Guarantee Reimbursement and Consideration Agreement

Guarantee Reimbursement & Consideration Agreement

This Guarantee Reimbursement and Consideration Agreement was executed by Daniel Cell, Daniel Cell Revocable Trust (“Cell Trust” and together with Mr. Cell collectively referred to herein as “Cell”), and American Modern Voyages Co., a Delaware corporation (“AMMV”).

AMMV has entered into a Memorandum of Agreement (“Vessel Purchase Agreement”) with HOLY Antiken N.V. to acquire the M/S Nieuw Amsterdam (the “Vessel”). AMMV has assigned its rights under the Vessel Purchase Agreement to Oceanic Ship Co.

The Vessel Purchase Agreement requires AMMV to provide earnest money deposits, from time to time, in amounts increasing up to $10 million, in the aggregate. AMMV has entered into a Letter of Credit Agreement with The Chase Manhattan Bank (“Chase”) pursuant to which AMMV is seeking to obtain a $10 million Letter of Credit Facility (the “Facility”) from Chase.

Cell is a significant beneficial owner, indirectly, of the outstanding shares of common stock of AMMV. Chase is requiring that the Facility be guaranteed by Cell.

AMMV has requested Cell to, and Cell has agreed to, guarantee AMMV’s obligation to reimburse Chase for any payments made by Chase under the Facility (the “Guarantee”) specifically to enable AMMV to satisfy a material term and condition of the Vessel Purchase Agreement that it is currently unable to satisfy without the Guarantee.

Pursuant to this Guarantee Reimbursement and Consideration Agreement and as partial consideration for the Guarantee, AMMV will provide to Cell compensation for providing the Guarantee and an opportunity, directly through stock appreciation units, to benefit from any appreciation in the value of the AMMV common stock following the issuance of the Guarantee.

In the event that pursuant to the Guarantee, Cell is required to and does make any payments to Chase (individually a “Guarantee Payment” and, collectively, “Guarantee Payments”), then AMMV shall be required hereunder to reimburse Cell, in the manner hereinafter set forth, for any and all such Guarantee Payments.

Governing Law: Illinois, USA

Environmental Guaranty Agreement

Environmental Guaranty Agreement 

This Environmental Guaranty Agreement was executed and delivered by the guarantors to and for the benefit of Union Bank of California. The guarantors guaranteed certain financing arrangements from Union Bank to West Valley MRF. West Valley has undertaken certain obligations set forth in an Environmental Compliance Agreement which must also be guaranteed by the guarantors.

Governing Law: California, USA

Debt Assumption by former Guarantors Agreement

Debt Assumption by former Guarantors Agreement

This Agreement for Debt Assumption by former Guarantors was executed by John O. Big, Inc., a Massachusetts corporation (“JOB”), John O. Big International, Inc., a Massachusetts corporation (“JOBI,” and together with JOB, the “Assignors”), I-Quadro Holdings, Inc., a Delaware corporation (“IQHI”), and I-Quadro, Inc., a Delaware corporation and wholly-owned subsidiary of JOBI (“IQI” or “Assignee”). 

JOB and IQI have entered into a certain Reorganization Agreement, pursuant to which JOB and its subsidiaries assigned, transferred and delivered to IQI and its subsidiaries certain assets, and IQI and its subsidiaries assumed from JOB and its subsidiaries certain liabilities.

Assignors have indebtedness outstanding and owing to certain Lenders pursuant to a Credit Agreement (the “Lender Debt”) and the Assignors have indebtedness outstanding and owing to certain Noteholders pursuant to a Note Purchase Agreement (the “Noteholder Debt” and, together with the Lender Debt, the “Debt Obligations”).

The Debt Obligations are guaranteed by IQI, which guarantees will be released upon consummation of IQI’s initial public offering (the “IPO”) of its Class A common stock, par value $.01 per share (“Common Stock”).

Pursuant to this Agreement for Debt Assumption by former Guarantors, the Assignors assigned certain of the Debt Obligations to IQI and IQI assumed the same.

