Do Your “Standard” Industry Contracts Protect Your Best Interests?Written by Richard Newman
November 11, 2012 # 1:59 pm # Legal Challenges, Specials # One Comment
Even the very best business law attorney may not be able to assist a company to enforce a poorly drafted agreement.
The litmus test for the enforceability of a business contract often manifests itself in the form of litigation and judicial resolution of specific terms. However, at this point, valuable rights are potentially subject to limitation and it may be too late to correct ambiguously phrased or conflicting terms.
Far too often, big money transactions are documented by utilizing a “standard” terms and conditions. Bad idea – doing so can easily jeopardize contract enforceability right out of the gate.
Networks have numerous deals pending simultaneously, often with significantly different concerns and material terms. Additionally, terms reflected in an advertising insertion order or an invoice may be in direct conflict with the principle agreement. Commonly, inconsistent terms include unaccepted leads, payment, breach and termination.
There is simply no “one size fits all separate transactions” contract.
Can you live with the possibility of not getting paid? If not, consult with an Internet marketing and advertising lawyer in order to ensure that material terms are both desirable and judicially enforceable. Working things out after a business relationship has already started to deteriorate is not realistic.
Another common practice is the recycling of critical arbitration and forum selection clauses without ensuring that a dispute is handled in accordance with the specific business transaction involved. For example, companies are often surprised to learn, after it is too late, that their very own contract provisions require arbitration as a condition precedent to initiating a lawsuit.
Contractual terms pertaining to how, where and under what circumstances a dispute will be resolved are critically important.
Similarly, limitations of liability in the event of a breach, cure provisions, the time periods within which claims must be made, restrictive covenants, attorneys’ fees and indemnity clauses are often glossed over and mistakenly perceived as inconsequential. You must understand the nexus between these legal issues, the nature of the relevant business transaction and what situations are most likely to occur down the road.
All business transactions inherently involve unforeseen events. However, drafting contract terms on a per-transaction basis will go a long way to protecting your interests and reducing risk. Merely hoping for the best with your business relationships is not enough.
Information conveyed in this article is provided for informational purposes only and does not constitute, nor should it be relied upon as legal advice. No person should act or rely on any information in this article without seeking the advice of an attorney.