As a business transactional lawyer, I handle all aspects of business.
I can form entities on a business’ behalf, and make sure that businesses have the right entities in place. I can create buy-sell agreements among owners of a business if they have an outside partner or partners, which would allow them to dispose of their assets in the event that the person leaves or dies (because they may not want to be partners with that person’s spouse or children).
We handle all of those issues, usually during what is called the “formation stage.” The formation stage basically means organizing the entity and putting the documents in place to create the entity. Finally, we create contracts relating to the agreement among the owners of the business, and then transition into what we call the “operational side”. This includes employment contracts for key executives, third party vendor agreements, purchase orders, and things of that nature.
One of the main services we offer in this sub-field has to do with the Uniform Commercial Code, which is a national standard that allows you to put certain terms in your invoices and purchase orders that are binding on the other party if they accept a purchase order. I help clients create the proper purchase order code so that they can handle any disputes that arise.
In addition, we can help create employee handbooks. This is especially pertinent in California, with all the changing employment laws. It is essential to ensure that every employee has the opportunity to know what’s expected of them and what they can and cannot do. Employee handbooks are particularly important because the terms of the handbook bind employees even when they do not have an employment contract.
The other issues we resolve are ongoing business operations, acquiring another business, acquiring a piece of real estate and things of that nature, which require some sort of written documentation. Then, on the back end part of that sort of operation, if you want to sell part of your business to a third party or you want to retire, we will handle all aspects of the negotiations with regard to either the purchase of your business or the sale of your business.
So, anything that has to do with the operational aspects or the transactional aspects of your business, or the purchase of other businesses or properties, is something that’s within the realm of our practice.
What Elements Must Be Present For A Contract To Be Valid And Legally Binding?
Contract law is pretty specific. You have to have:
- Properly identified parties
- A performance by those parties
- A definable date or period of time for that performance
- Consideration, which means both parties have to have some value-added
- Both parties willing and able to accept the terms of the contract.
If a contract doesn’t meet all of these qualifications, it may not be viable. For instance, a contract that is made with an incapacitated person or person that doesn’t really know what they’re doing may not be viable because both parties were not willing and able to accept the terms of the contract.
Another essential element of a contract is a plan for what we do in the event that there is a dispute, and how we avoid litigation. Typically, we put in some sort of mediation and arbitration clause that will prevent litigation and allow the parties to hopefully resolve their issues out of court.
Should Every Contract Be Drafted By A Qualified Business Law Attorney?
In my experience, every business contract should be drafted by a qualified business attorney.
Some people argue that other forms of contracts work just as well. Take, for instance, oral contracts. While an oral contract can definitely be legally binding, they often involve misunderstandings by one or both parties about what the contract actually entails.
For instance, one party might say, “I’m going to give you more of my business in the future. I’m going to give you a certain percentage of revenues”, but there’s no written documentation behind that promise. Typically, we want to define exactly what the specifics are with regard to the relationship between the two parties.
Some may also argue that it’s perfectly fine to draft your own business contract. However, when people draft their own contracts, they typically don’t account for a lot of the issues that we are trained as business attorneys to anticipate. These are things we know to look out for in the future, such as potential business disputes, the means of calculating proceeds received, and how to access and verify business-related information.
In addition, in the event that there is a dispute, you would run into several issues if you chose to draft your contract without an attorney. For one, there is an attorney’s fees provision that is required in California. If you don’t have an attorney, then you can’t get your attorney’s fees.
Another factor has to do with where a dispute might actually take place. If you’re doing business out of state, it may not be a given that California is the venue where the dispute will be resolved. If the other side has an attorney that argues for their home turf as the venue, you may end up flying somewhere else and spending a lot of money for legal counsel in another state.
A comprehensive contract addresses all of those issues and many of the other issues that business owners may not think about.
Additional Information On Contract Law In California
The only way to create a contract that really works for a business client is to take the time to consult with them and ask them about their needs, their business, the people they are doing business with, and what they actually want the contract to do.
We are a small firm, which means we take the extra time and extra care to find out exactly what is needed for each contract, as opposed to having an associate or paralegal interview the client and working from a template. I handle all the contracts myself, as well as all the discussions leading up to the drafting of the contracts. We make sure that we cover all the bases, which is essential to our process and the integrity of our services.
For more information on Business & Employment Contracts In California, an initial consultation is your next best step. Get the information and legal answers you are seeking by calling (949) 287-5558 today.