Governing Law: Massachusetts, USA

Signing a loan document as a guarantor

Must I guarantee my friend’s loan?

Question: A friend asked me if I can sign on her loan document as guarantor. She’ll use the money to buy a small home in their province. What happens when a person signs as guarantor to a loan?

Answer: Banks and financial institutions grant loans to individuals who have passed stringent credit checks. These people are known to be of good character, have a good credit history, are not considered credit risks, and have proven themselves to have the capacity to pay, having a steady income from a job, business or profession.

Collateral is also often required in loans. This may be a real estate property, automobile, or securities owned by a person that may be required by the bank or financial institution as assurance that it will be paid. If a person defaults or cannot pay off the loan, the collateral is becomes the bank or financial institution’s property.

If your friend is deemed credit worthy by the bank or financial institution she is approaching for a loan, and if she has ample collateral, she will be granted a loan in no time. There would be no need for a guarantor. However, if the bank or financial institution feels that additional assurance is needed that the creditor (person applying for the loan) can pay, it may require a guarantor to sign the loan document.

What is a guarantor?

As the name implies, a guarantor guarantees to or assures the bank or financial institution that a person’s loan will be paid. He in effect tells the bank or financial institution that he will pay the loan if for some reason the creditor will not be able to pay it in full plus interest. A guarantor can guarantee any type of loan, from a housing loan to even credit card debt.

Be very careful about signing as guarantor in any type of loan. Some people do not realize how serious a matter it is until they find themselves in unfavorable circumstances.

There have been cases of debtors defaulting on their loans and disappearing, even going as far as fleeing to other countries so banks and financial institutions cannot go after them. Guarantors are then looked up and held accountable for the payments already due. It can be quite a shock to be asked, even compelled, to pay for a loan you did not apply for, as some of these guarantors have experienced. And should you be unable to pay off the loan, you may be faced with a court case and your credit history will be severely affected.

Your situation is delicate, considering that it’s your close friend who is asking you the favor of co-signing as guarantor for a loan. But do not decide on the basis of friendship and emotions alone. Ask yourself if you are willing and are able to assume paying your friend’s loan in the event she defaults on paying it.

Should you decide to go ahead and sign on as guarantor, start saving more than you normally do and invest this wisely, just in case the inevitable happens in the future. Make sure you maintain ties with your friend for the duration of the paying period.

If you decide to decline your friend’s request, this does not mean the end of a friendship. There are some other things she can do, such as lowering the loan amount, securing other collateral, and maybe even asking family members to share ownership of the property she plans to buy. Or she may even consider postponing purchasing the property at this time and just continue saving on her own until she has built up enough funds. Your friend may also want to look at a more affordable property. Yet another thing she can do is to check out government financial institutions such Pag-Ibig Fund, SSS or GSIS to see if she will be able to qualify for a higher loan amount at a lower interest cost.

It is important for anyone applying for a loan to determine if he or she will be able to afford the regular payments for the number of years specified. If your friend is not confident she can do this, by all means, she should forego applying for the loan at this time.

Definition of GUARANTEE

1. a promise or assurance, esp. one in writing, that something is of specified quality, content, benefit, etc., or that it will perform satisfactorily for a given length of time: a money-back guarantee. 
2. guaranty (defs. 1, 2). 
3. something that assures a particular outcome or condition: Wealth is no guarantee of happiness. 
4. a person who gives a guarantee or guaranty; guarantor. 
5. a person to whom a guarantee is made. 
–verb (used with object) 6. to secure, as by giving or taking security. 
7. to make oneself answerable for (something) on behalf of someone else who is primarily responsible: to guarantee the fulfillment of a contract. 
8. to undertake to ensure for another, as rights or possessions. 
9. to serve as a warrant or guaranty for. 
10. to engage to protect or indemnify: to guarantee a person against loss. 
11. to engage (to do something). 
12. to promise (usually fol. by a clause as object): I guarantee that I’ll be there. 
[Origin: 1670–80; alter. of guaranty] Unabridged (v 1.1)
Based on the Random House Unabridged Dictionary, © Random House, Inc. 2006.


