Business Law

Understanding Contract Terms (Post 12): The Waiver Clause

We continue the Understanding Contract Terms series by explaining waiver clauses. Most contracts include some form of a waiver clause. Waiver clauses are important to understanding when contract provisions can be enforced and when certain actions may forfeit your rights under the contract.

What is a waiver clause?

In basic terms, the word “waive” means to give up a right or interest by choosing (intentionally or not) to let the opportunity to enforce the right or interest pass. Simply put, to waive something means to not enforce it.

Waiver clauses, then, are clauses in a contract that govern (1) how a party to the contract can waive a right and (2) what happens when a party to the contract waives the right.

To highlight how a...

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Contracts

Major Issues to Consider When Drafting or Reviewing a Non-Disclosure Agreement (NDA)

A non-disclosure agreement, or NDA, is an agreement that is meant to protect a party (or both parties) from losing control over all or parts of their valuable intellectual property. The NDA prevents one party from disclosing certain information belonging to the other party without permission. By preventing disclosure without permission, a party can maintain the value inherent in keeping certain intellectual property a secret from the outside world while still sharing that intellectual property with those who might help them build on it (or who might purchase the right to use it). But a non-disclosure agreement not thoughtfully considered can become a license for the other party to destroy or significantly diminish the value of your intellectual property. Here...

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Contracts

The Business Purchase Letter of Intent

Today’s post discusses an important early step when you are purchasing a business: drafting and negotiating a business purchase letter of intent. The process of drafting and negotiating a business purchase letter of intent generally follows the initial negotiation of the major business purchase terms. Those material terms—price, payment method, closing timing, and basic conditions to the sale—are generally negotiated directly between the parties on smaller business purchase and sale transactions. On larger transactions, the parties and their brokers and investment bankers negotiate those terms.

After you agree on what each party is going to do as part of the business purchase, one party (often the buyer) will distill those main business terms into a written document that is the business purchase letter of intent....

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Contracts

Brewery Law 101: Key Contracts for Breweries

We continue our Brewery Law 101 series by exploring some key contracts to consider when opening a brewery. Below we’ve highlighted a few key contracts for breweries. These agreements are importnat to have in place and understand in order to keep your brewery as protected as possible.

Commercial Lease Agreements

When you get to the point that it is no longer feasible to brew batches of beer in your basement, backyard, or garage, it’s time to begin exploring a commercial space to house your operations. Some important considerations (among others) to sort out as you begin hunting for the right space include: how large of a space do you need? Will you operate a tasting room or just brew beer to distribute...

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Contracts

5 Contract Clauses to Help You More Quickly Resolve Contract Disputes

The purpose of executing written business contracts instead of relying on oral agreements is to manage risks and expectations. When I draft contracts, my job is to state clearly the parties’ responsibilities under an agreement. My  job is also to prepare my clients for the possibility that things take a turn for the worse and the other party fails to fulfill their promises. A major benefit of having a contract is to help you more quickly and easily resolve a dispute if it arises. Quickly and easily resolving disputes means your business will spend substantially less money dealing with dispute resolution, so it is important for your bottom line that you ensure your contracts are well drafted to prepare you for...

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Contracts

Alternative Dispute Resolution Series: Arbitration

In our last post in the Alternative Dispute Resolution Series, we discussed the growing ADR industry and the basics of mediation. In this post, we’ll discuss the other very popular ADR method, arbitration.

In arbitration, a third-party neutral (arbitrator) hears both sides of a dispute and decides on a specific issue or award. Often, an arbitration is very similar to a trial, because the parties will present opening statements, evidence, witnesses, and closing statements. Witnesses are also generally subject to direct and cross examination. However, the biggest difference is that the arbitrator takes the place of the decision maker in a trial. After the arbitrator reviews the evidence and hears the case from both sides, he or she will issue a...

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Contracts

Understanding Contract Terms (Post 11): Counterparts

We continue the Understanding Contract Terms series by explaining counterparts clauses. Most contracts include some form of counterparts clause. Counterparts clauses are important to understand when you need to determine how a contract can be executed and when it is enforceable.

What is a “Counterpart”?

Counterparts, in contract law, are one of several written papers that constitute a contract, such as a written offer and a written acceptance, both of which are separate documents, or counterparts, that together form a contract. In the internet age, it is common for two parties to execute a contract without sitting down in the same room to sign the same piece of paper. Often a contract is executed in several counterparts, each signed by a different...

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Contracts

Understanding Contract Terms (Post 10): Limitation of Liability

We continue the Understanding Contract Terms series by explaining limitation of liability (sometimes called “limitation on liability”) clauses. Many contracts include some form of limitation of liability clause, and they are important to understand to determine your potential liability exposure under your business’ contracts.

Limiting Your Liability A limitation of liability clause allows parties to reduce or, in some cases, eliminate the potential for damages, including direct, consequential, special, incidental, or indirect liability. The limitation clauses can also include a cap on damages should damages flow from a breach of the contract. Often you will see these clauses in boldface type, underlined, or in larger font to make sure both parties are aware of the limitation on liability and damages, and many...

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Contracts

Understanding Contract Terms (post 7): Choice of Law and Venue

We continue the Understanding Contract Terms series by explaining choice of law and venue clauses, also called “forum selection” clauses.  You see choice of law and venue terms in many contracts, because they can be important terms worth significant money. You will often see choice of law clauses and choice of venue clauses grouped together in a single paragraph. Here is an example of a typical choice of law and venue clause:

Section ____ Governing Law; Jurisdiction. To the maximum extent permitted by applicable law, the provisions of this Agreement shall be governed by and construed and enforced in accordance with the laws of the State of ___________, without regard to principles of conflicts of law. Each of the parties hereto...

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Contracts

The Flexibility of a Revocable Living Trust

Perhaps you’ve heard the term “revocable living trust.” Its increasing popularity has made it a frequent topic of conversation among tax and estate planners. As daunting and complicated as the term may sound, the process of creating a revocable living trust is actually quite simple. This type of trust allows you to transfer ownership of your assets to the trust while still giving you the right to possess and use your assets while you’re living. Furthermore, these trusts enable you to ensure your estate does not pass through probate upon your death. It may sound crazy to most—give up ownership of all of your property? It’s really not as crazy as it may sound. Read on to find out why...

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