When Clarity is a Curse and Vagueness a Virtue

A conference speaker recently stated that a company’s legal documents should avoid vague provisions like “the parties will use their best efforts to….”

I agree that clarity is generally a virtue in legal contracts. Except when it isn’t. Practicing law, like many things, is part “science” and part “art”. One of the “arts” is knowing when a vague (or semi-vague) provision might help your client’s interests and, conversely, when clarity might hurt your client’s interests. Read more

How Early to Get Your Lawyer Involved

I sat in a conference session yesterday and heard the presenter say that you should negotiate all the “deal points” of a strategic alliance before getting your lawyer involved. Lawyers can be expensive and also might introduce complications and delays into a business arrangement, so I understand the temptation to feel that way. Nevertheless, I strongly recommend the opposite course — discuss your business strategy with your lawyer early in the strategic alliance process.

A business-minded lawyer will be sensitive to cost, complexity and timing issues. But he or she can also guide you on key structural issues arising out of a strategic alliance. In the simplest case, you might negotiate the “deal points” of a distribution arrangement by establishing the price and market area. Your lawyer might then be given those terms, discuss your overall objectives with you, and then recommend an altogether different structure that will serve you better (for example, perhaps you should ask for a long-term license agreement instead of a customary distribution agreement). If you knew that early, you might easily get your business partner to agree; however, after the deal points of an alternative structure are set, it might be tougher to change course. Read more