Something that assures a particular outcome or condition: Lack of interest is a guarantee of failure.  

A promise or an assurance, especially one given in writing, that attests to the quality or durability of a product or service.
A pledge that something will be performed in a specified manner.
A guaranty by which one person assumes responsibility for paying another’s debts or fulfilling another’s responsibilities.
A guaranty for the execution, completion, or existence of something.

A guaranty by which one person assumes responsibility for paying another’s debts or fulfilling another’s responsibilities.
A guaranty for the execution, completion, or existence of something.
A guarantor.

tr.v.   guar·an·teed, guar·an·tee·ing, guar·an·tees

To assume responsibility for the debt, default, or miscarriage of.
To assume responsibility for the quality or performance of: guarantee a product.
To undertake to do, accomplish, or ensure (something) for another: guaranteed to free the captives; guarantees freedom of speech.
To make certain: The rain guarantees a good crop this year.
To furnish security for.
To express or declare with conviction: I guarantee that you’ll like this book.
[Alteration of Middle English garant, warranty, from Old French; see guaranty.]
The American Heritage® Dictionary of the English Language, Fourth Edition. Published by Houghton Mifflin Company.


guarantee  (n.)  

1679, perhaps via Sp. garante, from O.Fr. guarantie, pp. of fem. guarantir “to protect,” from guarant “warrant,” from Frank. *warjand-s, from P.Gmc. *war-, from PIE base *wer- “to cover” (see warrant). For form evolution, see gu-. Originally “person giving something as security,” sense of the “pledge” itself (which is properly a guarranty) first recorded 1786. The verb is attested from 1791.

Online Etymology Dictionary, © 2001 Douglas Harper



1.  a written assurance that some product or service will be provided or will meet certain specifications 
2.  an unconditional commitment that something will happen or that something is true; “there is no guarantee that they are not lying” 
3.  a collateral agreement to answer for the debt of another in case that person defaults 

1.  give surety or assume responsibility; “I vouch for the quality of my products” 
2.  make certain of; “This nest egg will ensure a nice retirement for us”; “Preparation will guarantee success!” 
3.  promise to do or accomplish; “guarantee to free the prisoners” [syn: undertake] 
4.  stand behind and guarantee the quality, accuracy, or condition of; “The dealer warrants all the cars he sells”; “I warrant this information” 

WordNet® 3.0, © 2006 by Princeton University.

guarantee1 [garənˈtiː] noun 

a statement by the maker that something will work for a certain period of time
Example: This guarantee is valid for one year. 
Arabic: ضمانَه، كفالَه
Chinese (Simplified): 保证书
Chinese (Traditional): 保證書
Czech: záruka
Danish: garanti
Estonian: garantii
Finnish: takuu
French: garantie
German: die Garantie
Greek: εγγύηση
Hungarian: garancia
Icelandic: ábyrgð, ábyrgðarsamningur
Indonesian: jaminan
Italian: garanzia
Japanese: 保証書
Korean: 보증서
Latvian: garantija
Lithuanian: garantija
Norwegian: garanti
Polish: gwarancja
Portuguese (Brazil): garantia
Portuguese (Portugal): garantia
Romanian: garanţie
Russian: гарантия
Slovak: záruka
Slovenian: jamstvo
Spanish: garantía
Swedish: garanti
Turkish: garanti

guarantee2 [garənˈtiː] noun

a thing that makes something likely or certain
Example: It is no guarantee against failure. 
Arabic: ضَمان
Chinese (Simplified): 保证
Chinese (Traditional): 保證
Czech: záruka
Danish: garanti; sikkerhed
Estonian: tagatis
Finnish: tae
French: garantie
German: die Garantie
Greek: εγγύηση
Hungarian: biztosíték
Icelandic: trygging
Indonesian: jaminan
Italian: garanzia
Japanese: 保証
Korean: 보증이 되는 것
Latvian: garantija
Lithuanian: garantija
Norwegian: garanti, sikkerhet
Polish: gwarancja
Portuguese (Brazil): garantia
Portuguese (Portugal): garantia
Romanian: garanţie
Russian: гарантия
Slovak: záruka
Slovenian: jamstvo
Spanish: garantía
Swedish: garanti
Turkish: garanti

