The ‘Non-Competition’ Covenant
Non-competition provisions appear in several different types of agreements, including employment agreements, consulting agreements and acquisition agreements, among others. Most attorneys and clients recognize that the basic issues to negotiate are the scope, territory and duration of the non-compete.
What I think is often overlooked is the practical reality that the very existence of the non-compete can greatly harm a client’s interests. There are at least two reasons for this. Read more
Control Freak
It’s usually easier to review a contract than to write one. It’s usually less expensive to review someone else’s draft. And it’s usually bad legal strategy to voluntarily agree to do so.
Once the basic terms of a legal agreement are decided, they are often given to the lawyers to “document” the deal. This is not a formality. This is one of the most critical steps in establishing the legal relationship. It’s so important, in fact, that customs have developed around who gets to “control the draft” (e.g., banks in loan financings, landlords in lease transactions, investors in first-round financings). Sometimes those customs can’t be altered. Other times, an unassuming offer to write the first draft is greeted with pleasure.
Here are five reasons to make sure your lawyer leads the drafting effort whenever possible: Read more
The ‘Notices’ Provision
This section is often given short shrift by lawyers and clients alike. However, it can be quite meaningful. Three key issues to consider are (1) the method or methods by which notices must be sent, (2) the time at which notices are deemed to be effectively given, and (3) who should be copied on the notices besides the primary contact (e.g., legal counsel).
Many Notices provisions will permit notices by first class mail, fax and sometimes email. That’s okay for unimportant notices. But, in circumstances where a notice can have dramatic importance (for example, a money release demand under an escrow agreement), I wouldn’t want my client’s money hinging on whether they saw and acted on a regular letter, fax or email. Rather, I prefer to require that important notices be sent by overnight courier or perhaps registered or certified mail. My sense is that FedEx packages or certified letters are treated with more urgency than more ordinary forms of communication. The key is to ensure that the client doesn’t inadvertently lose a right. Read more
