A third-party beneficiary, in contract law, is a person who may have the right to sue on a contract, despite not having originally been a party to the contract.  Think, for example, of the homeowner who hires a contractor who then hires a subcontractor.  If the subcontractor fails to perform, under certain circumstances, the homeowner may be a third-party beneficiary of the subcontract between the contractor and the sub, and have the right to sue the sub directly.

In order to obtain that right, however, under Michigan law, the homeowner must be an intended beneficiary of the contract, as opposed to an incidental beneficiary.  A homeowner is an intended beneficiary only where there’s an express promise by the subcontractor to act for the benefit of the third party; and a subcontractor’s “awareness” that its work ultimately benefits a third party is not evidence that such subcontractor promised to perform its contractual obligations for such party.

The law is not merely limited to the construction industry and instead applies to any industry in which subcontractors are used (software, manufacturing, legal, etc.).  The net effect is to limit the liability of Michigan subcontracts and clarify exactly when they will be held liable to third parties.

A recent Court of Appeals case, however, stands to jeopardize this otherwise clear law.  More on that case and its potential effect on Michigan subcontractors tomorrow.

–Matt

Safford & Baker PLLC is pleased to be a sponsor of Ann Arbor’s first TECH cocktail event TONIGHT, Friday, March 27, 2009, starting at 6 p.m. at Live at PJ’s.  The event is being hosted by a2geeks (previously written about here).

Originated in Chicago, TECH cocktail is a community-building startup founded in May 2006 by Frank Gruber and Eric Olson (who will be in attendance).  TECH cocktail looks to help the Ann Arbor area and other technology communities like Chicago, Boston, Boulder, Champaign and DC amplify the technology signal while having fun doing it.  This TECH cocktail will offer a handful of startups an opportunity to showoff in an expo-style to the rest of the community.

RSVP here.

–Matt

Jake Sigal and his company Myine Electronics continue to receive positive buzz.  Check out this article from Great Lakes IT Report about the company’s new Internet radio.

–Matt

Just a friendly reminder of a couple of upcoming events this week.  I’ll be on the “Fair Use” panel.  I hope you can make it.

–Matt

FREE PANEL DISCUSSIONS

The Arts, Communications, Entertainment & Sports (“ACES”) Law Section of the State Bar of Michigan is co-hosting with the Ann Arbor Film Festival (“AAFF”) two free educational panels during the 47^th Ann Arbor Film Festival.

The “Michigan in Motion” panel discussion is taking place on Wednesday, March 25, 2009, from 1 – 2:30 p.m. at the WORK Gallery in Ann Arbor.  The new film tax incentives in Michigan created a national buzz in the past year, with Hollywood film projects receiving much of the attention.  But what do the film tax incentives mean for the independent filmmaker and new media artist?  Who qualifies, and what projects benefit most?  Are the incentives working as intended and what’s their future?  This panel serves to provide an insider’s guide for independent filmmakers from several of Michigan’s experts in the field, including tax specialist Julie May and attorneys and ACES members Howard Hertz and Ethan Bordman.

The “Remixing the Rules” panel discussion is taking place on Thursday, March 26, 2009, from 1 – 2:30 p.m. also at the WORK Gallery in Ann Arbor.  One of the most critical and ongoing debates in the global entertainment industry is the battle over fair use rights and copyright law in the arts.  Whether music, film, new media or beyond, this issue does not just affect these industries, it is redefining the entertainment world as we know it.  Join us for an animated and educational discussion on copyright law, fair use, and infringement; where our panel members considers the current state of copyright law, whether it is compatible with the growing movement of remix art and culture, and whether it is serving or stifling the very creativity it is supposed to foster. Panelists include sample-based filmmaking legend Craig Baldwin, Negativland founding member Mark Hosler, and copyright attorneys and ACES members Larry Jordan and Matt Bower.

Both panels are free and open to the public as part of the commitments of the AAFF and ACES to educational outreach.  The WORK Gallery is an exhibition space provided by the U-M School of Art & Design, and is located at 306 S. State Street, Ann Arbor.

About the Ann Arbor Film Festival

The Ann Arbor Film Festival is internationally recognized as a premiere showcase for creative, inspiring, and influential films of all types: avant-garde and experimental, story-based narratives, documentaries, and animation. As the longest-running film festival of its kind in North America, the AAFF is steeped in a rich tradition of ground-breaking cinema. Thousands of influential filmmakers have showcased early work at the AAFF, including luminaries such as Kenneth Anger, Agnes Varda, Andy Warhol, Yoko Ono, Gus Van Sant, Barbara Hammer, Lawrence Kasdan, and George Lucas. The 47^th Ann Arbor Film Festival takes place March 24 – 29^th, 2009.

About the ACES Law Section of the State Bar

For thirty years the Arts, Communications, Entertainment & Sports Law Section and its members have helped thousands of artists and entertainers by participating in and supporting the cultural organizations and activities of the arts, communications, entertainment and sports industries of Michigan.  ACES supports these industries through partnerships, seminars, public service programs, advocacy, and publications, as well as through fostering and developing the professional skills and knowledge of its members.  Membership in the ACES is open to all members of the State Bar of Michigan.

The so-called “notice-and-takedown” procedure in the Digital Millennium Copyright Act of 1998 (the “DMCA”) – previously referenced here and here – provides copyright holders with the means to remove allegedly infringing material from websites.  When users post such material, the copyright holder provides notice to the website operator, and the operator is charged with the taking it down.  Increasingly, however, the users posting these materials are fighting back when takedown notices are used illegally.

In a recent case, the animal rights group Showing Animals Respect & Kindness (aka SHARK) shot video footage of a rodeo which depicted, according to SHARK, animal abuse.  SHARK then posted the footage to its YouTube channel accompanied with provocative commentary and as part of a fund raising drive.  The Professional Rodeo Cowboys Association, the organizer of the rodeo, sent YouTube a DMCA takedown notice claiming that the clips infringed their copyright because SHARK was not authorized to shoot the event.  There is one problem with that claim: live sporting events, such as rodeos, are not copyrightable.  SHARK complained, YouTube put its channel back up, and then SHARK sued the Rodeo Association for abuse of the DMCA.  In the end, the Association agreed to pay SHARK $25,000 for the wrongful takedown notice.

–Matt