Mergers & Acquisitions

Archive Series | Due Diligence in the Purchase and Sale of a Business

If you are considering buying or selling a business, it is helpful to understand the due diligence process. This series from our archives provides a basic overview of the legal issues you should consider (that is, the due diligence you should consider doing) when buying or selling your next business:

An Introduction to Due Diligence Legal Issues Financial Issues Operational Issues Intellectual Property Material Contracts and Information Miscellaneous Issues

Photo: shrinkin’violet | Flickr

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Intellectual Property

The Low Down on End User License Agreements (EULAs)

If you’ve used the Internet any time recently, you’ve likely had to click “I accept” or “I agree” in order to use a particular website or software application. Typically, you are accepting and agreeing to an “end user license agreement.” As a software developer, it’s incredibly important to protect the intellectual property behind the software, as well as reduce as much liability as possible. These end user license agreements spell out the terms of the license for your use of the particular software. Today’s post highlights some of the key characteristics of end user license agreements.

What is an end user license agreement?

An end user license agreement (EULA) is an agreement between a software developer or author and an individual or...

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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

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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Business Startup

Understanding Contract Terms (post 8): Assignments

We continue the Understanding Contract Terms series by explaining assignment clauses. Most contracts include some form of assignment clause. Assignment clauses are important to understand when determining your rights and liabilities under almost any contract.

Assigning a Contract

To understand why this clause is included in the contract it is important to first understand what it means to assign a contract. An assignment of a contract occurs when one party to the contract transfers to another party their  obligations, benefits, or obligations and benefits, of the contract.

In general, assignments are permitted unless there is an express prohibition against assignment in the contract. But this is a very general statement. Certain types of contracts, including “personal service contracts,” are by default unassignable. Also, contracts...

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Business Startup

Tie Up Legal Loose Ends Before the End of the Year

As the year comes to an end, it is a good idea for your business to conduct a legal audit to prevent unnecessary risk and expenses in the coming year. A few minutes now can save you substantial cost and trouble later. Here are a few things your business should consider doing before the new year:

Dissolve any inactive businesses There’s no need to continue to pay filing fees to maintain business licenses and permits for a business entity you are no longer using. To dissolve your business, you’ll need to file Articles of Dissolution with the Secretary of State to notify the state of your intention to dissolve the company. There’s no filing fee in Washington (unless you want expedited service)...

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Contracts

Series | Understanding Contract Terms

In this iVLG blog series, we take common terms you see in your business contracts and help break them down, so you can understand what exactly the terms mean, the role of each term in your contract, and how to explain to the other side why the term makes sense.

We know that reading a contract can be a daunting task, especially when it’s full of words you may not have seen or don’t fully understand. Our goal is to help you understand why contracts include the “boilerplate” terms and how those terms may affect your business. Next time you sign on the dotted line, you’ll know exactly what you’re agreeing to.

The understanding contract terms series will breakdown the following contract...

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Contracts

Understanding Contract Terms (post 2): Indemnification

Last week we started a new contracts series where we explore common terms you see in various contracts and break them down so you can understand exactly what the term means, and its role in your contract. Today’s post will look into the definition of indemnification.

Webster’s Dictionary defines indemnification as “the action of indemnifying” or “the condition of being indemnified,” which is far from helpful. To indemnify is to “secure against hurt, loss, or damage.” Now we’re getting somewhere.

In simple terms, a typical indemnification clause allows you to seek reimbursement for money that you are forced to pay to a third party as a result of injuries or property loss caused by another person’s actions. For example, let’s say that...

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Business Startup

Series LLCs: Exploring the Rise (and Risks) of a New Limited Liability Entity | Post 2

To follow up last week’s post that detailed the background of series LLCs, I wanted to bring to light one of the major risks related to starting a series LLC. Today’s post takes a look at the issues presented by unanswered questions pertaining to treatment of series LLCs and bankruptcy. Over the course of the next few weeks, we’ll discuss four possible options for how bankruptcy could (and perhaps, should) handle series liability during bankruptcy proceedings. Today’s post explores option one: impenetrable boundaries between series.

Are individual series able to file for Bankruptcy? If an insolvent series (or cell) is to protect the other cells from its liabilities, it would make sense that the individual cell could file for bankruptcy. Right? Unfortunately,...

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Business Startup

Avoid Unwanted Liabilities When You Buy a Business

Today’s guest blogger is Brian Rogers, a corporate lawyer at St. Louis-based Evans & Dixon. A contracts aficionado, Brian publishes the Contracts Guy blog and he is the editor of his firm’s new project, the Blog for Business Law, which will be launched on April 16.

“Leave the gun. Take the cannoli.” Fictional mobster Peter Clemenza delivers this famous line in The Godfather after a drive into the country with the godfather’s driver Pauli. The driver betrayed his boss and Clemenza has just meted out justice.

Take the good stuff. Leave the bad stuff. That’s the main idea behind buying a business via an asset purchase.

What’s an Asset Purchase?

There are innumerable ways to structure the purchase of a business, but most deals are...

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