Contracts, Licenses, Non-Compete, Non-Disclosure Agreements
All contracts should be designed to eliminate future disagreements between business partners.
Most people understand that a contract should define the duties that each party to the contract has, but quite often, people don’t realize that a contract should also regulate how the parties will fight about disagreements, where a suit on the contract should be filed, or whether binding arbitration should be part of the process.
Generic Contracts Often Worthless
Because readers of this web site tend to be business people and more technically adept individuals, one other word of caution is in order.
Random contracts you find on the Internet may be useless to you. To be sure, they are written; which is nice. They look good. But they are not the right price, in that they may be the most expensive document you ever used. A contract that does not have the clauses in it that you need, or does not follow state law, or worse – has clauses in it that you don’t want – can be the difference between a successful business and closing your doors.
In contract disputes, Texas courts tend to want to find a contract. And take note, oral contracts are perfectly enforceable, subject to several important exceptions.
Some of these important exceptions include: a) contracts concerning real property, b) contracts requiring more than one year to fulfill, and c) contracts in which you are going to be responsible for the debts of someone else.
Non-Disclosure and Non-Compete Agreements
Of course, your specific details matter, and this web page is designed only to help you identify your need for someone in our office to help you design a cost-effective document that does the job, and no more. For example, we have clients who come to our office looking for a non-compete or non-disclosure agreement.
They don’t want to talk about the details, or pay more than the initial consultation fee. What they don’t realize is that a document should be “right-sized” for the application. If you are providing a non-disclosure agreement to your welding shop which is making your prototypes, you want a different document from the document that you are signing as a contractor of a local major aircraft manufacturer. Getting it wrong can be very expensive.
For non-disclosure and non-compete agreements, the terms must be reasonable. For example, an agreement saying that you can never act as a real estate agent in Texas after you leave a real estate office is probably unenforceable. However, an agreement that you can’t open a shop across the street for at least six months probably will be. This is a continually evolving area of law, and drafting these documents yourself is a bad idea.
Licensing of Intellectual Property
Licensing of intellectual property, which could include a patent, a song, a book, a trademark, or even some technical know-how not generally understood, is a major place where failure to correctly draft a document can be disastrous. For budding artists, you should at least see an attorney so you understand the ramifications of a “contract that all our artists sign” (as it is typically put). To do otherwise is to wind up like the artist formally known as Prince, trying to escape a contract with a farcical symbol as your name.
The biggest mistake that our office sees, day in and day out, are contracts that are never put on paper; or are modified by the behavior of the parties to the contract and never quite officially changed. This is a great recipe for financial disaster and law suits.
Protect Yourself in Business Transactions
If you are loaning money to a friend, or a child – or you are going into business of any sort, with anyone – come see us first!
Call us at 817-704-3984.