By Fred Reilly, American Attorney and English Solicitor.

Judgment debtors often think they can avoid payment of a judgment entered by a out-of-country foreign court by escaping and relocating their assets to Florida. They can run, but fortunately they can’t hide – there’s an important statutory process that enables creditors to enforce money judgments rendered by a foreign court in Florida.

The purpose of this article is to address the most important questions about enforcing an out-of-country foreign money judgment in Florida.

1. Can an out-of-country judgment rendered against a company or individual be enforced in Florida?

Yes. For example, a foreign money judgment entered in the United Kingdom against a company or individual (the judgment debtor) can be filed in Florida using the Uniform Out-Of-Country Foreign Money Judgment Recognition Act (“the Act“). Once properly filed, the judgment can be enforced against the Florida assets of the judgment debtor.

2. What is an “out-of-country foreign judgment”?

It is any judgment of a foreign state (e.g., the United Kingdom, Ireland, the Netherlands, etc.) granting or denying recovery of a sum of money, other than a judgment for taxes, a fine, or other penalty.

3. When does the Act apply?

The Act applies to any out-of-country foreign judgment that is final and conclusive and enforceable where rendered, even though an appeal may be pending or may be filed.

4. What is the process for obtaining recognition of an out-of-country judgment?

Florida law states that an out-of-country judgment is conclusive between the parties to the extent that it grants or denies recovery of a sum of money.

Florida’s statutory procedure for obtaining recognition of an out-of-country judgment requires that the judgment and an affidavit be filed with the clerk of the court and recorded in the public records in the county or counties where enforcement is sought.
After recording the judgment and affidavit, the clerk of the court mails a notice to the judgment debtor.

The judgment debtor has thirty (30) days after service of the notice to file an objection with the clerk specifying the grounds for non-recognition or non-enforceability.

Upon entry of a court order recognizing the out-of-country judgment or upon recording of a clerk’s certificate that no objection has been filed, the judgment shall be enforced in the same manner as if it was the judgment of a Florida court and shall create a lien on real estate in the county where recorded.

5. What are the grounds for non-recognition of an out-of-country judgment?

An out-of-country judgment is not conclusive if the judgment was rendered by an impartial tribunal, the foreign court did not have personal jurisdiction over the defendant, or the foreign court did not have jurisdiction over the subject matter.

There are eight (8) specific instances when an out-of-country judgment may not be recognized by a Florida court. The three most likely instances are that the judgment was obtained by fraud, the cause of action on which the judgment was based is repugnant to the public policy of Florida, and the judgment conflicts with another final and conclusive order.

6. What are the costs of this process?

The costs include the fees for filing/recording the judgment with the clerk of the court and the certified mail expenses of sending the mandatory notification to the judgment debtor.

Since the total attorney fees will largely depend on whether the judgment debtor fights the recognition process, I would charge my client on an hourly basis (US$247 per hour) and require a minimum retainer of US$2,500.

ABOUT THE AUTHOR

Fred Reilly’s law practice includes advising clients on international business transactions, corporations, contractual issues, real estate transactions, civil litigation and administrative proceedings.

Fred has been an attorney for more than 20 years. He is licensed to practice law in California, District of Columbia, Florida and as an English Solicitor. He has been admitted to practice before the United States Supreme Court and the United States Court of International Trade. Fred graduated from the London School of Economics and Political Science (LL.M. in International Business Law), Cumberland School of Law at Samford University (J.D. and Associate Editor of The Cumberland Law Review) and Purdue University (B.S. in Management). Fred spends time each month in Los Angeles and Central Florida. He is a member of The Beverly Hills Bar Association.

DISCLAIMER: This article and its content are intended to provide general information on legal topics and shall not serve as a solicitation for services in any jurisdiction where prohibited by law. This article is not, nor is it intended to be used as a substitute for legal advice. You should consult an attorney for individual advice concerning your own situation. Sending an email to the owner of this website, and receiving any response thereto, does not, in and of itself, create an attorney-client relationship.

© Copyright 2009 by Fred Reilly. All rights reserved.

