United States: Tennessee Supreme Court Upholds Commissioner-Imposed Variance Requiring Use Of Market-Based Sourcing

The Tennessee Supreme Court recently upheld the authority of the Tennessee Commissioner of Revenue to require an alternative method of apportionment when the statutory cost-of-performance (COP) method did not fairly represent the extent of a taxpayer's business activity in the state.1 The imposed variance required a telecommunications company to source its receipts using a market-based approach.

Background

The taxpayer, a telecommunications company based in California, held a 45 percent interest in a partnership (Cellco) that operated a telecommunications business known as Verizon Wireless. During the relevant years, Verizon Wireless conducted a wireless voice and data business throughout the United States and had customers with billing addresses in Tennessee. In its original Tennessee franchise and excise tax returns, the taxpayer calculated its apportionment formula sales factor by using a pay-per-use or primary-place-of-use (PPU) methodology that sourced to Tennessee any sales of Cellco's telecommunications services that were made to customers with a Tennessee billing address.

After filing its returns, the taxpayer filed a refund claim and argued that it was not subject to Tennessee franchise and excise taxes because it only had a 45 percent interest in Cellco and did not control its day-to-day operations. Following a denial by the Tennessee Department of Revenue on that issue, the taxpayer commenced litigation, and subsequently filed an amended complaint that first raised the alternative argument that a COP analysis should be used to apportion the income instead of the PPU method. Under the COP method, the majority of the costs associated with its wireless services were incurred in New Jersey. Thus, the use of the COP method resulted in over $1 billion in previously taxable earnings no longer being taxable in Tennessee or any other state, which resulted in an 89 percent reduction in the formula used to compute tax liability. In response, the Commissioner issued an apportionment variance letter and argued that the sales should be sourced using the PPU method.2

The trial court rejected the taxpayer's nexus argument and granted the Commissioner's motion for summary judgment on this issue. Following a bench trial, the court held that the Commissioner properly issued the apportionment variance.3 According to the trial court, the variance was issued in response to a "tax computation, allocation or apportionment" which did not "fairly represent the extent of the taxpayer's business activity in the state."4

The taxpayer appealed this decision to the Tennessee Court of Appeals, which held in a split decision that the Commissioner properly issued a variance requiring the taxpayer to apportion sales using market-based sourcing based on a customer's billing address rather than the statutory COP method.5 In affirming the trial court, the Court of Appeals agreed that the Commissioner properly exercised his discretion in requiring the variance because the COP apportionment method did not fairly represent the taxpayer's business activity in the state. In affirming the trial court, the Court of Appeals explained that the determinative question was whether the Commissioner acted within his discretion when he issued the variance.6 Notably, the dissent believed that the Commissioner's authority to issue a variance was limited by the Department's regulations and that issuance of the variance had exceeded his authority.

On appeal, the taxpayer asked the Tennessee Supreme Court to address the following issues: (i) whether the Commissioner abused his discretion by imposing a variance requiring the use of a sourcing methodology directly contrary to the statutory COP method; (ii) whether the Commissioner abused his discretion by imposing a variance in complete absence of the "unusual circumstances" and "incongruous result" demanded by law; and (iii) whether the Commissioner violated the separation of powers required by the Constitution by imposing a variance in circumstances where application of the franchise and excise tax apportionment statutes reached the precise result the legislature intended when adopting those statutes.7 Because the third issue had not been raised at the trial court level, the Court considered only whether the Commissioner's imposition of a variance was an abuse of discretion.

Tennessee's Apportionment Methodology

For the tax years at issue, Tennessee followed the traditional apportionment methodology provided by the Uniform Division of Income for Tax Purposes Act (UDITPA) and the Multistate Tax Commission (MTC) in corresponding regulations.8 Under Tennessee law, sales, other than sales of tangible property, are in the state if the earnings-producing activity is performed (i) in the state or (ii) both within and outside the state and a greater proportion of the activity is performed in Tennessee, based on COP.9 If the statutory apportionment provisions "do not fairly represent the extent of the taxpayer's business activity in this State," the taxpayer may request, or the Department may require, the use of an alternative apportionment method.10 A regulation explains that the variance statute will "permit a departure from the allocation and apportionment provisions only in limited and specific cases."11 Further, the regulation provides that a variance "may be invoked only in specific cases where unusual fact situations (which ordinarily will be unique and nonrecurring) produce incongruous results under the apportionment and allocation provisions contained in the Franchise and Excise Tax Laws."12

