1. Commercial Law Programme
Introduction to Business Law
Craig Owen White
Hahn Loeser & Parks LLP
© 2011 by Craig Owen White
All Right Reserved

2. DISCLOSURES
In compliance with requirements imposed by the US Internal Revenue Service, we inform you that any Federal tax advice contained in this communication (or any handouts or downloads associated herewith) is not intended to be used, and cannot be used, for the purpose of (i) avoiding any penalties under the US Internal Revenue Code, or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein.
Nothing contained in this presentation is to be considered as the rendering of legal advice for specific cases, and attendees are responsible for obtaining such advice from their own legal counsel.
This presentation is for educational and informational purposes only. The views of the presenter should not be construed as gospel or the views of Hahn Loeser & Parks LLP or any of its individual partners. Anyone who says differently is itching for a fight.

3. BUSINESS LAW

4. Craig Owen White, Esq. Practicing For 27 years
Williams College, BA, Economics
University of Virginia, JD
Senior Partner, Hahn Loeser & Parks, LLP – Cleveland, Ohio
150 lawyers
6 offices
Co-Chair HLP Business Practice since 2008
ABA – Commission on Corporate Laws
ISLP board of directors and volunteer since 2005

5. BUSINESS of LAW

6. Course Overview - Tuesday
Morning Session
9:00 – 10:30 - Participant Self - Introductions
Introduction to Business Law
10:30 – 11:00 Tea Break
11: :30 Optimal Form of Business Enterprises
12: :00 Questions and Answers

7. Course Overview - Tuesday
Afternoon Session
2:00 – 3: Introduction to Business Financial Statements and Capitalization
3: : Shareholders Rights and Agreements
4: : Questions and Answers

8. USEFUL RESOURCES www.islp.org/2011/BlaLogin.html Case Study
Shareholders Agreement (Word format)
Transaction Checklist (Word Format)
Power Point Presentations

9. Useful Resources

10. US Business Failure Rate
Only 29% Survive 10 years

11. Typical Business Transaction
Buyer wants goods or services
Delivered at a specified time and place
At a specified price
That meet specifications
Seller willing to sell or provide goods or services
Wants to receive payment
Wants to keep the money received

12. Typical Investment Transaction
Business Owner(s) or Operator(s) need capital to execute business transaction(s) to obtain a profit.
Investor/Lender invests capital in exchange for a return on the investment that reflects the level of risk of loss.

13. Vukani Case Study Sandile Zondi
Entrepreneur with 20 years of experience
Food manufacturer
Informal Business
Leases a small building
2 kids (Mandla and Mbile)
Mbile wants in for 30% share and as employee
Mbile has growth plans
Possible Options
Commercial Loans
Foreign Direct Investment
Supplier Financing

14. Initial Consideration – Know Your Client
International Senior Lawyers Project
11/9/2018
Initial Consideration – Know Your Client
Who is Your Client
Appetite for Risk
Knowledge of Business
Experience Level
Expectations
Engagement Scope
360 View of Transaction
Upstream
Downstream
Vertical

15. Essential Objectives
Memorialize with precision the meeting of the minds of the parties with respect to a transaction or series of transactions
Basis for Enforcement under Rule of Law
Private Ordering Preferred by Law
Contract May be Viewed As an Asset
Base for Securitization (i.e., standard mortgages)
Base for Commercial Financing (i.e., factoring)
Contracts memorialize and serve as evidence of the “meeting of the minds” of their participants on the rights and responsibilities of each party. For the rule of law to apply, the courts or other enforcer must be able to have a record that recreates that understanding with as much precision as possible.
Capitalism requires predictability. So our rule of law societies enforce contractual agreements between the parties so that no only the parties to that contract but also others in the market can order their steps and plans with some degree of predictability.
Governments impose laws. Industries and specialized markets will also impose rules of the road for their participants. And, finally, we allow parties to privately order the rules that govern their dealings with one another. Call it, the Law of the Contract.

16. A Lawyer’s Perspective
International Senior Lawyers Project
11/9/2018
A Lawyer’s Perspective
Risk
Identify
Quantify
Rationalize
Allocate
Shift
Hedge
Responsibilities
Ethics
Transparency
Documentation of Terms
Results
Documentation Necessary to Support Claim
Cost of Achieving Result
Time Frame for Achieving Result
The business lawyer must construct a framework within which must problems are analyzed. The two bookends on the framework are Risk and Results.

17. Business Lawyer’s Function
Ensure that Client understands the terms
Assist client in uncovering risks and their consequences
Try to get the contract to express the rights and responsibilities of each party
Archivist of documentation necessary to enforce rights
1. Lawyer must satisfy himself that the client understands the terms on the agreement including the “boilerplate”.
Sometimes its better not to have a written agreement is client is not going to adhere to it.
Never let the client sign an agreement that contains provisions that are untrue or that client cannot meet.
2. Due Diligence requires basic investigation and targeted investigations
Basic investigation today includes checking the public records and Internet searches.
Targeted investigations include requesting documents be produced by the prospective business partners (examples might include contracts, financial statements, incumbency certificates)
Contract Based investigations. Specific and well-thought out representations, warranties and indemnifications.
3. Archivist
Know what documents are required by a Court or arbitrator to support or defend a claim.

18. Business Lawyer’s Toolkit
Filing System
Standard Key Documents
Engagement letter
Disengagement Letter
Invoices
Legal Opinions
Separate Funds Account
Checklists
Due Diligence
Applicable Law
Trade Resources
Professionals
Tax Lawyers
Accountants
Environmental
Privacy
Divorce
Criminal

19. Know the Environment
Industry Standards International Transaction Governing Law Tax Considerations Reputational Considerations

20. Means and Tools Due Diligence Representations and Warranties
Indemnification
Covenants
Affirmative Covenants
Negative Covenants
Collateral/Surety
Goods
Funds
Insurance/Surety

21. Role of Contracts Weaknesses Imperfection of Words Contract Length
Need for Grey Areas
Amendment by Conduct of the Parties
Changed Circumstances
Unforeseen Events
Interrelationship with Other Agreements
It is impossible to cover every possibility and to select the perfect word. In the art of negotiation, words are both a weapon and a currency. To obtain agreement, compromise may be gained by using a word that is less than precise or perfect for the situation. In fact, each side may have a different view of what the word means.
Contracts can also last for a many years and, as a result, words, terms and practices that were commonplace in one era may have diluted or lost meanings in another era. For instance, requiring important notices to be sent via telex may have little to no meaning in an Internet-based world.
If parties can not agree on how a specific situation is to be handled, they may not want to delay the deal while an agreement is worked out or acknowledge that losing the entire deal is not worth the failure to agree over this particular business point. The parties may “agree to disagree” or “kick the can down the road” with language that leaves the point open. The classic situation is with the selection of an arbitrator. If the parties can not mutually agree on an arbitrator, then an arbitrator is selected by a third party forum.
Clients are, first and foremost, business people and rarely will defer to lawyers while in the midst of get a business deal done. Client’s conduct can undermine the integrity of a written contract as the expression of the understanding an agreement between the parties as to their respective rights and obligations. The argument is why should some provisions in the agreement remain enforceable if the parties have altered others by their mutual conduct?

22. Smartest Guy in the Room

23. H a h n L o e s e r + P a r k s L L P Attorneys at Law
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H a h n  L o e s e r  +  P a r k s  L L P Attorneys at Law