guarantee1 [garənˈtiː] verb

to act as, or give, a guarantee
Example: This watch is guaranteed for six months. 
Arabic: يَكْفَل
Chinese (Simplified): 保证
Chinese (Traditional): 保證
Czech: dát záruku, mít záruku
Danish: garantere; være dækket af garanti
Estonian: garantiid andma
Finnish: antaa takuu
French: garantir
German: Garantie leisten für
Greek: εγγυώμαι
Hungarian: szavatol
Icelandic: vera í ábyrgð
Indonesian: memberi jaminan
Italian: garantire
Japanese: 保証する
Korean: 보증하다
Latvian: dot garantiju
Lithuanian: duoti garantijÄ…
Norwegian: garantere, gi garanti for
Polish: mieć, *dawać gwarancję
Portuguese (Brazil): garantir
Portuguese (Portugal): garantir
Romanian: a garanta
Russian: гарантировать
Slovak: mať záruku
Slovenian: jamčiti
Spanish: garantizar
Swedish: ha garanti
Turkish: garanti vermek, *etmek

guarantee2 [garənˈtiː] verb

to state that something is true, definite etc
Example: I can’t guarantee that what he told me is correct. 
Arabic: يَضْمَن
Chinese (Simplified): 担保
Chinese (Traditional): 擔保
Czech: (za)ručit
Danish: garantere; love; forsikre
Estonian: tagama
Finnish: taata
French: garantir
German: garantieren
Greek: εγγυώμαι
Hungarian: biztosít
Icelandic: ábyrgjast, tryggja
Indonesian: menjamin
Italian: garantire
Japanese: 請け合う
Korean: 확인하다
Latvian: garantēt; galvot
Lithuanian: garantuoti, laiduoti
Norwegian: garantere, borge (for)
Polish: (za)gwarantować
Portuguese (Brazil): garantir
Portuguese (Portugal): garantir
Romanian: a garanta
Russian: ручаться
Slovak: (za)ruťiť
Slovenian: jamčiti
Spanish: garantizar
Swedish: garantera
Turkish: garanti etmek
Kernerman English Multilingual Dictionary (Beta Version), © 2000-2006 K Dictionaries Ltd.

Main Entry: gua·ran·tee
Pronunciation: "gar-&n-'tE, "gär-
Function: noun
Etymology: probably alteration of guaranty
3 : an assurance that a condition will be fulfilled: as a : an agreement by which one person undertakes to secure another in the possession or enjoyment of something b : an assurance of the quality or of the length of use to be expected from a product offered for sale often with a promise of reimbursement
4 : GUARANTY 4, 5 guarantees> —guarantee transitive verb 

Merriam-Webster’s Dictionary of Law, © 1996 Merriam-Webster, Inc.


Guar`an*tee”\, n.; pl. Guarantees. [For guaranty, prob. influenced by words like assignee, lessee, etc. See Guaranty, and cf. Warrantee.]

1. In law and common usage: A promise to answer for the payment of some debt, or the performance of some duty, in case of the failure of another person, who is, in the first instance, liable to such payment or performance; an engagement which secures or insures another against a contingency; a warranty; a security. Same as Guaranty.

His interest seemed to be a guarantee for his zeal. –Macaulay.

2. One who binds himself to see an undertaking of another performed; a guarantor. –South.

Note: Guarantor is the correct form in this sense.

3. (Law) The person to whom a guaranty is made; — the correlative of guarantor.

Syn: Guarantee, Warranty.

Usage: A guarantee is an engagement that a certain act will be done or not done in future. A warranty is an engagement as to the qualities or title of a thing at the time of the engagement. Webster’s Revised Unabridged Dictionary, © 1996, 1998 MICRA, Inc.

