What Legal Definition Does ASA Have?
What does ASA mean Legalese? ASA means "Arbitration Service Agreement." An agreement to arbitrate the resolution of a dispute arising under a policy which is administered by an entity other than the insurer. If the arbitration is to be binding, it also must comply with Insurance Code section 10089(i). Binding arbitration provisions are subject to limited judicial review. Nonbinding arbitration provisions are subject to civil jury trial rights and full judicial review of the arbitrators’ award.
In such arbitration clause, it is usual to denote the arbitration process, the location of the arbitration, who shall bear the cost of the arbitration, how many arbitrators, who chooses the arbitrators, a timetable for the arbitration and how the arbitration decision is documented .
One recent decision discussed whether arbitration was considered whole arbitration which would exhaust the "limits of liability" or whether arbitration was considered as falling below the whole arbitration provision and therefore not exhausting the "limits of liability."
Some suggest that an arbitration award is the "final determination of liability," whereas others suggest that even an arbitration decision has to be considered as less than the "total amount" of liability.
If the arbitration is for less than the total amount alleged in the complaint, then the amount of the arbitration award cannot serve to exhaust the policy "limits of liability."
An argument can be made in the case of a single claim, that the final award must exceed the limit to constitute an exhaustion, but in the case of multiple claims, an argument can be made that the exhaustion occurs when the liability for the aggregate claims exceeds the policy limits.
Legal Genesis of ASA
The origins of "ASA" within the legal systems of various jurisdictions are multi-faceted and have evolved over time. The term itself has been in use since at least the early 13th century, with early mentions appearing in canon law during the period of Gratian’s Decretum, culminating in a collection of papal statements. It was not until the 16th century that "ASA" was brought into civil law systems, where it was adopted primarily in connection with ecclesiastical law. It has long been understood as both a canonistic and an ecclesiastical judgement with respect to which there is no appeal, although by the late 19th century, some Continental legal systems had introduced an "opt-out" clause for internal church rulings.
Within common law jurisdictions, the concept of "ASA" has undergone several adaptations. For example, the English ecclesiastical courts have long been subject to appellate review by the courts of common law, or by special Lords’ commissions. This acceptance of judicial review provided a basis for the establishment of modern ecclesiastical courts with appellate functions. In US federal courts, on the other hand, it is understood that church groups select their own leaders and that their actions are prima facie valid. When such actions implicate civil law, courts presume deference to church judgment and apply a standard of rational basis review. The balance many courts have struck is to defer to the best ecclesiastical judgement within the bounds of a general standard of reasonable conduct.
In short, the historical development of ASA has exhibited a conscious evolution that has balanced ecclesiastical and civil understanding and precedent shifting based on the prevailing influence of church groups.
Some Common Uses of ASA in Law
The application of ASA is particularly relevant in the context of contractual agreements that rely on electronic or physical signature methods. For instance, if a corporation has a contract with an individual contractor, and that contract includes an arbitration clause, that clause will generally be enforceable, assuming that the company provided adequate notice of its existence and they both engaged in the process necessary to actually render it effective.
Parties sometimes enter contracts before their official execution, which is where the definition of ASA comes into play. People often think of "signing" as the final step in a contract. That’s not true; at least technically. In the context of a non-binding but enforceable memorandum of understanding (MOU) or letter of intent (LOI), an unsigned contract is valid unless either party specifies that it is not. How does this apply to digital contracts? Some companies send digital contracts to counterparties before they are promulgated. The agreement may be sent to the other party simply to gauge their interest, but that doesn’t mean that the document is not legally binding. The factual circumstances may imply otherwise, but if the company that sent the unsigned contract does not specify that the contract is not enforceable absent their signature, there is a good chance that ASA will apply in favor of its enforceability.
The most common forms of legal acceptance using ASA are email correspondence and e-signatures. Email correspondence is arguably the least secure form of binding acceptance, but courts have often found it valid if it can be proven that there was an objective intent to accept the offer. Emails, with their often-ambiguous language, become problematic when they are used in this manner, so the best practice is for companies to establish specific email correspondences for the sole purpose of contract formation.
E-signatures, on the other hand, are more consistent in their use, but less secure in their deployment. Through multiple standards (most notably the Uniform Electronic Transactions Act), e-signatures have become a staple in the e-business climate, but they are seldom used as a single form of consent; rather, they often complement more secure technologies like unique passwords, encryption and (occasionally) biometric information.
Although courts have not expressly required a two-factor authentication process for simple e-signature contracts, cases have effectively validated this system as the "best practice" for e-signature acceptance. Courts have often found other forms of acceptance, beyond a signed contract, sufficient to constitute a binding contract. For example, the U.S. Court of Appeals for the Sixth Circuit determined in Signature Management Inc. v. Ky. Lesbian & Gay Fun Tours, LLC, that the acceptance of new terms when signing onto a website constitutes valid acceptance, even when not made clear in the original contract.
Although the use of ASA varies from one jurisdiction to another and from one contract to the next, the general consensus is that an electronic contract or a digital signature is given the same legal weight as if it were a wet signature on a document.
Legal Implications of ASA
The inclusion of an ASA clause in a contract can have significant implications for the parties involved. It can limit or expand the circumstances under which one party’s obligations to the other will be suspended. If such a clause states that a force majeure event will suspend a party’s performance obligations, this might include the payment of fees due. If the event persists beyond an agreed limitation period, e.g., the duration of a "PD Day" that a party is entitled to call, the defaulting party ("Party A") could then potentially terminate the contract under the terms of the clause. If terminated, Party A may be entitled to rely on a significant and potentially contentious limitation of liability provision contained in the same agreement.
