Do You Make This Starbucks Mistake In Your Business Agreements?

By | Business Contracts, Business Lawyer | No Comments

business agreementsAre your business agreements really protecting your interests? Here’s a cautionary tale to learn from.

Starbucks wanted to distribute its coffee in grocery stores. Because Kraft already had the distribution network in place for its food, Starbucks signed a contract to have Kraft handle its coffee too.

What was Starbucks’ mistake?

Since the contract was designed to last forever, Starbucks had to pay Kraft almost $3 billion to walk away from the deal.

Related Article – B2B Contracts – How To Avoid 4 Common Mistakes

Times change, people change, and so do your business needs. Plan accordingly.

That’s why the business agreements our firm prepares are designed to protect clients now and give them options in the future when circumstances change. To learn more, check out our Business Contract Legal Protection Package.

Can A Job Interview Form A Verbal Employment Agreement?

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Can A Job Interview Form A Verbal Employment Agreement?The Alleged Verbal Employment Agreement

A woman claims she was offered and accepted a position during an interview. In other words, there was a verbal employment agreement.

She gave notice at her two existing part-time jobs and quit both of them.

One week after the interview, she showed up to complete paperwork at what she thought was her new employer. However, she was told to go away, there was no job, and the company was not hiring.

Related Article – Business Contracts: Why You Should Avoid Email Deals

The Breach of Contract Lawsuit

Unable to get her old part-time jobs back, the woman sued the company for breach of an oral employment contract and related claims.

It remains to be seen who will win this dispute: the alleged employee or the company.

However, even if the company wins the lawsuit, the legal fees and expenses will likely cost more than a couple years of paying the woman a salary.

How To Minimize This Risk

How do you avoid this type of mess with job applicants?

First, have a policy of only making your job offers in writing, making the offer contingent upon signing an employment agreement, and don’t deviate from that policy.

Related Article – Does Your Business Lawyer Draft Contracts That Encourage Dispute Resolution Or Lawsuits?

Second, use a professionally prepared employment agreement that identifies the respective rights and responsibilities of the new employee and you as the employer. If you don’t have one you regularly use with your workers, check out our firm’s Business Contract Legal Protection Package.

Yes, it takes a little time to do this right. But it costs a lot less than a lawsuit because you cut corners in your hiring process.

Software Development: Who Really Owns A New App?

By | Software Agreements, Software Lawyer | No Comments

Software Development: Who Really Owns A New App?Whether you’re a developer or you’ve contracted with one to create a new application, there’s often a big misunderstanding as to who owns the intellectual property at the end of a software development project.

If you paid to have the app developed, naturally you expect to own it. On the other hand, if you’re the developer, chances are you recycled some code on the current project and plan to use it in the future on other projects.

Open Source Code?

And then there’s the open source issue.

Was any of the code added per a GNU General Public license, Creative Commons license, or other open source license?

As you can see, there’s plenty of room for disagreement about who owns what intellectual property.

Related Article – Software Development Agreement : Who Really Owns The Intellectual Property?

Written Software Development Agreement

Of course, the solution to this problem is to having the project done per a comprehensive app development contract that covers ownership, licensing (including type of license), and any open source issues.

Related Article – Software Development Agreement: 10 Issues To Cover

Your written contract can provide not only for intellectual property issues but also prevent other problems from arising during all phases of development and testing.

Where Should You Get An App Development Contract?

By having your agreement professionally prepared by an experienced software lawyer, you’re likely to get what you want rather than leaving it to chance.

For example, our firm prepares a Software Development Legal Protection Package that’s designed to favor our client’s legal rights while offering a fair deal to the other side. Often the agreement is reused by our client on future app development projects with minimal changes.

Regardless of what you decide to do, whether you’re a developer or paying one, don’t just wing it when it comes to software intellectual property ownership, licensing, and related legal rights. That’s not only bad for business relationships but also an invitation to a lawsuit to sort things out after the fact.

How To Use Business Contracts To Prevent A Single Point Of Failure

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How To Use Business Contracts To Prevent A Single Point Of FailureBusiness contracts can help prevent your company’s cascading collapse caused by a single point of failure (SPOF). Did you know that one of the biggest mistakes entrepreneurs make is running their ventures so that a SPOF can wipe out everything?

In fact, most small businesses are riddled with SPOFs ready to explode like a land mine when you can least afford it.

For example, let’s say you have a worker (employee or independent contractor) that’s vital to your operations who needs to take a week off to attend a parent’s funeral. If the worker’s absence brings your company to a halt, that’s a SPOF.

Or your software developer acts like a prima donna, making unreasonable demands or not timely delivering. Will your business be held hostage?

Related Article – B2B Contracts: How To Avoid 4 Common Mistakes

And for business owners, the most vital SPOF is the one you see in the mirror, i.e. your business can’t survive without you. Your vacations (if you take one) are 24/7 working vacations where you’re checking text messages, voicemail, and emails to make sure everything’s running.

How To Prevent SPOFs

It doesn’t have to be that way.

Build in redundancy by cross-training workers and finding alternate sources for vital products and services.

One of the best places to start eliminating SPOFs is to identify all of the key tasks that must be performed for your business to function smoothly (including your own responsibilities) and make sure there’s at least 2 to 3 people who can handle those tasks.

The Importance of Business Contracts For Avoiding SPOFs

Then use employment contracts and independent contractor agreements to formalize those responsibilities with each worker to ensure you’re protected. Our firm prepares these types of agreements as part of a Business Contract Legal Protection Package.

Let’s face it. Because it’s essential to your company’s success to make sure no one becomes a fatal bottleneck, you need to put the right business contracts in place to prevent your operations from grinding to a SPOF halt.

Business Contracts: Why You Should Avoid Email Deals

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Business Contracts: Why You Should Avoid Email DealsHow do you enter into business contracts? If you lived a couple hundred years ago, chances are you’d reach an important business agreement by spitting in your palm and shaking hands with the other person.

By the 20th Century, that evolved into a simple handshake “Gentleman’s Agreement.” No spitting.

Today, many business deals are made by an exchange of emails, i.e. a virtual handshake.

What’s the problem with that?

The Dangers of Email Deals as Business Contracts

The spitting starts when something goes wrong during performance.

You and the other party argue over what’s in the chain of messages back and forth. In other words, you both have very different ideas on what those emails meant. Were they negotiations or did you agree to specific terms?

At a minimum, it’s a loss of time. Too often, it’s a lawsuit and the end of what had been a good relationship.

And if you signed any of those emails as an individual (rather than on behalf of your company), you might find yourself personally on the hook if you lose in court.

A Simple Solution

Many of our clients have found the easiest way to prevent this mess is to systematize their business deals using a professionally prepared written contract designed to protect themselves and their businesses.

We typically prepare a contract for a flat fee — check out our Business Contract Legal Protection Package — and the client uses it over and over again.

For example, if you repeatedly buy or sell a particular service/product, it makes sense to have an experienced business lawyer prepared a customized written “standard agreement” you’ll use as the basis for your deals.