Parents, subsidiaries, guaranties

Nobody loves you when you’re down and out — unless, of course, you have your parent’s guaranty. It’s a simple idea: The Worry Wart Whistle Works (On the Web at! ) won’t supply whistles to thinly capitalized Junior Corp. unless Daddy Corp. guarantees Junior’s obligations. Daddy is to have much the same obligations on the guaranty as Junior has on the whistle-supply agreement.

Sad to say, this simple idea often results in a complicated document with some potentially nasty surprises.

Paraphrasing the 1996 Restatement of the Law (Third) of Suretyship and Guaranty (§1), Daddy will be a guarantor of Junior’s obligations to Worry Wart if, pursuant to contract, Worry Wart has recourse against Daddy for Junior’s obligations to Worry Wart. (Some other things also have to be true for Daddy to be a guarantor, but this is enough for now.)

The first thing to notice about guaranties is that Daddy becomes a guarantor “pursuant to contract.” The contract in question is the guaranty or, to put the proper spin on it, a guaranty is a contract! Accordingly, Daddy and Worry Wart can sculpt the guaranty to do whatever they mutually desire. The law of guaranty is thus partly a set of default rules — what you get unless you agree to something else.

But a guaranty is more than a contract, for it involves three separate relationships, one of which is not contractual: First (using the Restatement’s lingo), Junior has an underlying obligation to Worry Wart to pay for the whistles. Second, Daddy has a secondary obligation , embodied in the guaranty, to pay Worry Wart for the whistles if Junior doesn’t. Third, Junior will have reimbursement and other obligations to Daddy if Daddy pays Worry Wart under the guaranty. Junior’s obligations to Daddy (No, they’re not called “tertiary obligations“) could be modified by agreement, but seldom are. (For unrelated parties, these obligations are often covered by indemnity agreements. Restatement §18.)

For each of these obligations, there are reciprocal obligations of the other party, and (here the problems begin) a party may have defenses based on the conduct of the other two players. Most important, Daddy could be partially or totally discharged from its guaranty if Worry Wart takes certain actions — such as releasing Junior or Junior’s collateral from the underlying obligation — that increase Daddy’s risk.

The trickiest task in most guaranties is to allow the guarantor the proper defenses. As a guarantor, Daddy will generally have two sorts of defenses against Worry Wart. First, Daddy will have what I shall call the “Junior defenses” — all those defenses that Junior has against Worry Wart under the whistle-supply agreement, except for discharge in bankruptcy and lack of capacity (Restatement §34). If, for example, Junior is not liable to pay because Worry Wart delivered wheezy whistles, Daddy should not be liable on the guaranty.

Little need be said about the bankruptcy exception to the Junior defenses, but “capacity” requires a closer look. When does a corporation lack “capacity”? The Restatement includes in lack of capacity a corporation’s entering into a contract that is beyond its powers (§34, Illustration 7). But suppose Junior has the power to contract for whistles, but did not duly authorize the contract? Because of the relationship between Daddy and Junior, it seems inequitable to allow Daddy to escape liability because Junior has a defense of lack of authorization. After all, Daddy knew enough about the supply agreement to sign the guaranty. Worry Wart may therefore want Daddy to waive all defenses based on Junior’s failure to authorize the agreement.

Besides any Junior defenses, Daddy may also have defenses that arise directly out of Daddy’s status as a guarantor — the suretyship defenses. (“Suretyship” is the legal domain of which the law of guaranty forms one of the larger precincts.)

Suretyship law long predates subsidiary corporations. (The Merchant of Venice, my favorite commercial law play, revolves around a suretyship obligation.) In the noncorporate world, a guarantor might be a relative or other person who can not control the parties to the underlying transaction. The law of guaranty sensibly protects the guarantor against the other parties’ deliberately or inadvertently increasing the guarantor’s risk. Such conduct will often provide a guarantor with a complete or partial defense to a claim under the guaranty. (Guaranties tend to be read in favor of the guarantor; see, e.g., Portia’s reading of Antonio’s bond, In re Shylock , 43 Bard.App.3d 471(ca 1598))

The various suretyship defenses make little sense, however, when a company guarantees its subsidiary’s obligations. Daddy Corp. is likely to have firm control over Junior Corp. Moreover, any benefit that Worry Wart grants to Junior is likely to benefit Daddy as well. (Section 48(2) of the Restatement addresses this situation in part by providing that consent by a subsidiary to an act that would otherwise give its parent a suretyship defense will generally constitute consent to that act by the parent.)

