Flat Fee Contract Drafting And Revisions

By | Business Contracts, Business Lawyer | No Comments

flat fee contract draftingOver half of Business Lawyer Mike Young’s practice involves flat fee contract drafting or revisions for clients. Why a flat fee instead of charging by the hour? Because it makes sense for the client to know ahead of time the amount they’re investing in legal protection so there are no surprises.

Phone Consultation

During the initial phone consultation, Attorney Young and the client discuss the agreement(s) to be prepared or revised. After the consult, the client will receive a firm quote for either drafting the new contracts or revising existing ones.

In some cases, it’s more cost-effective to have a new agreement prepared than to revise an existing contract that has major flaws in it. Because it takes time to identify and fix problems in an existing agreement, particularly those that have been “borrowed” from another source by the client.

What if additional work needs to be done? Flat fee quotes for contract drafting include one set of complimentary revisions within 10 days of the client receiving the agreement from Attorney Young.

Hourly Billing As An Alternative

What about hourly rates?

Attorney Young will prepare or revise agreements at an hourly rate. However, most clients prefer to pay a flat fee instead.

When hourly rates are charged, it’s typically when the amount of time involved is clearly an unknown. For example, when a client wants Attorney Young to negotiate the contract’s terms with the other party’s lawyer there’s no way to know how time-consuming that will be. So, the standard hourly rate is charged and billed in 1/10th hour increments.

How To Get Started

If you need help with an agreement, your first step is booking a phone consultation with Attorney Young.

Should You Buy An Online Business’ Equity?

By | Internet Lawyer | No Comments

Should You Buy An Online Business’ EquityWhen you’ve decided to purchase an existing e-commerce business, should you purchase the company’s equity (corporate shares, member equity interests, etc.)? As a general rule, it rarely makes sense to buy an online business’ equity when you’re acquiring it. Most deals are asset purchases instead of buying equity.

Here’s why…

First, with the transfer of equity, you also get the company’s existing and potential liabilities. Even with due diligence prior to closing, you can still end up having bought a pig in a poke…lawsuits, tax judgments, etc.

Second, a seller will often want to retain their entity and some assets unrelated to the sale of the business you’re purchasing. For example, the seller may have an e-commerce venture that’s in a different niche but owned by the same entity…and that won’t be part of your deal. In fact, smart sellers often hide their unrelated online ventures so that buyers don’t even know about them.

Of course, there are rare exceptions to the general rule. For example, if the primary asset of the online venture is the seller’s email lists, it may make sense to buy the entity’s equity instead of the lists themselves. Why? Because email subscribers opted-in to receive messages from one entity…they didn’t give a second entity permission to email them.

Even if an email autoresponder service lets an asset purchaser assume control of the seller’s email lists, chances are the buyer’s sending of emails to the lists violates federal and/or state laws because there was no consent by the recipients. What was perfectly legal for the seller to send becomes unsolicited commercial email (spam) when sent by the buyer.

These are just a few of the issues you’ll want to discuss with your Internet business lawyer as you explore the best way to acquire an e-commerce business. Just don’t assume that you can buy an online business’ equity without there being some significant legal risks that should be minimized as part of structuring the deal.

Software Development Agreement: Who Owns The Code?

By | Software Agreements, Software Lawyer | No Comments

software development agreement and code ownershipWhether you’re a developer or you’re paying to have a software application developed, one of the most important issues you should resolve in the software development agreement is who owns the code.

Unfortunately, many app development contracts ignore this issue. Instead the parties focus on the scope of work, payment milestones, and the like without giving a thought to intellectual property ownership.

Now if you’re a software developer, you’ll want to be able to recycle code on future projects. On the other hand, if you’re paying for a mobile app or other software to be developed, chances are you believe you’re purchasing ownership of the code. And that’s at least partially false in most cases because of what’s in the development contract and what’s omitted.

For example, developers frequently use open source and public domain code on projects instead of custom coding everything. And they’ll reuse code from prior projects for other clients. After all, there’s no sense in reinventing the wheel. Of course, the developer took this into account when quoting a price for the project in the first place.

So, how do you avoid a legal mess because of vagueness in your software agreements?

Ideally, the software development agreement will clearly identify…

  • For custom coding, which party owns the code, which party will receive a license to use the code, and the scope of the license.
  • Which parts of the code is open source and the type of license the client receives to use that open source code.
  • Public domain code that’s included in the app.

Now if a client wants exclusive ownership of custom code, the client should expect to pay a premium for that exclusivity. In some cases that makes sense, particularly if there’s a likelihood the custom coding could be used by the developer to create a competing application.

Of course, whatever’s decided with respect to ownership and licensing, it should clearly be documented. For example, a copyright assignment, software license(s), and the like. So that both parties are on the same page as to their legal rights. This reduces the chance the developer, client, and third parties will end up in software litigation over app ownership and licensing rights.

What if you’re in the middle of an app development project but the contract is missing essential ownership and licensing terms? An experienced software lawyer can help you modify the agreement so that the parties know what they’re really getting out of the deal.

Boilerplate Contract Abuse: Are Your Business Agreements Enforceable?

By | Business Contracts, Business Lawyer | No Comments

boilerplate contract abuse and enforceabilityJust because you’ve got signed business contracts doesn’t mean they’re enforceable. In fact, there’s a good chance that one or more provisions of each of your legal agreements can be set aside by a judge as boilerplate contract abuse.

