The Court Of Public Opinion

In this economy, you may think twice before consulting an attorney to avoid the fees. Sometimes thats a good idea. Sometimes its not and can cost you lots more in future litigation. Here are some basic guidelines relating to two important issues contracts and insurance - to help decide when to use an attorney and how to use them efficiently.

Contracts.

A good contract is the basis for any smooth business relationship. Contracts are essential. Not only do they clarify roles, responsibilities and ownership issues, they limit potential liability. Attorneys can help you draw up a contract that covers all your bases, but if you want to use your attorney efficiently, do some homework first.

Sit down and in your own words define the relationship youre setting up and describe those who youre setting it up with. Anticipate industry-specific issues that affect your risks and liabilities in the contract. Point out best and worst-case scenarios that affect the success of your product and how that will affect the contracted parties. Address ownership issues. Now set up a meeting with your lawyer.

You may think that signing a contract is a simple proposition. Just read what it says. Wrong! Its not only what a contract says, but rather what it doesnt say that matters. A contract can be deliberately written to be ambiguous and open to various interpretations, which are not always in your favor. Often, you are so personally involved in the contract negotiations agreeing to amendments, changing clauses day by day that you feel that after all the discussion, it MUST be right. Before you sign, have an attorney look at it. What you gain from an objective eye is far greater than what you pay in fees. You can add protective steps to your contracts, which may help in cases that lead to litigation. Include a provision in contracts that states that if you need to sue, legal fees are recoverable for non-performance or payment. You will probably have to include a reciprocal clause for the other party. You could also include a dispute resolution clause that specifies the use of binding arbitration. You can even specify a mutually agreed upon arbitrator in advance.

Insurance

Whether youre buying or renewing insurance be wary! Dont be intimidated by complicated language. Ask all the questions you need to thoroughly understand your policy. If your policy is just incomprehensible, ask your agent to suggest a plain language policy.

Legally, any renewal is considered a new contract. Dont assume you are getting the same coverage! Read the renewal policy carefully. Ask your agent to confirm in writing whether there are any changes in the renewed policy, and, if so, then what are they so that you are not surprised after a loss.

If a claim is filed against you, immediately notify your insurance company and agent by certified letter, even if you dont think youre covered. This is your responsibility. Failure to notify your insurer of an insurance claim is a cause for non-payment of your claim.

If your insurance company or broker denies claim coverage, contact an attorney. Dont try to negotiate on your own. It is our experience that insurance companies deny responsibility too frequently. An initial denial of your claim my simply be a negotiating tactic.

If you have a dispute with your insurance company, consult your policy to find out how much time you have to start a lawsuit and contact an attorney well before that time expires.

Remember, the money you spend now for legal fees to prevent future problems is a drop in the bucket compared to the fees you will pay in future litigation. If you use your attorney wisely, it could be one of the best investments you make.

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At the foundation of every legal transaction is the document known as a contract. Here is a guide to this document, why it is important and why you should use it.

The Basic Elements of Contracts

For as long as we can remember, things have been accomplished by agreement. At one time, a persons handshake was good enough to cement that agreement. In these more hectic times, that is no longer the case. To bind someone to an agreement, a written contract is needed.

At its core, a contract is simply an agreement between two parties. One party agrees to do something in exchange for the other party doing something. In most instances, this involves one party paying money to the other in exchange for something. A classic example would be a real estate transaction. I agree to pay you $300,000 in exchange for you transferring the home to me. Obviously, there is more a real estate agreement, but this is the basic idea.

The courts have very particular views about the enforcement of contracts. Simply put, they almost always enforce them. If they did not, the entire business world would be rocked to its foundations. If you cannot count on the other party doing something, how can you possible do business? Imagine if you made widgets and a large retailer ordered a huge amount after signing a contract to pay you an equally large amount. What if the retailer than decided not to go forward and didnt pay? You would be stuck with a huge inventory, no revenues and probably go out of business. With a contract, you can go to court and force the retailer to honor the terms of the contract, to wit, pay you and take the product. This is the beauty of a contract.

For contracts to be enforced, they need to be in writing. If you reach an oral agreement with another party, it means little. The reason this is the case is it is very difficult to tell which party is telling the truth about whether there was an agreement and, if so, what the terms were. The courts feel so strongly about this that there is a body of law known as the Statute of Frauds. Although it differs from state to state, the basic premise is any agreement exceeding $500 must be in writing to be enforced. Obviously, there are exceptions to this rule, but they are few.

A contract is a critical weapon in the arsenal of any business. Oral agreements mean nothing these days, so make sure it is in writing to protect yourself.

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For many people, the court system might as well be a maze. When it comes to a business dispute over a contract, the court system works in a particular manner.

What Courts Hear Contract Disputes?

The court system in the United States actually makes a lot of logical sense if you understand the terminology used. Well, if you are an attorney. The system is broken down by subject matter and then categorized by objective issues like the amount of damages being claimed. Common court branches include criminal, civil and family law divisions to mention just a few.

What court hears business contract disputes? Contract issues are covered under a set of laws known as civil law. If you have been in a lawsuit, you know it is rarely civil! The term, instead, refers to the matter being monetary in nature. At its root, the dispute has money at issue. Contract disputes fall within the business law and civil court jurisdiction. Ah, but there is more.

While civil courts hear contract disputes, the specific court is determined by the amount of money at issue. The exact amounts differ by state, but generally there are three levels. Small claims civil courts decide matters under $5,000 or so and you are not allowed to use an attorney. These are the disputes you see on television. Municipal civil courts usually hear contract disputes that have monetary values above small claims levels but below $25,000. If the claim involves an amount over $25,000, then it is heard in superior court.

Before heading off to court, it is important that you first read the contract in question very closely. Most contracts these days contain arbitration clauses. Arbitration is an effort to resolve things without taking up the time and resources of the court system. If you have such a clause, the parties typically agree to have a retired judge here the dispute and render a judgment in favor of one party.

Business contract disputes happen each and every day. Civil courts are usually going to handle them, but make sure you to check for arbitration clauses.

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