By Fred Reilly, American Attorney and English Solicitor

Hiring an attorney is a very important decision. You may have heard all the horror stories about hiring an attorney, but it doesn’t mean that you’re destined to become one. Before you retain legal counsel, consider the following points.

1. Objective Advice. Will the attorney provide sound, objective advice? In order to render valuable, results-oriented advice, an attorney must first listen to the client, understand their goals and craft strategies that will result in the client’s success. How can an attorney (or anyone for that matter) provide a viable solution to your problem unless they first understand it?
2. Experience. Does the attorney possess the necessary experience and judgment to be effective in addressing your legal problem? Or does the attorney lack the knowledge, skills and seasoning necessary to handle your legal problem in an effective manner? Experience is invaluable when negotiating the terms of complex transactions, drafting precise legal documents and fashioning strategies for resolving acrimonious disputes.
3. Credentials. What are the attorney’s credentials? Has the attorney been trained to address the legal issues, negotiation strategies and unexpected complications that will arise? For example, not all American attorneys possess the educational background or professional qualifications necessary to advise clients on international business transactions or disputes. I received my Masters degree in International Business Law from the London School of Economics and Political Science. To better serve my international clients, I became a member of The Law Society. As an English Solicitor, I am very familiar with the legal issues that arise in international business law transactions and disputes.
4. Independent Advice. One of the foundations of an attorney-client relationship is the ethical obligation to provide clients with independent advice. Is the attorney committed to providing you with independent advice? Are there any potential conflicts of interest that may complicate the attorney’s ability to advise you in an independent manner?
5. Integrity. Is the attorney committed to representing the client in an ethical manner? Will the attorney treat the client and others with dignity and respect?
6. Work. Who will actually do the work on your case? Does the attorney himself – or a qualified associate – perform the legal services? Or does a partner bring in the client, then delegate the actual work to a junior associate and bill you at the partner’s higher hourly fee?
7. Access. How available is the attorney when you need to contact him? Can the attorney be reached by telephone, fax and email? Since I work with international clients, I use the leading low-cost internet-based technology (www.skype.com) to communicate with clients instead of expensive conventional international telecommunications (which are typically billed to the client). In addition, I use an email-enabled Blackberry to maintain accessibility.
8. Enthusiasm. Is the attorney enthusiastic about providing legal services to solve your problem or does your case represent just another paycheck?
9. Attention. Is the attorney so busy working on a multitude of cases that he’s simply unable to provide individuals with the personal service and care they deserve? Or does the attorney limit his services to a few select clients who receive the best service that he can offer?
10. Technologically Savvy. Does the attorney have the technical capability to conduct business in the Internet Age?
11. Efficiency. One of the maxims of the law is “Justice delayed is justice denied.” Inefficiency inevitably results in increased legal fees and expenses. Is the attorney committed to handling the client’s legal problem or dispute in an efficient manner that is mindful of the client’s expenditures of time, effort and money?
12. Fees and Expenses. Will the attorney charge the client fees and expenses in a straight-forward, fair manner? We’ve all heard horror stories about runaway attorney fees. Suffice it to say that I do not believe in charging clients for every paper clip.
13. Results-oriented. I have been a practicing attorney for more than 20 years. I’ve always viewed my role as attorney in the same light – maximize the client’s opportunities while seeking to minimize the client’s risks. I do not believe in complicating a client’s legal problem or dispute in order to charge additional legal fees. When I accept a client’s case, my objective is to help the client solve their problem. Period.

ABOUT THE AUTHOR

Fred Reilly’s law practice includes advising clients on international business transactions, corporations, contractual issues, real estate transactions, civil litigation and administrative proceedings.

Fred has been an attorney for more than 20 years. He is licensed to practice law in California, District of Columbia, Florida and as an English Solicitor. He has been admitted to practice before the United States Supreme Court and the United States Court of International Trade. Fred graduated from the London School of Economics and Political Science (LL.M. in International Business Law), Cumberland School of Law at Samford University (J.D. and Associate Editor of The Cumberland Law Review) and Purdue University (B.S. in Management). Fred spends time each month in Los Angeles and Central Florida. He is a member of The Beverly Hills Bar Association.

