Phase 3 - Commercial Law

​There is an old saying that a "oral contract is as good as the paper it is written on." While not always true from a legal standpoint, that adage bears significant discussion.

In the same sense that you buy insurance to protect you from the known and unknown risks of operating your business, appropriately drafted legal documents serve that same purpose and act as another form of insurance, oftentimes denying the adverse party the opportunity to allege the existence of conflicting or untrue oral agreements; setting forth in detail the exact and only nature of the contractual relationship between you and third parties; and, in essence, acting as the "Bible" in respect to your business dealings. A properly-drafted contractual document also provides you the necessary peace of mind to proceed forward with your business dealings, allowing you to recognize and plan for your direct contractual obligations and rights and, thus, relying upon the reasonable expectation that the other side recognizes, as well, its duties and privileges. Obviously, appropriate drafting of your contractual documents is a matter of necessity. For that matter, review and modification of existing business documents is a practical necessity, particularly in the highly competitive environment affecting all businesses.

It is essentially impossible to list, in detail, all the types of commercial documents which our office drafts, reviews and/or negotiates on behalf of our clients. However, the following documents are representative:

  • Loan Documents

  • Sales Agreements

  • Invoices

  • UCC Security Agreements

  • Security Agreements

  • Financing Statements

While some businesses use "fill-in-the-blanks" form documents, it has been our experience that those type of documents available through office supply stores are oftentimes too generic and may not be directly in compliance with applicable laws. The same can be said for documents which have been used for a number of years subject to no or minor modifications. Oftentimes, those documents do not include the necessary disclaimers in regards to warranties or the particular language necessary to fully protect your business interests. Unfortunately, our experience in drafting and reviewing poorly-drafted documents is oftentimes at the expense of our clients who find themselves subject to contract interpretation by a judge during the course of litigation.

Fortunately, our firm's library of computer-generated forms now number in the thousands, allowing us to more expeditiously serve you on a generally less expensive basis than "starting from scratch."

Simply put, it is imperative to review and modify those contractual documents utilized in the normal course of your business and, for that matter, anticipate the creation of others that will best serve your purposes. Here's a simple check list as you undertake your review:

  1. Compile those documents you use on a regular basis.

  2. Set them in priority of importance to your company.

  3. Determine from what source that document is generated and the year of its generation and subsequent revisions.

  4. Carefully read the documents, determining if they make sense to you and are consistent with your existing policies. You obviously cannot expect your customers and clients (or for that matter a judge) to appreciate your position if it is hard to understand or inconsistent with your actions.

  5. Consider de-legalizing your forms. A reader-friendly document oftentimes is more acceptable and less susceptible to a client's/customer's attack as to what was really the basis of the agreement.

  6. Consider and review similar documents you have obtained from third parties. There is no problem in "borrowing" language of other business entities conducting business similar to that of yours to the extent that such language falls in line with your practices and needs and is not copyrighted.

Caveat: Watch out for inconsistencies in the documents you have previously utilized. What may be said in one paragraph may be countered in or in conflict with another or in an addendum. It is appropriate to look "globally" at what you are intending to accomplish by incorporation of all of the phrases and the terms and conditions set forth in your contractual dealings.

Should you require our services, feel free to call upon us. We wish to extend you whatever courtesies we can in respect to providing you formats of those contractual documents we have utilized in respect to other clients.

Another thought: Letter of Intent: Oftentimes, our clients are able to draft letters of intent highlighting both general and specific terms in respect to their business dealings, subject to further efforts on our part to more specifically set forth all appropriate and supplemental terms and conditions. Utilization of a Letter of Intent allows you to reach an "agreement to agree," and in effect constitutes a commitment to proceed to a more formal contract. When preparing a Letter of Intent, however, it is necessary to place a disclaimer to the effect that the "effectiveness of this Letter of Intent is subject to ultimate preparation of a mutually-agreeable and complete document setting forth all terms and conditions between the parties."