What Is a Business Contract Attorney
The role of a business contract attorney is to safeguard the interests of the business. While the primary function is to draft, review and negotiate contracts to achieve this goal, it is important when considering your business needs for the future, to ensure your attorney is qualified to practice commercial law.
That means they understand the business and commercial laws specific to the industry you are in.
Business contract lawyers are adept at understanding and interpreting contracts. Both state and federal laws govern contracts. Contracts in effect allow the parties to the contract to act outside the law if it is agreed upon in writing. An example is something like a partnership wherein , legally speaking each party has specific legal rights that pertain to the company and the other partners or company members.
However, there are written contracts pertaining to partnerships, shared ownerships and joint ventures and either can void the other or both can accompany the partnership. The legal versus the contractual; however, the language used in the agreement may have a different definition then the pre-conceived legal definitions. Having a business contract attorney with experience in your industry on your side while you’re negotiating your contracts could save you a lot of headache and money!
Top Reasons for Engaging a Business Contract Attorney
A business contract attorney is invaluable in today’s complex business world. This is particularly true when you are starting your own company and need guidance. Most entrepreneurs are surprised to learn that oral agreements have very little legal power these days. That makes having a business contract containing what was negotiated and agreed upon to be extremely important. Without a business contract, the only way you’ll be able to recover damages is if what has been agreed on has run afoul of the law somewhere. Most of the time, things are different once the ink is dry and the signatures are on the contracts. This is one of the reasons you should consult a business contract attorney to draft, review and/or update business contracts to ensure that the most up-to-date terms are being used. Of course, it also makes sense to consult a business contract attorney when you are presented with a contract by a vendor or third party. Their expertise in the field can make all the difference when signing contracts for products or services you need in order to run your business. Hiring a business contract attorney from the beginning helps eliminate the risk of missed opportunities and "near misses" where you weren’t cheated or robbed blind, but you could have and just happened to get lucky this time. As contract specialists, they can help you ensure that what you want, need or expect is included in the contract you agree to. The last thing you want is to be taken advantage of by someone who knows more about business contracts than you do. In fact, that happens more often than you might think, so it’s important to have the right legal help on your side from the start.
Types of Business Contracts
A business contract attorney can assist companies with a variety of different contracts. Some of the most common types include:
Partnership agreements- Creating a partnership contract is one of the most important tasks for people starting a new business. The agreement should include information about the ownership structure, how profits and losses will be allocated among the partners, and how the partnership can be dissolved.
Employment contracts- It is a bit unusual for small businesses to have a formal contract with employees. However, it can be a good idea if you have employees who are highly skilled or otherwise help drive the company’s success.
Non-disclosure agreements- A non-disclosure agreement (NDA), or confidentiality agreement tells employees not to divulge any trade secrets or other confidential information they see or hear at the company. If you need employees to keep a corporate secret confidential, ask a business contract attorney to help draft an NDA.
Non-compete agreements- Companies big and small often put non-compete clauses in the contracts of their key employees. These clauses prevent employees from working for a competitor for some period of time after they leave the company.
Independent contractor agreements- If you hire anyone as an independent contractor, rather than an employee, it is important to have a written agreement. Issues to address in an independent contractor contract can include the following:
Sales agreements- A sales agreement can protect your business in several ways. First of all, it gets the details of the transaction down on paper. Second, it can limit the buyer’s remedies in case something goes wrong. Third, it can provide for the return of items for repair or replacement.
Supplier contracts- Supplier contracts can cover everything from office supplies to raw materials. If you need to purchase a lot of something to keep your business running, a contract with the supplier can be helpful in several ways. First, it allows you to renegotiate the terms of the contract ahead of time, rather than when you need something right away. Second, it can limit the liability of the company in case something goes wrong with the supplies.
Leases- Renting or leasing a space can be confusing. A lease agreement clearly sets out what parties to the lease can expect from one another. It can also provide for contingencies that can crop up when you least expect them.