Since a guaranty is a contract, Worry Wart may properly insist that Daddy waive the suretyship defenses. Unfortunately, the law of suretyship is largely judge-made, with no authoritatively complete list of the suretyship defenses. Worry Wart may respond to this uncertainty by having Daddy disclaim a laundry list of specific defenses. This often takes several pages, and at the end Worry Wart may still fear that a defense has been missed. Accordingly, Worry Wart may buttress the specific waivers with a general waiver of “all other defenses.”

Call me paranoid, but this last scares me. Mightn’t a waiver of “all other defenses” waive the Junior defenses as well as the suretyship defenses? The context may argue against it, and I don’t believe that “all defenses” has to mean all defenses, but I’d hate to learn the contrary the hard way.

The Restatement favors a refreshingly direct path out of these perplexities: Daddy can waive all (and only) the suretyship defenses with the statement “Daddy Corp. waives all suretyship defenses.” That’s all there is to it. (§48(1) and illustration 3).

Will the Restatement’s formula for waiving suretyship defenses be effective in your jurisdiction? A restatement is not the law, only a codification of the law by a respected bunch of legal eagles. It’s persuasive, not precedential. Moreover, the Restatement is too new to have been cited approvingly by many courts.

If you’re worried about your jurisdiction’s acceptance of the Restatement’s one-sentence waiver, you can buttress it with a second sentence, such as, “The parties intend the preceding waiver of suretyship defenses to have the effects described in Section 48 of the Restatement (Third) of the Law of Suretyship and Guaranty.” The waiver thus drags in the Restatement, not as a statement of governing law but as a statement of the intent of the parties. Remember [here, trumpets], a guaranty is a contract!

Some guaranties say that “the guarantor’s obligation under this guaranty is primary and not secondary.” This is a flat out falsehood — if it’s a primary obligation, then it can’t be a guaranty! Nonetheless, such a statement may work as a waiver of suretyship defenses. The Restatement (§48, comment d) gently allows that

A statement to the effect that the secondary obligor does not have suretyship status, while inaccurate, is ordinarily sufficient [to waive the suretyship defenses], however, because by communicating the absence of that status, it communicates that the incidents of suretyship status . . . are unavailable.

However, if you want to waive the suretyship defenses, there’s no need to dabble in contradiction. Just say “Daddy waives all suretyship defenses.”

Saying that Daddy’s obligations are primary isn’t correct, but it’s not entirely wrong-headed. A primary obligor would have the Junior defenses but not the suretyship defenses. When the Worry Warts of this world insist that Daddy waive “all defenses,” I often propose that we follow that waiver with a statement that “the parties intend that Daddy shall have only those defenses under this guaranty that Daddy would have if it were a co-obligor with Junior on the supply agreement.”

Author: Howard Darmstadter

Darmstadter is an assistant general counsel at Citigroup in New York City

A Lawyer’s Guide To Electronic Discovery Potentially Privileged Searches

A Lawyer’s Guide To Electronic Discovery
Potentially Privileged Searches


Privilege review is usually one of the most critical and sensitive aspects of the document review process.  Inadvertent production of privileged documents can result in waiver of privilege for the produced materials. If these protections are waived, any privileged documents disclosed may be deemed waived for all purposes, not only as it relates to the current matter but also as a basis for new civil filings. While the Federal Rules of Civil Procedure do provide some structure to resolve the dispute if a party inadvertently produces privileged material–and notifies the adversary–a much safer strategy is to make sure that privileged documents are not produced in the first place. 

What is “Privilege” from a Legal Perspective?

