Monday, December 9, 2013

Contract Law 201: When to hire an attorney

Law school training and real-world legal experience can pay dividends in complex contract drafting and negotiation.  In my previous post, I explained the contract basics every business person should understand.  In this post, I provide some examples of when you should not go it alone, but instead pick up the phone and call an attorney for help.
1. Should the contract be in writing?  Some contracts are unenforceable unless they are in writing.  Nearly every state has a "statute of frauds" that requires a contract to be in writing if certain factors are present.  An attorney knows or can research these factors.  In Indiana, for example, no contract for the sale of land is valid unless it is written out and signed by the seller.  I.C. 32-21-1-1.  The same is true of a lease greater than three years or deed conveying land.  No writing, no signature, no contract.
2. Are you worried the other side might default?   If you have serious concerns that the other party may not honor the terms of the deal, you may want to hire an attorney to draft your contract.   When a contract is litigated, the court will concern itself primarily with the contract and not the other “understandings” or discussions between the parties.  Likewise, no contract is 100% bankruptcy-proof.  You cannot avoid messy bankruptcy litigation merely by putting language in the contract that bankruptcy equals default.  Only a bankruptcy judge can make that determination. 
3. Do you need to secure an interest in goods or real estate?  If you are selling something and expecting payment later, you will want to make sure you retain a security interest in the goods or real estate you are selling.  This requires filing a lien or mortgage, typically not a DIY project. 
4. Is the contract in a specialized area of law?   Certain areas of law are fraught with pitfalls to those who do not regularly practice in that area.  Insurance, patents, intellectual property, estate planning, real estate, etc.  Attorneys that regularly practice in specialty areas know the most recent cases and statutes affecting those areas.  This is essential knowledge for contract drafting and negotiation.  
When the stakes are high and there is a lot on the line, hiring an experienced attorney is a smart business decision.  It is a means to reduce risk and increase the chance of success.    

2 comments:

  1. This is a great article. It is always important to do a lot of research before choosing a lawyer to represent you. You have to make sure they fit your cause and will be honest with you up front. I have a legal case where I needed to find a lawyer. I decided to do a lot of research on Marshall Davis Brown because I have heard great things about him. However, it is still vital that you make sure his experience fits your case.

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  2. Hiring an experienced attorney or business lawyer is always a smart business decision because they help in solving each business disputes. They help in making business contract and policies, they help in protect your business's valuable asset, they help in choosing a right business name under trademark act, they help in finance and banking services. You can see more services here http//www.sor-solicitors.ie/corporate-lawyer-solicitors-law-firm.asp. Business lawyer is a vital part of a business to make it successful.

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