Commissioner's Imposition of Variance Not Abuse of Discretion

Apportionment and Variance Statutes and Regulations

The Tennessee Supreme Court first examined the history of Tennessee's relevant franchise and excise tax statutes and regulations. Notably, Tennessee's original tax variance statute only allowed the Commissioner to issue a variance at the request of the taxpayer. With Tennessee's 1976 repeal of this statute and concurrent adoption of UDITPA, including its Section 18 variance provision,13 the Commissioner gained authority to impose a variance on a taxpayer.14 Also, the Commissioner gained authorization to issue a variance if UDITPA's allocation and apportionment provisions do not fairly represent a taxpayer's business activities in the state. Such variance can be required with respect to all or any part of the taxpayer's business activity. When a variance is warranted, the statute authorizes the Commissioner to require a variance by employing one of four alternatives, if reasonable: (i) separate accounting; (ii) the exclusion of one or more statutory factors; (iii) the addition of one or more factors that would fairly represent the taxpayer's business activity in the state; or (iv) any other method that would effectuate an equitable solution and apportionment of the taxpayer's income.15 In 1977, Tennessee promulgated the regulation described above permitting a variance departing from the allocation and apportionment provisions only in limited and specific cases, where "unusual fact situations (which ordinarily will be unique and nonrecurring) produce incongruous results . . .."16

In 1999, the Tennessee legislature adopted a new, non-uniform provision not contained in UDITPA, authorizing the Commissioner to use "any other method to source receipts for purposes of the receipts factor" in the numerator of the apportionment formula.17 Pursuant to the legislative history, the change was intended to broaden the Commissioner's authority to issue a variance in order to prevent companies from shifting income out of Tennessee.

Based on these rules, the Court clarified that the threshold inquiry under the variance statute is whether the standard statutory tax apportionment provisions do not fairly represent the extent of the taxpayer's business activity in the state. If that threshold is met, then whether the alternate formula selected by the Commissioner in the variance is "reasonable" must be considered.

Fair Reflection of Income

First, the Court determined that the Commissioner did not abuse his discretion by concluding that the use of the statutory apportionment formula did not result in a fair representation of the taxpayer's business activity in Tennessee. Specifically, the taxpayer's argument that the Commissioner's variance was contrary to the intent of the legislature was rejected on the grounds that the legislature expressly granted the Commissioner the right to issue variances in cases in which the statutory apportionment formula did not fairly reflect the taxpayer's business activity in the state. The Court commented that this argument was circular because the legislature both prescribed a statutory apportionment formula and granted the Commissioner the ability to issue variances from that formula in certain cases. Also, the Court noted that the taxpayer's argument that the mathematical result of applying the statutory formula necessarily fairly reflected its income would result in the Commissioner effectively not having the authority to issue variances in any case.

Notably, the Court referenced another case in which a similar argument was rejected by the Court of Appeals. Specifically, in BellSouth Advertising & Publishing Corp. v. Chumley,18 the Court of Appeals noted that the legislature, in enacting the variance statute, was aware that statutory formulas sometimes "just do not work," and held that the Commissioner's imposition of a variance in such an instance was not an abuse of discretion. In the present case, the Court noted that the taxpayer's receipts for telecommunications services for Tennessee customers totalled over $1.3 billion. If the taxpayer were permitted to apply its requested COP method as advocated, its sales factor would be reduced to approximately $150 million, leaving billions of dollars in revenue from Tennessee customers invisible for tax purposes under the statutory formula. As explained by the Court, "[i]t is difficult to imagine a more extreme example of a situation in which application of the statutory apportionment formula does not 'fairly represent the extent of the taxpayer's business activity in this state.'"

Reasonableness of Proposed Variance

After determining that the statutory apportionment formula did not result in a fair representation of the taxpayer's Tennessee business activity, the Court addressed whether the alternate formula selected by the Commissioner in the variance was "reasonable."19 Citing the Commissioner's original finding, the Court found that the alternate formula was reasonable because it was the formula the taxpayer originally used on its returns and because it treated as Tennessee receipts the payments made by Tennessee customers for wireless services. The Court also noted that the taxpayer did not present much argument over whether the alternate formula was reasonable, focusing instead on whether the Commissioner had the power to issue a variance at all. Importantly, the Court considered whether the Commissioner's variance was consistent with the UDITPA goal of taxing no more or less than 100 percent of the taxpayer's income. In this instance, adopting the taxpayer's proposed apportionment method would result in its Tennessee receipts becoming "nowhere income" not taxed by any jurisdiction. On the other hand, the Court noted that the Commissioner's method proposed no danger of double taxation. Therefore, the variance was consistent with UDITPA goals because it did not result in double taxation and prevented nowhere income.