Privilege is a legal concept that protects from disclosing confidential communications made between attorney and their client for the purpose of obtaining or providing legal advice or services to the client. Basically, legal advice as communicated from attorney to client is exempt from production. The privilege concept applies to both communications an individual makes to their attorney and communications that a corporate client makes with outside and in-house counsel. Similar and related to the attorney-client privilege is the work-product doctrine, which protects disclosure documents and tangible materials prepared by or under the supervision of an attorney, in anticipation of litigation. This allows clients and counsel to share facts and opinions in order to set case strategy. Because such documents are likely to be extremely sensitive, it is crucial to make sure it is not inadvertently disclosed to adversaries.

Why Does Privilege Matter?

While the penalties for production of privileged documents can be draconian, they are not immediately and irrevocably so. The Federal Rules of Civil Procedure states that if a party believes it has unintentionally produced privileged material they may give notice to the receiving party, who must then “promptly return, sequester, or destroy the specified information and any copies it has” and the party must “take reasonable steps to retrieve” any material it has already disseminated.  Furthermore, Rule 26(b)(5)(B) permits the receiving party to bring the privileged issue promptly to the court’s attention for determination.

However, the laws of privilege are not uniform and can drastically change depending on jurisdiction and revisions of procedural and substantive rules.  When you couple the complexities of these legal non-conformities with the inherent challenges of performing an effective privilege review on millions of documents within the usual tight timeframe of pretrial discovery, it should be of no surprise that best practices dictate proactive efforts to be made up front to ensure that sifting through large volumes of documents to determine which ones are privileged is done accurately and effectively.  It is extremely critical to approach electronic discovery privileged searches with great precision and proper planning. 

What is an electronic discovery potentially privileged search?

An “electronic discovery potentially privileged” search is an electronic method of searching an online review database for specific documents that are likely to be privileged.  Attorneys often run online searches utilizing a particular list of terms that they believe are likely to be privileged in nature, such as emails to and from primary outside counsel. Depending on the type of review application, the potentially privileged searches can usually be run against recipient fields (email addresses and display names) and or the text of the documents. 

The results of these searches are usually isolated and tagged or placed into custom collections or folders.  For example, an attorney may want to run a search for documents containing the name of the general counsel, the name of the outside law firm and the name of all appropriate paralegals.  These results are then isolated into a separate folder for further review. 

How to approach potentially privileged searches in discovery review

Step 1: Consider whether it would make sense to run potentially privileged searches

There are several factors that come into play when deciding whether to run potentially privileged searches.  Some of the factors include whether there is a tight timeframe for discovery requests, whether the review application can support keyword and Boolean-type searching and whether there is a large universe of documents to be reviewed.

For example, you are working on a matter and have two weeks to complete your privilege review. There is one major custodian left to review: a corporate user who has 6 gigabytes data.  1 gigabyte of this is email data that consists of roughly 30,000 messages.  Another three gigabytes are word processing documents that represent another 100,000 pages.  Finally, there are two gigabytes of spreadsheets that represent another 330,000 pages. Considering the tight timeframe and the volume of documents involved, it would likely make sense to do run a potentially privileged search for documents because the search will allow you to isolate potentially privileged documents, streamlining the review process and increasing your chances of successfully meeting your deadline.

Step 2: Communicate clearly to your review team that privileged searches are not a substitute for a privileged review.  

Make sure that you effectively communicate to your entire review team that potentially privileged searches are just a preliminary step toward finding privileged material and are not meant to replace the actual review of documents.  For example, many documents that contain the name of the general counsel may return as a hit. However, because in-house attorneys frequently have dual roles as both legal advisors and business executives, not all of these hits may be privileged. Thus, an independent privileged review must be done after the potentially privileged search.

Additionally, documents that are not indexed or OCR’d for text searchability will not get hits, even if genuinely relevant. These types of documents should be individually checked for privileged material.  Even the best-constructed potentially privileged search is not guaranteed to catch all privileged material, but it can be a great help for streamlining and maximizing efficiency in your privilege review.