DISCLAIMER: This article and its content are intended to provide general information on legal topics and shall not serve as a solicitation for services in any jurisdiction where prohibited by law. This article is not, nor is it intended to be used as a substitute for legal advice. You should consult an attorney for individual advice concerning your own situation. Sending an email to the owner of this website, and receiving any response thereto, does not, in and of itself, create an attorney-client relationship.

© Copyright 2007 by Fred Reilly. All rights reserved.

By Fred Reilly, American Attorney and English Solicitor

Let’s face facts. In America, legal services are expensive. According to a 2003 survey by the U. S. Census Bureau, the estimated revenue for taxable employer firms that provided legal services (except notaries) was $185.5 Billion. That’s a lot of billable hours…

Did you hear about the Connecticut attorney who billed a 94-hour day during which he claimed to have reviewed 113 files, received 91 phone calls and wrote 72 letters? Fortunately, he got caught. In 2005, the U.S. Department of Justice prosecuted him for false and fraudulent claims for attorney fees. According to the allegations in the civil complaint, the attorney, among other things, engaged in double and triple billing, submitted inflated bills, and billed for time spent by support staff as if it was his own.

According to an article appearing in The Connecticut Law Tribune, during a two calendar year period, the attorney allegedly charged for more than 24 hours of work in a single day 135 times and charged for between 13 and 24 hours of work in a single day approximately 226 times. Ultimately, the attorney paid $1.24 Million to settle the case.

But the story doesn’t end there. Amazingly, the attorney was not disbarred and still practices law to this day! Although this is obviously an extreme case, it highlights why the general public harbors severe reservations about attorneys and the fees they charge.

Hiring an attorney is a very important decision. Controlling the cost of legal services is equally important and should never be ignored. Unless you understand how your attorney will be compensated and take the steps necessary to control their compensation, your attorney fee can quickly spiral out of control. Excessive attorney fees are usually the result of either unscrupulous attorneys or miscommunication between an attorney and client. With the cost of legal services escalating, you cannot afford to venture into the marketplace without ample knowledge to protect yourself. There is simply too much at stake.

As an attorney who’s actively practiced law for the past twenty years, I’ve met with countless people who absolutely expect to receive a raw deal whenever they seek the services of an attorney. As much as I dislike the practice, I recognize that excessive attorney fees are a fact of life for clients who don’t know how to protect themselves. I also recognize that ethical attorneys can be quite expensive and many consumers would benefit from inside information about how to control the cost of legal services.

In The Godfather, the immortal Mario Puzo made an observation that resonates with anyone who has ever hired an unscrupulous attorney. He said: “A lawyer with his briefcase can steal more than a hundred men with guns.”

Not all attorneys are hardwired to gouge you. Once you get beyond the public’s perception and lawyer jokes, most fair-minded clients would readily admit that the majority of attorneys are hardworking, ethical professionals who treat their clients with respect and fairness. But like any other profession, there are unscrupulous individuals who will gladly rip you off without a moment’s hesitation.

So how do you combat the unscrupulous? Knowledge of their methods is a great place to start. This article highlights the eight most common methods used by unscrupulous attorneys to gouge clients. Although this is not an all-inclusive list, it is comprehensive and addresses the most common methods that unscrupulous attorneys use to separate clients from their money. Ignore these at your peril!

