Medical Advisory | Preemptively Blocking Contract Risk for a Domestic Medical Device Manufacturer Through Medical Advisory

The contract included an exemption clause stating that, even if the clinical trial results failed, the CRO would bear no legal liability whatsoever.

This means that even if the CRO performed the trial in bad faith or violated regulations, it would be difficult for the client to hold it liable.

It was a structure in which the manufacturer would unilaterally bear any certification delays or monetary loss that might arise in the event of a trial failure.

The medical attorney pointed out that such a clause was contrary to the fairness between the contracting parties, and revised the contract provisions so that the CRO would bear liability in cases of intent or negligence.

There was a provision stating that the full cost of the trial had to be paid in advance regardless of the clinical trial results and that no refund was possible even in the event of failure.

This is a structure that shifts excessive risk onto the client company and can operate as a structure guaranteeing payment to the CRO regardless of its performance.

Through the medical attorney’s medical advisory, this provision was replaced with a provision requiring a partial refund or a retrial obligation where the performance standard is not met.

The contract included a clause that all disputes would be resolved through a civil court located in Germany.

This is a substantively disadvantageous condition for the client.

This is because overseas litigation involves many factors disadvantageous to the exercise of the right of defense, as well as linguistic and cultural barriers and litigation costs.

Accordingly, the medical attorney advised revising the clause into one for dispute resolution through a mutually agreed jurisdiction or neutral international arbitration.

The contract contained a clause providing that ownership of, and the right to use, the clinical trial result data belonged exclusively to Company B, the CRO, which was a serious risk that would prevent Company A from freely using the data in the future product certification or commercialization process.

Through the medical attorney's medical advisory, the contract was adjusted so that the clinical data belonged to the client company as its asset and Company B, merely as the institution performing the practical work, could make only limited use of it.

The fact that the responsible party for the local regulations that must be followed in conducting the clinical trial was unclear was also an important issue.

If Company B violated or failed to comply with the regulations, there was a possibility that the responsibility would be shifted to Company A.

The medical attorney clarified this part and brought about a revision providing that the CRO must thoroughly comply with the local laws and ethical standards, and that it would bear liability for damages in the event of a violation.

Daeryun Law Firm provides the following one-stop medical advisory service, with medical attorneys specializing in the medical industry collaborating with corporate attorneys who handle 🔗international contracts in practice.

▶ Risk analysis of contracts relating to clinical trials, product certification, technology transfers, and exports

▶ Renegotiation strategies and proposals for alternative clauses to prevent disputes

▶ Provision of internal response manuals to prepare for regulatory violations and disputes over exemption and allocation of liability

▶ Provision of advance legal risk reports and advisory

🔗Legal consultation booking If you book a legal consultation, we will respond in an integrated manner to all medical risks that may arise before and after contract conclusion.

Daeryun Law Firm, a strategic partner beyond medical advisory, works alongside you.