Step 3: create the most effective and inclusive potentially privileged search possible

The key to a solid potentially privileged search is constructing the most effective list of search terms.  The first step is to gather the information necessary that will allow you to construct the best and most inclusive potentially privileged search possible. Keywords that are worth considering include law firm names and abbreviated versions of the name, attorney names, and specific attorney e-mail addresses. If your review tool offers it, it is often best to run a wild-carded search that would capture any e-mail to or from someone at the firm.  For example: if the firm’s e-mail addresses are structured as, a metadata search in all recipient fields for *examplefirm* would pull e-mail to and from attorneys at the firm.  This method will also pull e-mails to and from paralegals, secretaries, etc. which may contain privileged material as well. Keep in mind that this type of search will likely pull non-attorney e-mails, so beware of over-inclusiveness.

If you are searching specific attorney names and your review tool supports the function, attorney names are usually best searched for by wildcarding both sides of the last name.  Always include in your potentially privileged searches the terms “work product” and “attorney client privilege”.  Given the significance of these types of terms, it is best practice to use a wildcard, if supported by the review application, such as: “work product*”, “priv*”, “attorney client”, etc.

Step 4: Handle In-House Lawyers Data with Extra Care

In-house lawyers usually wear multiple hats within an organization, including legal counselor, business advisor, and employee. Due to these multiple roles in-house lawyers tend to have large amounts of data, and as attorneys they have high percentages of documents that will likely be deemed as privileged. Thus, data from in-house lawyers–especially general counsel–should be reviewed with extra care. 

If you are a corporate law department and are conducting the potentially privileged search, a good way to identify potential sources of privilege is by thoroughly examining your electronic billing software, and exporting a list of counsel that have billed you in the past.  Once you export this list, you can use it to construct your potentially privileged search.  At that point you can run the search and review the results of the potentially privileged search, make definitive privilege calls, and assemble a privilege log.

Step 5: Avoid common pitfalls

Assuming your review tool supports searching for both parent and child, whether or not both a parent and child document should be included in the search is dependant on the overall review strategy regarding family groups.  If your review strategy is looking at an email and attachment as one unit–and you are tagging parent and child documents consistently so that if one document is privileged, the entire family group is marked privileged–then the search results should return the entire family group.

It is a good idea to investigate oddities about the format of the corporate e-mail address in question.  For example, there may be a number of variations to the corporate email address (especially if the company does business in multiple countries) or personal address (for example, people who are not commonly known by their given name like “Bob” instead of “Robert):

It is also critical to get an understanding of the underlying facts and the timeframe of events relevant to the litigation.  For example, if you are outside counsel working on a trade secret case and the facts in dispute are alleged to have taken place three years ago, it is critical to know the names of attorneys, paralegals, and firms that were around when the events at issue took place.   You will want to ensure you have the names of all firms involved if there were multiple firms, not to mention various firm names if there were mergers or other changes. 

When clients have a tight production deadline, they sometimes request a potentially privileged search and then simply produce everything that does not return as potentially privileged–without even reviewing the documents they produce. This is HIGHLY risky. Potentially privileged searching is not a guarantee that all privileged documents will be identified. Potentially privileged searches are only as good as the terms provided; if the term shows up in a different variation or if there are other privilege-type terms that appear in the data that were not searched, you will be producing privileged documents.


Inadvertent disclosure of privileged material is a significant problem because of the sheer volume of data subject to discovery in litigation and investigations. The rampant growth in the volume and complexity of ESI make privilege review one of the most important and sensitive aspects of the document review process. A potentially privileged search is an important efficiency tool that saves time and money within–but does not replace–the review process.

Bobby Malhotra, Esq. is National Project Manager for Encore Legal Solutions, Professional Services Group. In this role, he manages large-scale electronic discovery, paper discovery and web hosting projects. During his career Mr. Malhotra has served both as an information technologist–both in and out of the legal industry–and a litigation attorney. He has been a frequent speaker on electronic discovery and records management.

By Bobby Malhotra, Esq., Senior Project Manager, Professional Services Group, Encore Legal Solutions lawyer’s guide