1. The first method is intimidation and it’s one of the most powerful tools of the unscrupulous attorney. Both the attorney and client realize that the attorney is far more knowledgeable about the law and how to solve legal problems than the client. Let’s face it, if you could solve the problem on your own, you probably wouldn’t need the attorney’s expertise or incur the cost of hiring one. In addition, both the attorney and client realize the existence of an inherent difference in bargaining power that could easily be exploited by the attorney. Although an attorney has an ethical obligation to put the client’s best interests ahead of his own, the unscrupulous attorney rarely allows such ethical considerations to deter his greedy conduct. In any given situation, an unscrupulous attorney could provide a very impressive sounding explanation for taking certain action along with the express or implied admonition that your failure to follow their advice could result in disaster. Since the client is seldom qualified to accurately assess the legal ramifications and wants to rely on the attorney’s advice, the client feels that she has little choice but to acquiesce. If the unscrupulous attorney didn’t have the client’s best interests in mind, the client gets gouged.
2. The unscrupulous attorney preys on the client’s desire for retribution or revenge. Rather than counseling the client to resolve a legal problem in the most efficient, cost-effective manner, the unscrupulous attorney preys on a client’s desire to “get a pound of flesh.” Thus, the motivation behind strategic decisions is shifted from “how to best solve the problem” to “how to inflict as much pain, anguish and expense on the other party as possible.” When an unscrupulous attorney convinces a client to adopt a strategy defined by retribution and revenge, the legal problem inevitably becomes more complex and far more difficult to resolve. In addition, judges do not look kindly upon litigants who “play games” and effectively abuse the legal system for the sole purpose of poking a stick in someone’s eye.
3. The unscrupulous attorney never fully explains the basis for their fees and how fees will be calculated. Although it can be uncomfortable for both the attorney and client to discuss fees, it pays to have a candid discussion of fees at the outset of the engagement. Let’s face it, no one likes surprises – especially unexpected, mammoth bills. Due to the nature of the attorney client relationship, it is imperative that both parties openly communicate and trust each other. As a fiduciary, an attorney has an ethical obligation to explain the basis for their fees.
4. The unscrupulous attorney charges for work that was simply not done or grossly exaggerates the amount of time required for a task. As an attorney, I can assure you that clients frequently do not understand the time, effort and discipline that must be expended to resolve a legal problem. A scrupulous attorney who understands the complexities of a certain situation and has previously dealt with similar problems should be able to explain the pitfalls, uncertainties and logjams that can occur. Thus, a scrupulous attorney should be able to provide you with a good faith estimate of the time, effort and money needed to address a particular legal problem. An unscrupulous attorney will gloss over such details and purposely mislead the client. At the end of the day, the client doesn’t know what action was taken and is floored when they receive a grossly overstated statement for attorney fees. Frequently, the statement doesn’t itemize the work the attorney performed, but rather provides a summary such as “For services rendered” along with a staggering figure.
5. The unscrupulous attorney preys on the client’s insecurities and leads the client to believe that he cannot make any decision without the attorney’s express consent and blessing. In this manner, the unscrupulous attorney completely disregards his role as a specialist advisor to the client and assumes the role of the ultimate decision maker. Attorneys have an ethical obligation to place the client’s interest above their own. The unscrupulous attorney intentionally skirts or completely disregards ethical obligations that get in the way of charging excessive fees.
6. The unscrupulous attorney convinces the client that it is absolutely crucial to contest every point. Although I have a high regard for a client who insists on taking specific action “for the “principle of the thing” I will immediately advise the client that principles can become very expensive. A contract negotiation is a good example. Prior to entering a negotiation, the attorney and client should fully discuss the appropriate strategies to reach the desired outcome. When formulating your strategy, it is inevitable that some issues are far more important than others. In essence, each issue represents a bargaining chip. You must be prepared to give up some minor or insignificant chips in exchange for gaining other more important chips. Don’t allow your attorney to argue every issue that ever arises – especially if they’re billing you by the hour!
7. By making a legal dispute as acrimonious as possible, the unscrupulous attorney ensures that he’ll be intimately involved in even the simplest issues. In this way, an attorney is always generating extra work by constantly throwing gasoline on the fire. An attorney who encourages his client to be as unreasonable as possible is doing his client a disservice. For example, if a divorce proceeding has become so toxic that the two parents can only communicate through their attorneys, “simple” arrangements for a weekend visitation could easily escalate and cost in excess of $500.00 in attorney fees. This method of inflating the attorney fee is particularly insidious when the parties are financially unable to afford these additional expenses.
8. The unscrupulous attorney abuses the legal system. In the medical world, unscrupulous doctors order unnecessary tests. An unscrupulous attorney has a wide selection of procedural moves he can make to bog a case down in the legal system with the sole aim of increasing attorney fees. Common examples are conducting overzealous discovery, filing frivolous motions and setting unnecessary hearings. Since the attorney is far more familiar with procedural issues, the client usually operates at a distinct disadvantage and is rarely in a position to question the necessity of a specific procedural move.

