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Contract Review


Many times a business or individual will be required to enter into a formal written contract regarding a substantial ongoing relationship.  Having a contract reviewed is an efficient way to avoid problems and even litigation in the future.  The cost of review is frequently as low as $100 or $200, but the cost of litigation is almost always in the thousands.  


Typical contracts we review are leases, purchase and sale agreements, building contracts, employment contracts.  While there are too many variables to discuss all the nuances in contract review there are some concepts that flow through our work.  Some of the items we focus on are the following:

  • Restrictive covenants in employment or sale of business contracts.  These provisions may restrict competition with the former employer purchaser of your business or they may prohibit solicitation of certain customers.  Sometimes these provisions may be legally unenforceable.  Unfortunately there is widespread belief that these provisions are not enforceable and the law in the state of Georgia has changed over the last 10 years making many of these provisions enforceable.  
  • Jurisdictional provisions.  These clauses are becoming more common.  They govern where a suit may be filed in the event a dispute regarding the contract arises.  These provisions seem innocuous enough at the beginning of a contractual relationship when no one is contemplating breach of the contract but can be very difficult when a suit is filed sometimes in another state very far away and the suit must be defended.  
  • Variance from the norm.  Many times a contract will be written in a way that is very beneficial to one of the parties.  Frequently the buyer or the seller is not in a bargaining position to demand much if anything in the way of changes to the proposed contract.  Many times this will be due to the fact that all participants in a particular market offer the same kinds of contracts.  In such cases we look for contract terms which are outside the typical, ordinary, and customary provisions.  
  • Persons and entities bound.  The people and entities sought to be bound is an important aspect in every contract.  If a person signs a contract in his capacity as an officer of a corporation this has a very different impact from signing in his individual capacity which would represent a personal guaranty.  The concept is very simple but the practice in execution generates litigation out of proportion with the simplicity of the concept.  See the Corporate Guide for a more complete discussion of incorporating, limited liability, piercing the corporate veil.  

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Send mail to davidjreed@davidjreed.com with questions or comments about this web site.
Last modified: December 05, 2006