Whether, practically speaking, Party A is likely to preserve its contractual rights or elect to waive them and shoulders any resultant loss itself would depend in large part on the nature of the affected force majeure event and the potential economic impact of such an event. Some companies may take the view that it is more efficient to put up with an adverse economic impact and continue to perform under the contract. However, in certain industries an adverse impact on cash flow as a result of a force majeure event could itself trigger a default of one type or another, e.g., a rating downgrade, a cross-default or an enforcement event. In such cases, Party A may have no choice but to rely on its rights under the ASA provision of the agreement, regardless of whether a more sensible business decision would be to absorb the loss.
Legal Landscape of ASA and Jurisdictions
An examination of ASA across the world reveals that the legal meaning and application of terms or phrases containing a reference to ASA, are not universal but instead vary significantly between legal systems and jurisdictions. While the substance of ASA definitions in some jurisdictions overlap, frequently there are significant differences in the context in which the terms or phrases are used.
For example, Administrative Adjudication in some common law jurisdictions is primarily governed by constitutional and statutory provisions in each country and the Substantive Reviews of the conduct of Administrators follows the rules of evidence as required by the Administrative Procedure Act in Section 10 of the United States Administrative Procedure Act.
Administrative Services Agency in France is described as a "Les agences de l’Etat" which provides information on the services and activities of the state to the public through various information and administrative services, providing continuity and efficiency within the administration. ASA in the context of the Administrative Procedure Act in India under Section 18 bestows special powers on the Administrative Tribunal by applying the principles of natural justice. The Administrative Procedures Act (APA) in Japan is an outline of the administrative procedures and determines the positions in the context of the Japanese Law and with regard to the management of administrative agencies.
ASA within the European Union ("EU") is a comparison between a natural person, or a legal person subsisting in any member state of the EU and an administrative authority of the EU within the context of the Treaty on the Functioning of the European Union, Article 13 . The Treaty on the Functioning of the European Union deals with the actions for compensation brought by any natural person, or a legal person, against the EU when the institution has exercised its competence in a manner that infringes with the rights granted by the people or with the agreements binding the EU to the people. Article 299(1)(a)(ii) of the Treaty on the Functioning of the European Union also provides ASA to the Member States of the European Union.
ASA in South Africa has as its foundation the Constitution of the Republic of South Africa of 1996 and the Promotion of Administrative Justice Act-2000 deals with the right to administrative action that is lawful, reasonable and procedurally fair, the right to be given written reasons for administrative action. The right to the review of administrative action by a court or, where appropriate, an independent and impartial tribunal and to administrative action that is not materially less favorable than that which applies in similar situations inside or outside that country, with the redress for the denials of the right being administrative procedures.
Additionally, within the context of the Australian Government, the Administrative Appeals Tribunal ("AAT") was created in 1975 and has since become a major name in Australian administrative law. The AAT deals within the context of administrative law and implements the Commonwealth legislation. The AAT operates in a similar manner to a Court but does not have the power to punish someone for breaching a ruling, except for penalties under the Australian taxation law.
These definitions are not exhaustive but provide guidance to the reader as to how diverse interpretations of ASA can be and how the interpretation and application of ASA can vary across jurisdictions and legal systems.
Recent Legal Disputes Involving ASA
Cablevision Systems Corp. v. Verizon Communications, Inc., 475 F.3d 99 (2d Cir. 2006): In denying Cablevision’s motions for a preliminary injunction against Verizon, the court ultimately focused on a definition of "ASA". As Verizon argued, within the context of the "bright-line" test, the court held that an antenna could not be a "telecommunication service facility" because a subscriber accessing a video programming service must use a separate and distinct "special receiver", and thus cannot self-install the antenna. This precedent helped further narrow the scope of what service facilities are included in ASAs, which, as the court vaguely states, are interpreted to be "physically [in] links contributing to the provision of telecommunication services to subscribers."
Connect America Fund, 26 FCC Rcd. 17663 (2011): In reviewing a denial of a company’s State-operated Tariff, the FCC focused on whether it was "commonly thought of as a supermarket of telecommunication services," which hints toward an inclusivity outlook of what qualifies for an ASA. The FCC reasoned that because a customer must go to a store in order to select their desired services, it would require a more "determinative factor" to presume that an ASA is not a telecommunications service under 47 U.S.C. ยง 332(c)(8).
Legal Difficulties in Interpreting Clauses Containing ASA
Interpreting ASA clauses can be a challenging task both for lawyers writing the clauses and for those called upon to advise in the event of a dispute. The translator must consider statutory, regulatory and other legal requirements and conventions of more than one jurisdiction, each of which may apply differently to different clauses. It is important to ensure that the provisions are compatible not just with each other but also with the legislative framework governing the sale of the company, without prejudicing the company or the rank of share being sold in any future insolvency processes. In addition, it is important that each provision is effective and enforceable in its own right. We have identified, and help clients to challenge, the following issues: Typical Issues While most transactions have unusual features, a number of recurring legal issues have been identified by lawyers advising in a high volume of ASA transactions: Lack of Holistic Approach – Some lawyers focus on individual clauses rather than viewing the agreement as a whole and how it interacts with surrounding documents to create an overall legal framework for the transaction . This can result, for example, in: CROSS BORDER – CROSS SECTOR ISSUES The typical issues identified in the preceding section are compounded when considering the application to acquisitions which have cross border and/or cross sector implications. In particular: INSOLVENCY CONSIDERATIONS Where the assets of a company are, or are likely to be, assigned or transmitted in the event of its insolvency, the assignment will need to comply with the relevant provisions of the Insolvency Act 1986. This may mean that terms which appear to be non-negotiable may have to be modified. CONFLICTS BETWEEN REGULATIONS A checklist outlining the possible conflicts between regulations governing the sale of shares and those governing the sale of assets is provided in the Annex to the Guide. These have been reviewed to enable more efficient drafting of the SPA.