Now you have the crucial information that will help protect you from one of the most loathsome predators on the face of the earth – the unscrupulous attorney!

ABOUT THE AUTHOR

Fred Reilly’s law practice includes advising clients on international business transactions, corporations, contractual issues, real estate transactions, civil litigation and administrative proceedings.

Fred has been an attorney for more than 20 years. He is licensed to practice law in California, District of Columbia, Florida and as an English Solicitor. He has been admitted to practice before the United States Supreme Court and the United States Court of International Trade. Fred graduated from the London School of Economics and Political Science (LL.M. in International Business Law), Cumberland School of Law at Samford University (J.D. and Associate Editor of The Cumberland Law Review) and Purdue University (B.S. in Management). Fred spends time each month in Los Angeles and Central Florida. He is a member of The Beverly Hills Bar Association.

DISCLAIMER: This article and its content are intended to provide general information on legal topics and shall not serve as a solicitation for services in any jurisdiction where prohibited by law. This article is not, nor is it intended to be used as a substitute for legal advice. You should consult an attorney for individual advice concerning your own situation. Sending an email to the owner of this website, and receiving any response thereto, does not, in and of itself, create an attorney-client relationship.

© Copyright 2007 by Fred Reilly. All rights reserved.

13 COSTLY MISTAKES WHEN NEGOTIATING CONTRACTS

By Fred Reilly, American Attorney and English Solicitor

The goal of the contract negotiation process is to produce a written document that addresses the relevant issues, terms, rights and obligations between two or more parties to the contract. Unfortunately, many negotiators make costly mistakes that ultimately come back to haunt them when a disagreement arises over how the contract should be interpreted or performed. This article will highlight thirteen common mistakes that could cost you a bundle.