Loan agreements- When a business borrows money, it usually has to sign a loan agreement. The loan agreement lays out all of the terms of the loan, helps the parties understand their rights, and sets forth the consequences of default.
Franchise agreements- The franchise agreement tells the franchisee what he or she needs to do to stay in compliance with the rules of the franchisor. Franchise agreements typically include information about the following:
Licensing agreements- Licensing agreements are sought frequently by people who want to use a company’s specific product design or technology. For example, Cisco licenses its voice over IP technology. A licensing agreement can protect your intellectual property in two ways. First, it keeps someone from using it without your knowledge. Second, it protects you from liability in the event someone else abuses it (the person using the license will have to indemnify you for any harm that they cause using your technology).
The Contract Negotiation Process
The process of negotiating a new contract with another business or individual often involves lengthy discussions between the contract parties before they can agree on all terms. The process looks different for every negotiation, but generally the parties will each make a counter-offer after receiving the original offer of terms from the other party. For negotiations that involve significant sums of money or sensitive terms, it is not uncommon to go back and forth several times before the parties are ready to sign. During the negotiation process, your attorney will help you review the other party’s proposal to ensure you understand each term and to establish which terms might be advantageous to your company. Through this process, your lawyer will work with you to develop a response to the counter-offer that you will deliver to the other party. This response will indicate those terms with which you agree, as well as those with which you disagree that you believe could be changed during future discussions. After sending the response, you and your attorney will work together to prepare for any follow-up discussions. Throughout the negotiation period, you have direct access to your lawyer to discuss how the negotiation is progressing at any time you wish . Having a business contract attorney to assist you through this process has several advantages. First, it ensures your business has a qualified expert on hand throughout the negotiation process. Many business owners do not have the legal knowledge to competently negotiate a contract. Having an expert in this area on your side increases the odds of your company obtaining favorable terms. Second, having a business contract attorney manage the negotiation process can allow you to focus on more important matters within your business. Negotiating with another business can consume a considerable amount of time, and while your company is in negotiations it may have limited ability to pursue other opportunities in the marketplace. When your lawyer manages these conversations for you, you free up valuable time to devote to your other responsibilities. Finally, having an attorney involved during the negotiation process can help you maintain a positive working relationship with the other business. Contract negotiations can be a tense experience, and allow every party to hear the official stance of the other party directly from their lawyer can help ease some of the tension and allow the conversation to move forward to conclusions.
How To Choose Your Business Contract Attorney
Selecting the right business contract attorney is crucial to protecting your company’s interests and ensuring that you have a comprehensive and enforceable contract as the foundation for your business relationships. When you are looking for someone to handle your contracts, you want someone who is experienced and knowledgeable not only in contracts, but specifically in the type of contract you are seeking legal assistance for.
In addition to seeking out an experienced lawyer, it is important to look for someone who has the time, energy and desire to devote to your business. If you want a lawyer to invest time into understanding your business and to really become your business ally, then you need to look for an attorney who enjoys that role. Otherwise, you may find yourself getting shortchanged or getting inadequate answers simply because your lawyer is too busy with other clients to give you the time you need.
When you conduct interviews with potential contract attorneys, be ready to answer numerous questions about your business . An attorney who is willing to learn about your business demonstrates a commitment to doing a good job for you. If the lawyer you hire does not know much about your business, he or she may not be able to help you very well, since the facts of your business situation will necessarily play a role in the legal advice given.
Testimonials from other entrepreneurs can also be useful for helping you to choose the right business contract attorney for your company. You can ask the attorney if he or she can put you in touch with current client businesses for further insight into how the lawyer works and how the lawyer’s services have benefitted other companies.
If you are unsure about the types of questions to ask in an interview, you can always look online for some sample queries to get you started. From there, feel free to adapt any questions from the list or add in your own original questions to dig deeper into the qualities you are looking for when hiring a business contract attorney.