CONTRACTS 101  WHAT YOU NEED TO KNOW TO PROTECT YOURSELF  PART THREE OF THREE PARTS 

 

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IX.VENUE/CHOICE OF LAW FOR DISPUTE RESOLUTION. Be sure your contract specifies that you want to have your dispute heard in the most convenient place for you, and specify the state law that you want to use.

Example:  You are a wedding photographer, and a local couple flies you to Vancouver. B.C., Canada for the wedding, because the client/customer is from Vancouver.  In the event of a dispute over money, you don’t want to be flying to Vancouver to appear in court.  Specify that any court action, arbitration or mediation shall take place in San Francisco, CA and shall use California law to resolve the dispute.  Otherwise, you could be subject to Canadian law, in this example.

X.LIQUIDATED DAMAGES CLAUSESThe purpose of a liquidated damages clause is to establish a dollar value that both Parties agree when they sign the contract that shall be paid to a contracting Party in the event of certain breaches of the contract. It is used when it may be difficult to determine an exact amount that should be paid to the non-breaching Party.

Example:  A groom doesn’t show up for the wedding, but the photographer or other vendor has given up other jobs for that day, and spent several hours at the venue, incurring costs for equipment, film, personnel, food, transportation, and cannot take photos because no wedding takes place.  How much of the deposit does the photographer get to keep?  Alternatively, the photographer gets sick at the last minute, cannot come to the wedding, and doesn’t have a stand-in.  What is the value to the marrying couple for having no photos of their wedding?  Both these eventualities should be spelled out in the contract.

 XI.ATTORNEY’S FEE PROVISIONSIn the event you have to go to court, arbitration or mediation, make sure your contract has a provision for you to get reimbursed for costs, attorney’s fees, etc., if you are the prevailing Party.  If you fail to do this, your attorney’s fees may be significantly more than the fees you recover from your client.

XII.LEGAL/INTELLECTUAL PROPERTY ISSUESSome additional issues that should be addressed by the contract include:

a.Online contracts

1.How does the other Party accept them?

2.How does the businessperson confirm acceptance?

b.Paper contracts

1.Include mail and email acceptances.

c.Rights to the photos, artwork or branding

1.Who owns the rights to these?

2.Are they licensed or owned?

d.Trademark/copyright issues

1.Does your product/service infringe on anyone else’s trademark, trade dress or service mark?

XIII.REMEDIES. What happens to the innocent Party when one Party fails to perform under the contract or only partly performs?

Example: Businessperson gets to keep a portion (or all) of the deposit if the appointment has to be rescheduled at the last minute.  Doctors do this all the time.  Client gets a refund of his/her money if businessperson fails to show, and the appointment cannot be rescheduled, such as a special church service, birthday party, etc.

XIV.ADDITIONAL CONTRACT CLAUSES.  Some additional contract clauses you may want to include in the contract are as follows:

 

Acceptance of Agreement:  By executing the document below, Parties accept the terms of this Agreement.

Effective Date:  This Agreement shall be conditioned upon and effective upon execution of this Agreement by Parties.

Effect of Headings:  The subject headings of the paragraphs and subparagraphs of this Agreement are included for the purposes of convenience only, and shall not affect the construction or interpretation of any of its provisions.

Amendments:  How and when can changes be made to the original document?

Construction:  Does the drafter of the contract get the benefit of the meaning of contract  provisions?  This is important if they are uncommon.

Entire Agreement:  This Agreement and the writings attached constitute the entire Agreement of the Parties and supersede all prior or contemporaneous written or oral agreements, representations and understandings of the Parties.

Parties in Interest:  Nothing in the Agreement, whether express or implied, is intended to confer any rights or remedies under or by reason of this Agreement on any persons other than the Parties to it, and the respective successors and assigns.

Further Assurances:  The Parties shall cooperate, take such actions and execute, additional documents or instruments necessary to effectuate the Agreement.

Counterparts:  This Agreement may be executed in counterparts, each of which shall be deemed an original including electronically transmitted copies.

Successors and Assigns:  This Agreement shall be binding upon and benefit the successors and assigns of the Parties.

Survival:  All of the provisions, terms and covenants contained or referred to in this Agreement shall survive the close of the Agreement.

Time:  Time is of the essence of this Agreement.

Joint and Severable:  Should any provision of this Agreement be found to be invalid, it shall not affect the validity of the other remaining provisions of this Agreement.

Notices:  All notices, requests, demands and other communications under this Agreement shall be in writing and shall be deemed to have been duly given on the date of service if served personally on the Party to whom notice is to be given, or on the fifth day after mailing.

Assignment:  Do both parties agree that the contract can be assigned if something happens to the main businessperson?

Warranties.  Are there warranties that extend beyond the Agreement.

Guarantees– Do you want to guarantee satisfaction, or the Client gets their money back?

Representations.  Is the Client relying on something in your website or other contract that induced her to act? A Party may have reason to sue you if they find out it is untrue.

Waiver.  Waiver of one clause of the Agreement does not imply waiver of other clauses.

 

Need help with drafting, review or negotiation of a contract? Nancy Lewellen can help you do this with ease.  Contact her today at nyl@palladianlawgroup.com or 415-399-0993 for a free 15-minute consultation.

 

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