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10.7.1: 'Market' or 'Industry Standard' Deal - Terms and Frequency of Appearance
Contributing Editor: Marco V. Masotti of Paul, Weiss, Rifkind, Wharton & Garrison
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Abstract
I have spent a number of years negotiating the terms of commingled, private equity venture capital and buyout investment vehicles. Distressingly, a large proportion of my time has been taken up debating whether a given provision is "market," or "industry standard," the notion being that the "market term should prevail". The goal of these debates is for one side to bully the opponent into admitting that the proponent's experience is more extensive. If the opponent concedes, the discussion is over. The problem is that discussions of this nature are often a dispute without end, as one party contests that a certain term is "standard", while the other side argues it isn't. Moreover, both sets of lawyers desperately want to win, regardless of the importance of the point, because a loss concedes that the other lawyer knows more. Out of a personal desire to derail...
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