1. Due this Week  Turn in Week 5 Time Sheet ◦ 9/15 – 21/2013  Turn in Workplace Safety Work Sheet Past Work Past Due  Work Permit Application  Student Profile  Training Plan and Agreement  Map to Workplace  Join WEE group on MyBigCampus This is Week 6  Time Sheet 9/22 – 28/2013  Business Contracts

2. Practical Legal Considerations

3.  An agreement between two or more parties that is legally binding  The basic elements of a contract include the offer, the acceptance and exchange of consideration  Contracts can be oral or they can be written

4.  Offer – one party must clearly make an offer of something, usually a service or a good, to another party in exchange for consideration  Acceptance – one party must clearly accept the offer, usually done in writing and by payment  Consideration – the exchange of value in the contract (i.e., services in exchange for cash payment as opposed to a “gift”)  In the case of the offer and acceptance, both parties must have legal competence to enter the contract (be of sound mind, not a minor and have authority to contract)

5. 5  A legally recognized offer and an acceptance creates a “meeting of the minds’, or mutual assent, between the parties.  Mutual Assent requires the presence of the following factors: 1.Both parties must exhibit a “contractual intent” [words spoken in jest or frustration will lack the requisite intent]; 2.The terms of the offer must be clear and definite; 3.The acceptance must be clearly communicated.

6.  Avoid oral “handshake” contracts  Oral contracts can be binding but terms are difficult to prove  Common in small businesses  Excuses for Oral Contracts: ◦ (i) too busy; ◦ (ii) trust the other party; ◦ (iii) too complicated; ◦ (iv) other party will not agree to written contract  Oral contracts may be unenforceable, particularly where the contract concerns ◦ (i) sale of land, ◦ (ii) sale of goods in excess of $500, ◦ (iii) divorce agreements, and ◦ (iv) long term exchanges of services/goods

7.  The interests of your business can be protected by written contracts  Written contracts can reduce/eliminate confusion as to terms with vendors, clients, partners, employees and investors  Your business contracts should be complete, clear and cover your interests

8.  Business contracts cover all aspects of business relationships, including those with clients, employees, investors and partners  Employee Contracts: protects business interest by clearly spelling out terms of employee/employer relationship including salary, benefits, job responsibilities, employment “at will”, etc.  Sales/Service Contracts: spells out terms of sale of goods or services, payment terms, warranties, rights and obligations of parties, etc.  Non-Compete/Confidentiality Contracts: protects confidential information of business including client lists, inventions, trade secrets, etc., must be reasonable as to time, place and scope

9.  When drafting a contract, protect your interests  Well drafted contracts are complete – clearly describing the transaction and the mutual understanding of the parties  Well drafted contracts are understandable – terms are clear and rights and obligations of the parties are set forth in understandable terms  Well drafted contracts are to the point – the contract should not concern unrelated matters and be duplicitous but should cover all material terms in a concise matter (the length of a contract should not be a benchmark of its quality)

10.  When entering into a contract, consider the following: (i) Does the contract clearly describe your obligations? (ii) Does the contract clearly describe the other party’s obligations? (iii) Does the contract clearly establish payment terms? (iv) Does the contract clearly establish time frames and default provisions? (v) Does the contract limit liability; discuss dispute resolution, choice of law, etc. (vi) Can you live with this contract?

11.  When given the opportunity, it is generally best to draft the contract  Drafting the contract gives you control over the negotiations in shaping the contract and the deal  Can be time consuming but allows you to define the issues, identify the transaction, set the terms, structure the deal on your terms, avoid delay in reviewing and commenting on the other party’s draft  Keep in mind that contract provisions are generally construed against the draftsman  Start with forms but do not be controlled by them

12.  Form contracts or “standard” contracts are useful for repeated transactions  Take the time to draft a form contract that protects your interests and is clear and complete  Consult with an attorney to assist in the preparation of form contracts  Do not become reliant on form contracts, one size does not fit all

13.  If you are not drafting the contract, you should have an opportunity to review the contract provided by the other party Review should include:  (i) careful reading of all contract terms (numerous readings may be necessary);  (ii) comment on terms that appear ambiguous, confusing or vague;  (iii) addition of terms that should be added;  (iv) assurance that your comments have been reflected in final draft; and  (v) record of contract review and edits.

14.  Contracts include numerous common provisions including but not limited to: ◦ (i) Term of Contract; ◦ (ii) Compensation; ◦ (iii) Description of goods or services; ◦ (iv) Warranties and Disclaimers; ◦ (v) Dispute Resolution; ◦ (vi) Default Provisions and Damages; ◦ (vii) Attorneys Fees;

15. Remember the importance of your contracts – they define the rights and obligations of your business