Limitations Imposed by Variance Regulation

With respect to the pertinent regulatory language allowing a departure from the statutory apportionment formula "only in limited and specific cases . . . where unusual fact situations . . . produce incongruous results,"20 the Court considered the taxpayer's argument that imposition of the variance exceeded these prescribed limits. Specifically, the taxpayer contended that the subject variance is in essence imposed on the entire telecommunications industry. Rejecting this argument, the Court found that the Commissioner may exercise his discretion to impose a variance for an individual taxpayer even in a recurring situation, so long as the standard methodology or formula does not fairly reflect that taxpayer's business activity in the state. Further, the Commissioner then has the option of following this action with efforts to promulgate regulations or statutory modifications if necessary. Therefore, the Court found that the variance imposed did not violate the regulatory limits.

Within Range of Acceptable Alternatives

Finally, the Court considered whether the variance imposed was within the range of acceptable alternatives available to the Commissioner, given the facts and circumstances. The taxpayer received substantial receipts from Tennessee customers, and the statutory apportionment formula, as reflected in its refund request, would leave it "reaping millions of dollars in receipts from doing business in Tennessee while paying no tax for the privilege of doing so." Alternatively, the imposed variance would not subject the taxpayer to taxation on more or less than 100 percent of its receipts from Tennessee customers.

Therefore, the Court agreed with the conclusions reached by both the trial court and Court of Appeals that the Commissioner did not abuse his discretion by imposing the variance on the taxpayer for the relevant period. Specifically, the Court concluded that the taxpayer did not meet its burden of proving that the Commissioner's exercise of his variance authority amounted to an abuse of discretion.

Commentary

The Tennessee Supreme Court seemed very concerned about the concept of nowhere income in this decision. Given the legislative history surrounding Tennessee's efforts to prevent income shifting out of state, and the significant dollar amount involved, it is not surprising that the state disagreed with Vodafone's attempted sourcing of its Tennessee receipts to New Jersey. It is worth noting that Vodafone's primary argument was that it should have been sourcing its Tennessee sales using the state's statutory apportionment formula all along. Seemingly because this resulted in less income being apportioned to Tennessee than another method, the Commissioner rejected the statutory method and issued a variance. The decision could embolden the Department to continue using its power of discretionary authority. Conversely, taxpayers with significant Tennessee property and payroll could challenge COP sourcing and request a variance using market-based sourcing based on similar arguments.

Taxpayers in cases in which the statutory formula results in less income being sourced to Tennessee than another apportionment method should be wary of the potential impact of this decision. In such cases, the only thing preventing the state from requiring the use of the apportionment method that sources the most income to the state is the requirement that variances be issued only in limited and specific cases. It remains to be seen how narrowly Tennessee courts will construe that limitation on the use of variances, especially in light of recent legislative changes.

Notably, for tax years beginning on or after July 1, 2016, Tennessee replaces the COP method for sourcing sales other than sales of tangible personal property with a market-based sourcing method.21 Also, a special sourcing provision applies to certain qualified telecommunications companies that are members of a qualified group.22 For such taxpayers, total receipts in Tennessee equal the receipts from all sales of tangible personal property sourced to the state under the standard apportionment provisions plus the average of the receipts from all sales other than tangible personal property that are in Tennessee determined under each of the following alternative methods: (i) all sales sourced to Tennessee under the new market-based sourcing provisions; and (ii) all sales sourced to Tennessee based on COP.23 Interestingly, to be subject to the telecommunications sourcing provision, a taxpayer must meet a rather significant revenue threshold. By adopting this legislation, Tennessee joined the ranks of many other states in adopting market-based sourcing rules for sales other than sales of tangible personal property.24 The Tennessee market-based sourcing provisions differ from the statutes in other states because they allow taxpayers to elect to use the COP method if it results in a higher apportionment factor than market-based sourcing.

Tennessee's adoption of market-based sourcing and special apportionment rules for telecommunications companies seems especially fitting in light of this decision and the similar BellSouth Advertising & Publishing Corp. v. Chumley25 decision in which the Commissioner had been issuing variances requiring the use of market-based sourcing rather than the statutory COP method. Time will tell whether these newly adopted rules will result in more variances being issued by the Commissioner and even more controversies regarding sales factor apportionment methodology.

Footnotes

1 Vodafone Americas Holding, Inc. v. Roberts, Tennessee Supreme Court, No. M2013-00947-SC-R11- CV, March 23, 2016.

2 In the variance letter, the Commissioner claimed that the PPU method was readily substantiated, but the COP was potentially subject to arbitrary assignment of costs to particular states. The Commissioner argued that the taxpayer's COP calculations included its costs everywhere and did not capture costs specific to Tennessee. As a result, over $1 billion in taxable receipts from Tennessee customers were not taxable in Tennessee or any other state.