And in some cases, that means the entire agreement is voided if you’re missing some key clauses designed to prevent that from happening.

This is particularly true where a judge believes there’s been unequal bargaining power, i.e. your company had an unfair advantage in contract negotiations or even forced a take-it-or-leave-it agreement on an individual without any modifications. In other words, the court perceives the other party (employee, independent contractor, small supplier, etc.) as being a victim you took advantage of to reach an “unconscionable” agreement.

Such unfairness is typically determined based on clauses concerning non-competition, dispute resolution, intellectual property ownership, and the like…especially if those provisions are drafted totally one-sided in your company’s favor.

Fortunately, there are things an experienced business attorney can do to make your contracts at least partially enforceable.

Now a good agreement favors your business but doesn’t put the other party in such a deep hole that they can’t dig out of it if something goes wrong. In other words, you’re not forcing them to agree to terms that on their surface are so objectionable that the first word that comes to mind when reading them is “ridiculous.”

Naturally, you’ll want your business contracts lawyer to include provisions that protect you too.

For example, there should be a severability provision that makes the rest of the agreement enforceable if the court strikes part of it down as unconscionable or for some other reason.

And if it’s a B2B deal, you want the contract to avoid language that makes it look like the other party is a consumer (instead of a business) because there are consumer protection laws that make it harder to enforce boilerplate agreements.

In addition, you may want to have your agreements reflect that both parties have had the opportunity to have the agreement reviewed by their respective legal counsel before signing. And that the contract shouldn’t be construed against either party as the drafter of the agreement’s language.

Choice of law, methods and location of dispute resolution, and who pays for what in a dispute are other terms your business lawyer can craft to maximize enforceability.

If you’re using a template for your agreements prepared by your legal counsel, that’s okay. To avoid unenforceability because of boilerplate contract abuse, just make sure that it makes sense to use the template in each deal. Have it tweaked as-needed to prevent fundamental unfairness that jeopardizes enforcement. In other words, don’t assume your standard “boilerplate” language that’s fair in Deal A will be automatically enforceable in Deal B, Deal C, etc. where the parties and other details can be substantially different.

How Do You Comply With Texas Gym Coronavirus Orders?

By | Business Contracts, Business Lawyer | No Comments

texas gym coronavirus orders complianceIf you own a Texas gym or martial arts studio, you’re probably trying to sort out which government mandates to obey so that you can keep your doors open. Here’s a quick overview of Texas gym coronavirus orders and protocols owners need to know.

1. Texas Governor’s Executive Orders

Unless they’re overturned in court, the Texas Governor’s executive orders are the first thing you’ll want to read and understand how they apply to your fitness center or martial arts studio. As a general rule, anything issued by a county or city has to be consistent with the governor’s orders.

If there’s a dispute between the governor and local officials, chances are the governor will ultimately win because the governor’s political party also holds all state supreme court justice positions (Texas Supreme Court Justices are elected by party too).

2. Texas Department of State Health Services Minimum Standard Health Protocols

These coronavirus health protocols (with checklists) were developed per the governor’s executive orders. There are two types of protocols you’ll want to read and follow.

  • First, there’s the protocols for your business (e.g. equipment cleaning) and your workers (e.g. instructors).
  • Second, there’s protocols for your members and guests to follow when they visit your facility.

3. Texas County COVID-19 Orders.

Your Texas County Judge may also issue orders that contain additional requirements. The office of “County Judge” is actually a political post (not a judge sitting in a courtroom) that speaks on behalf of your County Commissioners.

There’s a lot of confusion at this level because many county judges issuing orders are of a different political party than the governor. So, what you’re seeing come from the county judges (like the governor) is often about partisan politics as much as it is about public safety. Unfortunately, this doesn’t help you comply but it does give you some background as to why things seem intentionally confusing instead of easy to understand and follow.

In theory, a county judge’s order can only complement the governor’s order but can’t contradict it. For example, the governor has said that his orders permitting additional hygiene measures would be consistent with local orders mandating businesses require face mask use…and fining a gym that didn’t comply.

However, a county judge couldn’t order that an individual be fined or imprisoned for not wearing a mask because the governor’s orders expressly prohibit that from happening.

4. City Coronavirus Orders.

Your local mayor or city council may issue orders (or even pass ordinances) that contain additional requirements.

Like county judges, most large city officials of the opposite political party as the governor. And for the same partisan reasons, you may see orders issued locally that are not clear on what you’re supposed to do when you read them in context of the governor’s orders and the state health protocols.

As a general rule of thumb, a local order can complement but not contradict coronavirus orders issued at the state level.

5. How to get started complying with Texas gym coronavirus orders

In a nutshell, here’s what to do.

First, review the governor’s latest executive orders that address COVID-19 coronavirus and gyms/martial arts studios.

Second, read the state’s two minimum standard health protocols for gyms and their patrons — and use the checklists they contain to comply with the governor’s orders.

Third, see if your county has issued a local order with additional requirements (e.g. face mask use).

Fourth, see if your city has issued a local order (or passed an ordinance) with additional coronavirus safety requirements.

Fifth, determine if there are any exceptions to the government mandates that may apply to your gym staff, members, and visitors.

Questions About Texas Gym Coronavirus Orders

If you’re an owner and have any questions, speak with an experienced Texas business lawyer who represents gyms and martial arts studios. Note that in addition to complying with coronavirus orders and protocols, you may want to update your legal documents to provide additional protection (e.g. a COVID-19 liability waiver tailored for gyms and martial arts studios).