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| | Contract Review
Introduction
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.
Services
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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