3 Vodafone Americas Holdings, Inc. v. Roberts, Tennessee Chancery Court, 20th Judicial District, Davidson County, No. 07-1860-IV, March 19, 2013. For a discussion of this decision, see GT SALT Alert: Tennessee Trial Court Approves Variance Requiring Telecommunications Company to Use Market-Based Sourcing.

4 Id.

5 Vodafone Americas Holdings Inc. v. Roberts, Tennessee Court of Appeals, No. M2013-00947-COAR3- CV, June 23, 2014; leave to appeal granted, Tennessee Supreme Court, Nov. 20, 2014. For a discussion of this case, see GT SALT Alert: Tennessee Court of Appeals Affirms Variance Requiring Telecommunications Company to Use Market-Based Sourcing.

6 Both the trial and appellate decisions repeatedly cited BellSouth Advertising & Publishing Corp. v. Chumley, 308 S.W.3d 350 (Tenn. Ct. App. 2009), leave to appeal denied, Tennessee Supreme Court, March 1, 2010. In this case, the Tennessee Court of Appeals held that the Commissioner correctly used an alternative apportionment method instead of the statutory COP method where a telephone directory publisher incurred all of its costs outside Tennessee but earned its advertising revenue from the distribution of directories within the state.

7 Specifically, Vodafone argued that: (i) the Tennessee franchise and excise tax statutes mandate that the receipts from its wireless telecommunications services be sourced by the statutory COP methodology and there is a strong presumption in favor of the standard apportionment formula; (ii) the Commissioner has only limited authority to impose a variance, which it exceeded in this case by imposing a variance requiring use of the market-based sourcing method used in the taxpayer's originally filed returns; (iii) the Department's own regulations circumscribe the Commissioner's authority to impose a variance, allowing imposition only in "limited and specific cases," to address "incongruous results" not intended by the legislature, that arise out of "unusual fact situations" that are unique to the taxpayer and nonrecurring; and (iv) the variance issued contravenes the legislature's authority to enact laws and impose taxes and allowing the variance would create chaos for taxpayers who rely upon the predictability of the franchise and excise tax statutes.

8 In 2015, Tennessee enacted legislation making major changes to its apportionment provisions, including the adoption of market-based sourcing for sales of other than tangible personal property for tax years beginning on or after July 1, 2016. Also, the new law adds specific apportionment provisions applicable to telecommunications companies. H.B. 644, Laws 2015. For a discussion of this legislation, see GT SALT Alert: Tennessee Enacts Major Legislation Expanding Nexus, Adopting Market-Based Sourcing.

9 TENN. CODE ANN. §§ 67-4-2012(i); 67-4-2111(i).

10 TENN. CODE ANN. §§ 67-4-2014; 67-4-2112.

11 TENN. COMP. R. & REGS. 1320-6-1-.35(1)(a)(4).

12 Id.

13 Section 18, Uniform Division of Income for Tax Purposes Act.

14 TENN. CODE ANN. §§ 67-2723; 67-2918.

15 Id.

16 TENN. COMP. R. & REGS. 1320-06-01-.35(1)(a)(4).

17 TENN. CODE ANN. §§ 67-4-2014(a)(4); 67-4-2112(a)(4).

18 308 S.W.3d 350 (Tenn. Ct. App. 2009), leave to appeal denied, Tennessee Supreme Court, March 1, 2010.

19 TENN. CODE ANN. §§ 67-4-2014(a); 67-4-2112(a).

20 TENN. COMP. R. & REGS. 1320-06-01-.35(1)(a)(4).

21 TENN. CODE ANN. §§ 67-4-2012(i); 67-4-2111(i).

22 TENN. CODE ANN. §§ 67-4-2012(j); 67-4-2111(j). This special provision applies to a qualified group member that is principally engaged in the sale of telecommunications, mobile telecommunications service, Internet access service, video programming service, direct-to-home satellite television programming service, or a combination of services, as each term is used or defined for sales and use tax purposes. "Qualified group" means an affiliated group that meets both of the following criteria: (i) one or more of the members of the group is a qualified member; and (ii) the members of the group either (a) incur aggregate, qualified expenditures exceeding $150 million; or (b) make sales that are subject to sales and use tax in excess of $150 million.

23 TENN. CODE ANN. §§ 67-4-2012(j)(1); 67-4-2111(j)(1).

24 For example, the following jurisdictions have adopted market-based sourcing fairly recently: Alabama, California, District of Columbia, Illinois, Maine, Massachusetts, Michigan, Nebraska, New York, Oklahoma, Pennsylvania, Rhode Island, Utah and Wisconsin.

25 308 S.W.3d 350 (Tenn. Ct. App. 2009), leave to appeal denied, Tenn. Supreme Court, March 1, 2010.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Similar Articles
Relevancy Powered by MondaqAI
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions