dissecting business ks
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Presented by: Dar’shun Kendrick, Esq.Owner of Kendrick Law Practice (“KLP”), LLC
(678) 739-8109 [office]Monday-Friday; 8-6 pm
About MeGraduate of Oglethorpe University,double major (Atlanta, GA)- 2004Graduate of Univ. of GA, School of Law
(Athens, GA)- 2007Graduate of Kennesaw State University,
M.B.A. (Kennesaw, GA)- 2011I practiced for two (2) years at a downtown
law firm as a civil business litigator for large clients.
Presentation Overview1. 10 common terms used in business contracts;2. General tips regarding business contracts.3. *I will answer general questions about provisions/terms not
covered however you may call my office for a follow-up. Disclaimers:
Limit of Practice: I am ONLY authorized to practice law in Georgia. What I say during this presentation ONLY should be applied as to Georgia businesses and no other U.S. state or territory.
Attorney-Client Relationship: Q & A will be at the end. I will only answer general questions, not specific questions. Please call the office to set up a FREE 15 min. business legal consultation for specific questions.
Limit of Presentation: I am only telling you what specific, isolated provisions of a business contract generally mean; I am NOT giving you a full interpretation for your whole contract on which you are entitled to rely because I have not seen ANY of the language in your entire contract. KLP does offer document drafting and review services. (Discussed later)
10 Common Business Contract Terms
1. Arbitration Clause2. “Time is of the
Essence” language3. Indemnification
Clause4. Merger/Integration
Clause5. Subrogation Clause
6. Warranties & Representations
7. Covenants not to compete/Non-compete clauses
8. Liquidated Damages9. Forum Selection
Clause10. Guarantor/Surety
Arbitration ClausesDefinition- Clause that requires the parties to resolve their
disputes outside of court through a third party, an arbitrator.
Points to Consider:1. The Federal Arbitration Act2. Combination with Forum Selection Clauses3. Unbiased arbitrator In GA…1. Appeal is possible2. Discovery still mandated3. Award must be in writing
“Time is of the essence”Definition- It means that parties to a contract
MUST perform by the time indicated in the contract if a delay would cause material harm.
Points to Consider1.“Reasonable time” language (v. this language)2.Written waiver3.There MUST be specific, stated dates/times.In GA….- The strict requirements of “time of the
essence” can be WAIVED by conduct.
Indemnification Clause Definition- Payment of money from one party
(payor) to another (payee) even though the payor may not have caused the loss suffered by the payee.
Points to Consider
1.Indemnification is voluntary.
2.Indemnification is primary (even as to a guarantor).
In GA….- The words of a contract of indemnification are construed AGAINST the indemnitee.
Integration/Merger ClauseDefinition- This is a clause, usually at the end of a
contract, that states that this agreement encompasses all the terms and conditions of the agreement (i.e., no oral or outside agreements have been made.)
Points to Consider1.What does this clause mean2.Parol Evidence Rule3.Magic languageIn GA….- Like “time is of the essence” language,
this can be WAIVED.
SubrogationDefinition: Describes the situation where one party
steps into the shoes of another to obtain the same rights and benefits as this party against a third party.
Points to Consider:1.Common Example2.Insurance policies3.Technical area of lawIn GA..1.Can be waived in lease agreements and2.UM coverage.
Warranties & Representations
Definition- A guarantee, assurance or promise that a product or service works as stated or implied by law.
Points to Consider1.Two definitions of warranties2.Numerous types of warranties3.The UCC (Uniform Commercial Code)In GA…- UCC has been adopted.
Non-Compete Clause or Covenant Not to Compete
Definition- Term used in contract law under which one party agrees not to pursue a similar profession or trade in competition against another (usually an employer).
Points to Consider1.Public policy2.Must be in writing3.Must be NARROWIn GA…- Not a “blue pencil” state!
Liquidated DamagesDefinition- These are damages whose amount
has been placed in a contract by the parties for the injured party to collect upon breach.
Points to Consider1.Two criteria2.Example3.Vs. Unliquidated damagesIn GA…- Three distinct criteria.
Forum Selection ClauseDefinition- Tells what jurisdiction
(state/country) a case will be litigated or kind of dispute resolution process to be used or both.
Points to Consider1.Conflict of Laws provisionIn GA…- Burden is on the Plaintiff.
Surety/GuarantorDefinition- It’s a person (or company)
(guarantor/surety) who agrees to be responsible for the debt or obligation of another called the “principal” to the guarantee.
Points to Consider1.Statute of Frauds2.Subrogation3.TermsIn GA…- Subrogation is allowed.
General Business Contract Tips: BEFORE YOU SIGN…
1. Make sure you have ALL the pages to a contract—generally signature last page.
2. Make sure the ESSENTIAL terms are in the contract.
3. BEWARE: Contracts based in Georgia are construed AGAINST the drafter!
4. Make sure the contract has the signature line in your OFFICIAL capacity with your company, otherwise you could become a personal guarantor.
5. Save revisions of a contract as well as any other correspondence during the contract process (emails, faxes, tweets, etc.)
6. Make sure the other side has authority to bind.
7. Make sure your attorney understands the UCC Article 2 and can explain to you.
8. Read! Read! Read!9. Ask Questions! Ask
Questions! Ask Questions!10. Under GA law, businesses
MUST be represented by Counsel.