1. Failure to define your negotiation strategy in advance. How can you effectively negotiate when you haven’t yet defined the purpose of your negotiation? Prior to entering negotiations, establish your objectives, identify possible points of contention, consider the impact of any time constraints and determine potential deal breakers. It’s also highly advisable to review your knowledge of the other party, their negotiator (your adversary’s style, tendencies and hot buttons) and the context in which the negotiation will take place (i.e., market conditions that impact the deal).
2. Failure to narrow the issues. After you’ve defined your negotiation strategy, address the issues that are crucial to your deal. During the negotiation, focus on resolving the key issues to your advantage or in a manner that you can live with after the deal has been struck. Be wary whenever your adversary focuses on minor or irrelevant points to the exclusion of the material issues. If it’s difficult to ever get to the substantive points, you’re in for a lengthy negotiation with an unacceptable outcome.
3. Failure to walk away. Some negotiators are afraid to say “No.” One of the soundest negotiation strategies is to reach the conclusion that no deal is better than a bad deal. If your adversary realizes that you are willing to break off negotiations and walk away, he is far more likely to negotiate in good faith and work towards an acceptable deal.
4. Failure to get a written document. Under most business circumstances, an oral contract will be enforceable. A notable exception is an oral real estate contract that violates the Statute of Frauds (which requires that certain contracts must be written). Although an oral contract may be enforceable, there’s always the evidentiary problem of how to prove the terms of the contract at a later date. One of the goals of your negotiation should be to generate a comprehensive written document that accurately describes the terms, rights and obligations of the parties in a manner that provides clarity about how the agreement will be interpreted and performed.
5. Blind reliance on a “standard contract.” When it comes to legal contracts, do not place blind reliance on a “standard contract.” Although standard contracts can be very useful, they simply do not fit every situation. People frequently want to use a “standard contract” because they don’t want to pay an attorney to draft a contract. This often results in a “penny wise and pound-foolish” scenario. Many of the standard contracts that you can purchase at an office supply store for a nominal amount are simply so vague that little protection is afforded and clarity is non-existent. Depending on your specific situation and the issues at stake in your contract, hiring an attorney to draft the contract may be the most cost-effective choice possible. As an alternative strategy, consider modifying a standard contract with specific provisions that closely fit your situation.
6. Failure to Properly Define the Parties. This mistake may seem elementary, but negotiators consistently get this one wrong. It is crucial to properly define the parties to a contract to ensure who will be liable for performing the obligations of the contract and liable in the event the contract is breached. You also need to ensure that the individual executing the contract has the appropriate authority to do so. For example, the President of a corporation will typically have authority to bind the corporation. Don’t be so certain that another officer within the corporation has the same authority to bind the corporation.
7. Using Inconsistent Terms. Once you’ve defined the parties, refer to them in a consistent manner throughout the contract. Do not refer to a “Buyer” in one provision and later refer to a “Purchaser.” Although seldom fatal, this mistake creates confusion and undermines the credibility of the contract. In some cases, this mistake may negatively impact how the contract will be interpreted.
8. The contract is not integrated. Whenever you cut and paste provisions from several model documents, there’s a danger that the new document will not be integrated. For example, references to subsequent provisions may be incorrect or the referenced provision may not even be present in the new document. No one wants a written contract with gaping holes.
9. Failure to get clarity on key issues. Clarity is extremely important when negotiating and drafting contracts. For example, a contract that requires one party to make payments to another party should clearly set forth the conditions that must be met to trigger the payment obligation. If the triggers (conditions) in the written contract are drafted in an ambiguous or vague manner, the payor could assert that the payment obligation has not yet arisen. Thus, this situation could ultimately leave the payee with no choice but to initiate a lawsuit to enforce the terms of the contract.
10. Failure to define those events that constitute breach of the contract. Like the triggers (conditions) mentioned above, it is important to define the specific events that constitute breach. Both parties need to establish the bright line between acceptable performance and unacceptable performance.
11. Failure to include safety-valve provisions. Since the parties have recognized the possibility that a breach may occur, it is highly advisable to contemplate a contractual provision that provides for a “cooling off” period during which they can attempt to resolve the conflict. This type of provision tempers a hothead’s tendency to dig in their heels and immediately initiate legal proceedings.
12. Failure to include a dispute resolution procedure. For many business transactions, mediation and arbitration represent viable dispute resolution procedures and should be considered when drafting the contract. It is imperative to define the procedure to be followed and especially how the mediator(s)/arbitrator(s) will be selected.
13. Failure to designate the applicable law and choice of forum. This common mistake is often simply overlooked. The applicable law governing the contract should be clearly stated. The choice of forum provision establishes the location where disputes will be adjudicated. Obviously, hostile and inconvenient forums should be avoided.

Avoiding these common mistakes will not eliminate all potential problems associated with a contract, but will substantially diminish the likelihood of a later dispute over interpretation or performance.

DISCLAIMER: This article and its content are intended to provide general information on legal topics and shall not serve as a solicitation for services in any jurisdiction where prohibited by law. This article is not, nor is it intended to be used as a substitute for legal advice. You should consult an attorney for individual advice concerning your own situation. Sending an email to the owner of this website, and receiving any response thereto, does not, in and of itself, create an attorney-client relationship.

© Copyright 2007 by Fred Reilly. All rights reserved.

9 FUNDAMENTAL DEAL POINTS THAT COULD ULTIMATELY DERAIL YOUR TRANSACTION

By Fred Reilly, American Attorney and English Solicitor

In every negotiation, there are fundamental deal points that must be addressed in order for the parties to have a clear understanding of the rights and obligations inherent in their transaction. Clarity is exceptionally important when drafting and later implementing contractual provisions. The purpose of this article is to highlight nine deal points that could derail your transaction unless handled properly.

Deal Point No. 1 – Defining the parties. I’m sure you’re thinking that defining the parties is a no-brainer, but this deal point is mishandled more often than you’d expect. Are you contracting with a sole proprietor, corporation, partnership, limited partnership, limited liability company or professional association? Who has the legal authority to bind the entity? The answer to these two questions will have a significant impact on how you will be able to enforce your agreement. Confirm the exact legal name of an entity by searching the website of the governmental department where the entity is incorporated or organized. For example, I frequently check the name and status of an entity by checking the websites for the Florida Department of State – Division of Corporation (www.sunbiz.org) or the California Secretary of State – Department of Corporations (www.corp.ca.gov).

Deal Point No. 2 – Financial terms. All parties want a clear understanding when it comes to financial terms. This is one deal point that can consistently derail a transaction. Ambiguity can result in disaster. Be specific. Whenever you refers to a dollar amount in a contract, do so both and numerically. For example, instead of writing “$100″ in an international contract, I typically write “One Hundred U.S. Dollars (US$ 100.00).” When you negotiate and draft the financial terms in a contract, always consider the possibility of alternative interpretations. I recommend that you be downright cynical in your evaluation of these terms because creative (and desperate) people will always look for an angle to delay or avoid their financial obligations if you give them any wiggle room.

Deal Point No. 3 – Triggers. There are terms in every contract that spell out what action must first take place in order for a subsequent obligation to arise. For example, upon delivery, the buyer is obligated to pay for the product. Make certain that these conditions precedent are clear and consistent. Eliminate wiggle room whenever possible. If the conditions are vague or inconsistent, you leave a crack in the door that can easily be exploited when it later becomes expedient to do so.

Deal Point No. 4 – Flexibility. If the terms of a deal are too rigid, you can reasonably expect problems when the parties are required to perform their obligations. Recognize – better yet anticipate that circumstances will change after the deal has been struck. When a breach of the contract occurs, I recommend that you make a business decision that focuses on the degree or severity of the breach. I typically advise clients to make a distinction between a material breach and a technical breach of the contract. A material breach requires that you take appropriate action to correct the problem. With a technical breach, your best solution may be to waive any objection and simply move on. It’s a question of degree and making a sound business decision.

Deal Point No. 5 – Timing. One of the most fundamental deal points of any transaction is the timing of the sequence of events that are embodied in the terms, rights and obligations of the agreement. Whenever possible, remove ambiguities as to when an obligation must be performed. Drafting these contractual provisions is a two-step function. Clearly define the obligation and give it a deadline. If you don’t, you’re vulnerable.

Deal Point No. 6 – What constitutes a breach? There should be a bright line between acceptable performance and failure of performance. In commercial transactions, both parties need certainty. Pay special attention to the contractual provisions that define actions that constitute violations of the agreement. When I draft a contract, I typically itemize each of these events as a separate and distinct item.

Deal Point No. 7 – Dispute resolution. When you enter negotiations, acknowledge the reality that the relationship or transaction may deteriorate to the point when the parties experience irreconcilable differences. You should address the preferential method for resolving a dispute at the negotiation stage. Failure to do so may leave you at the mercy of someone who has both a dispute and the resolve to put you through an extended ordeal. Mediation, arbitration and litigation all have their own unique advantages and disadvantages.

Deal Point No. 8 – Security and guarantee obligations. Enforcing a contract is often a matter of leverage. By including security and guarantee obligations in a contact, you can create substantial leverage points that could later prove to be invaluable. If the time ever comes for you to take legal action to protect your rights, you’ll want to have numerous ways to enforce your rights and recover damages for the other party’s violation of the agreement.

Deal Point No. 9 – Drafting the contract. This is a personal preference deal point, but I strongly recommend that you take the initiative when it comes to preparing the written contract to document your transaction. You are always in a stronger negotiating position when you set and control the agenda. This also forces the other party to respond to the points that you’ve presented. Whenever possible, I recommend that you avoid situations that give the other party control or an upper hand in the bargaining process.

DISCLAIMER: This article and its content are intended to provide general information on legal topics and shall not serve as a solicitation for services in any jurisdiction where prohibited by law. This article is not, nor is it intended to be used as a substitute for legal advice. You should consult an attorney for individual advice concerning your own situation. Sending an email to the owner of this website, and receiving any response thereto, does not, in and of itself, create an attorney-client relationship.

© Copyright 2007 by Fred Reilly. All rights reserved.