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Avoid Conflicts - Contract Elements with Chad Belville

Avoid Conflicts - Contract Elements with Chad Belville

April 23, 2008
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One of the keys to avoiding conflict, especially with contractual partners, is to plan ahead - and make certain the foundation of what we build together is as stable, comprehensive and complete as possible. Like so many scenarios I’ve discussed in this blog, we’ve heard variations of all of this before and most is just good common sense, but we can never hear these things enough and we still sometimes resist putting them into practice. I recently had the opportunity to speak with my friend Chad Belville who shared quite a bit of information on creating and surviving a contractual relationship!

Chad’s job is to keep people OUT of trouble and that’s his focus. Visit his site at: ChadKnowsLaw. He is Senior Counsel to Kink.com and practices in the areas of Adult Entertainment Law, Internet Law, 2257 Compliance, and Contract Law.


Meeting of the Minds – Agreement!

Offer and acceptance:
- A counter offer is a new offer.
Mutual Consideration.
- Both sides give something of value.
Performance or delivery.
- Somebody does something according to the agreement.
Not against public policy.
- You cannot have a binding contract for an illegal purpose.

Put things in Writing
You do not need a lawyer to write a simple contract.
A simple contract you write yourself is always better than a verbal agreement if it contains all the elements of a contract.

The truth about oral contracts:
Remember, an oral agreement is worth the paper it is written on.
Memories of each party can be different.
An agreement on a bar napkin can be a contract, if it has all of the elements.


Conflict Avoidance
- Start by working with people you trust.

Too often when considering the elements of a good contract we are focused on all the upside project potential:
Everybody is excited about the new project.
Expectation is for success, never failure.
Everybody is willing to give 100%.

Unfortunately, the best contracts must deal well with… When things go wrong...
Plan ahead for pitfalls.
Consider what can go wrong.
Decide how to handle failures and setbacks.

Communicate when the First Thing Goes Wrong
  • Address the problem.
  • Look to your contract for the method.
  • Review the agreement and revise if necessary.
  • Use the terms of the original contract to resolve the problem.
  • Keep calm.

Contracts must also address all the potential negative issues:
  • Can one party decide to terminate the agreement?
  • If one party wants out, will the purpose of the agreement be destroyed?
  • Fights do happen.


Termination of the Agreement

- Best solution because all sides agree and are part of the resolution.
- Like mini-court.
- Quicker and easier.
- Lower attorney fees than going to court.

Included must be defining procedures for the worst possible outcome – the end:
How do you split up the assets?
How do you split up the liabilities?
Some assets and liabilities are brought in by the parties…
Some assets and liabilities are assumed during the agreement…

The Courtroom
Last Resort.
Must file a complaint.
Must go through discovery.
Motions for Summary Judgment.
Preparation for trial.
Jury trials and Bench Trials.
Paying those damn lawyers.

Get it in writing.
Address possible bad outcomes.
Imagine writing a pre-nuptial agreement.
Address problems early.
Keep communication open.
Try mediation, then arbitration, or as a last resort go to court.

Complementary Post
You Get What You Negotiate

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