What you need to know before entering into a contract — New York Business Law

What you need to know before entering into a contract

by Fred Abramson on October 9, 2014 · 1 comment

 

Hope you are having a great Thursday afternoon. Today, Tesla and SpaceX C.E.O. Elon Musk said he was worried that people didn’t understand how fast artificial intelligence was progressing, and expressed his concern that, in a worst-case scenario, a “super-intelligent” machine might decide to destroy human life. I’m a big fan of Mr. Musk, but do you think he is right?

In similar news, nj.com wonders if computers will replace lawyers.  From registering a trademark to drafting a will, the Internet provides the tools to perform many legal tasks that were once reserved for attorneys like myself. Whether these internet tools actually do a good job is debatable, but there is no question that technology will play a significant role in the future of the legal industry.

Let me get this straight, first computers will take my job, then “super-intelligent” will take my life. Oy vey!

In the meantime, let me tell you what you should be on the lookout for when reading a contract. If you need any help reviewing a contact, feel free to call me, your lawyer, because that is what I do for a living and I’m super fantastic at it.

1.      Know the Other Party

Be sure that the business you are contracting with is registered to do business in the state in which you operate your business.  Should there be a problem later on, it will be much easier to institute a lawsuit as the states maintain addresses for service of process on registered corporations.  In addition, if the business is not properly registered in the state, there could be legal issues with your contract.  The business should also be licensed in the specific type of business it conducts, if this is required.

2.       Pricing Issues

If you are a buyer or a seller, know what you are paying or getting paid, when the money is due, how it is to be paid, where it is being paid to.

3.      What is the Exact Product or Service

While this may seem obvious there are thousands of lawsuits on just this issue.  Be sure you and the other party are on the same page, literally and figuratively.

4.      Delivery of the Goods or Services

Specify exact time frames for delivery of the product or service and when payment is due in relation to this time frame.

5.      Condition of the Product or Service

Are the items new or used?  If used, how much?  If new, in original packaging or repackaged?  If a service contract, specify who will be doing the service and his or her credentials?

6.      Warranties

What are the guaranties on the product or service?  What period of time do they cover?  What is the procedure for repairing or replacing an item or correcting a service mistake?

7.      Getting out of the Contract

While most contracts are made to avoid getting out of them, you can sometimes negotiate an “out” clause for poor performance or lack of proper delivery or other essential things.

8.      Renewal of the Contract

Is there an automatic renewal?  Is there any option to renew?

9.      Default

There are several ways to default on a contract. Two prevalent ways are non-payment and non-performance.  Non-payment can include not getting paid in full, on time or at all.  Non-performance can be not doing the job properly, in full, or not how you expected it to be done.  All of these can be combated with remedies in the contract.

10.  Remedies

Make sure the contract has a section dealing with remedies for defaults.  Remedies are compensation to the injured party for such defaults.  Outside of the contract there are other ways to be compensated for default in contracts, including state statutes, federal statutes like the UCC, fraud actions and illegality of the contract, dealing with minors, duress, undue influences, etc.

 

Be Sociable, Share!
  • Ellilou Ilano

    Great article. Thanks for the info, it’s easy to understand. BTW, if anyone needs to fill out a Fannie Mae 1003,I found a blank form here: http://goo.gl/VslTuf

Previous post:

Next post: