope of work, price and payment must be clear. Core of any contract Any description of the scope must stand the test under any theory of law Scope needs to be precise, conclusive, and consistent Page 30 Restricted | © Siemens 2024 | MGG | LC RC-SG | 2024-07-19 Page 31  The α and the Ω - the definition of the scope of works in both directions - we and our customers „The most common cause of conflicts / disputes / claims is a poorly written and poorly defined scope of work section“ From PM Insights, 2016-11-15 Page 32 3. 5 Sales Contracting Principles 2. Liability must be reasonably limited. Liability: The responsibility for loss or damage that one party causes to another. This can occur either: Within a contractual relationship, by violating contractual obligations, or Outside of a contractual relationship, by violating mandatory laws (e.g., through crime or tort) Indemnity: A contractual obligation to assume liability for any losses that arise if a specified event occurs. Page 33 Restricted | © Siemens 2024 | MGG | LC RC-SG | 2024-07-19 3. 5 Sales Contracting Principles 2. Liability must be reasonably limited. In general… Cap overall liability to a specific amount, usually the contract price (liability cap) Exclude liability for indirect, special or consequential loss or damage (consequential loss disclaimer) Page 34 Restricted | © Siemens 2024 | MGG | LC RC-SG | 2024-07-19 3. 5 Sales Contracting Principles 2. Liability must be reasonably limited. Aim for a limitation of liability clause for all damages, penalties, claims for compensation and indemnities, regardless of the legal basis of the claims However, liability for some events cannot be limited according to law: death, personal injury, fraud or gross negligence Page 35 Restricted | © Siemens 2024 | MGG | LC RC-SG | 2024-07-19 3. 5 Sales Contracting Principles 2. Liability must be reasonably limited. a. Warranty or Defects Liability Benchmark to be fulfilled regarding the work Warranty scope (e.g., free from defects in material, workmanship, design) Always define and limit the warranty period in a contract Page 36 Restricted | © Siemens 2024 | MGG | LC RC-SG | 2024-07-19 3. 5 Sales Contracting Principles 2. Liability must be reasonably limited. Remedy in case of defect: rectification (e.g., repair, replacement) Contractor must have the choice of remedy Page 37 Restricted | © Siemens 2024 | MGG | LC RC-SG | 2024-07-19 3. 5 Sales Contracting Principles 2. Liability must be reasonably limited. b. Delay Delay liability must fall on the party who caused it Contractor’s liability for delay - Liquidated damages or contractual penalties - monetary consequences of a particular event occurring (e.g., failure to complete the works by the contracted completion or delivery date, failure of the works to achieve technical performance guarantees) Sole and exclusive remedy Page 38 Restricted | © Siemens 2024 | MGG | LC RC-SG | 2024-07-19 3. 5 Sales Contracting Principles 2. Liability must be reasonably limited. Liquidated Damages Contractual Penalties Aims to compensate for the loss likely Seeks to put pressure to fulfill to be suffered contractual obligations by penalizing Most civil law jurisdictions will in In most common law jurisdictions, general know and allow the principles contractual penalties are not of liquidated damages and contractual permissible penalties What is the sum agreed by the parties in the contract that represents an estimation of damages? Page 39 Restricted | © Siemens 2024 | MGG | LC RC-SG | 2024-07-18 3. 5 Sales Contracting Principles 2. Liability must be reasonably limited. How about delay by force majeure? Events which have an impact on the performance of a contract and which are generally: 1. external, 2. unforeseeable, 3. unavoidable for the party affected by them, and 4. which are not caused by, or attributable to, the other party Are force majeure events limited to acts of god or natural catastrophes? Page 40 Restricted | © Siemens 2024 | MGG | LC RC-SG | 2024-07-19 3. 5 Sales Contracting Principles 2. Liability must be reasonably limited. c. IPR Infringement Third party IPR infringement Customer: Indemnities against claims for IPR infringement Contractor: Conditions for undertaking liability for IPR infringement Sole and exclusive remedy Page 41 Restricted | © Siemens 2024 | MGG | LC RC-SG | 2024-07-19 3. 5 Sales Contracting Principles 3. No transfer of IPR ownership in general. IPR, Know-How, Software - intangible goods Retain IPR ownership In granting use rights: No exclusive rights Limit purpose Page 42 Restricted | © Siemens 2024 | MGG | LC RC-SG | 2024-07-19 3. 5 Sales Contracting Principles 4. Export control clause and reservation clause must be present. Transfer of works, hardware, software, technology, etc. Compliance with all applicable national and international export control regulations ECC Model Clauses for Sales Contracts Page 43 Restricted | © Siemens 2024 | MGG | LC RC-SG | 2024-07-19 3. 5 Sales Contracting Principles 5. Governing law and dispute resolution clause must be acceptable. Agree upon one governing law Agree upon an acceptable dispute resolution mechanism Alternative Dispute Resolution (ADR) Negotiation Mediation Arbitration Page 44 Restricted | © Siemens 2024 | MGG | LC RC-SG | 2024-07-19 3. 5 Sales Contracting Principles 5. Governing law and dispute resolution clause must be acceptable. Litigation or arbitration? Advantages of arbitration Autonomy of the parties Expertise of the arbitrator/s Privacy of the procedure Short-term hearing Page 45 Restricted | © Siemens 2024 | MGG | LC RC-SG | 2024-07-19 3. 5 Sales Contracting Principles 1. First and foremost, scope of work, price and payment must be clear. 2. Liability must be reasonably limited. a. Warranty b. Delay c. IPR Infringement 3. No transfer of IPR ownership in general. 4. Export control clause and reservation clause must be present. 5. Governing law and dispute resolution must be acceptable. Page 46 Restricted | © Siemens 2024 | MGG | LC RC-SG | 2024-07-19  1. Introduction Practical Exercises: 2. Legal Tools and Resources NDA 3. 5 Sales Contracting Principles Sales Contract 4. Conclusion Page 47 Restricted | © Siemens 2024 | MGG | LC RC-SG | 2022-07-19 4. Conclusion Double Trust Dilemma of Innovation To develop an innovation, the innovator must trust the investor not to steal his idea, and the investor must trust the innovator not to steal his capital. How do you make and keep promises? Page 48 Restricted | © Siemens 2024 | MGG | LC RC-SG | 2024-07-19  Thank you! Legal Training CAPAP 2024 Theory Phase I July 19, 2024, 2 pm - 5 pm Restricted | © Siemens 2024 | MGG | LC RC-SG | 2024-07-19 How to form a contract ? 1 Offer + 1 Acceptance = Contract Attention: Acceptance must be for the full offer, otherwise it turns into a counteroffer!!! Within the company, it should be in writing but verbal statements may already be binding! Treat Minutes of meeting like a contract and remember that silence may be a ‘yes’! Who wins the battle of forms? Offer according to Acceptance according Supplier‘s terms and to Customer‘s conditions procurement conditions Page 50 Restricted | © Siemens 2023 | Legal | July 2023  How to sign a contract ? Signatures: There are internal guidelines as well as legal requirements under the applicable law, as to who is authorized to sign offers and conclude contracts. General rule for Siemens: Always 2 signatures!! ARE 4168: RC-DE: Signature Guideline und Unterschriftsberechtigung und Competency Matrix ARE 4168 Geschäftsvorfalltabelle Page 51 Restricted | © Siemens 2023 | Legal | July 2023 Fundamental Contract Clauses Liability –Magic Cube – © Christian Porlein Differentiate according to: Intent Financial loss Gross Negligence Damage type Basis for liability Property damage Negligence Degree of negligence Personal injury Page 52 Restricted | © Siemens 2023 | Legal | July 2023