Are The Right People Signing Your Business Contracts?

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A frequent mistake I see in business agreements is that the wrong people are signing them. The consequences of this issue can be expensive.

Here’s why…

If a contract signatory doesn’t have signing authority from the entity he represents, that company may not be legally bound to perform the agreement.

Even if there is signing authority, business contract signature lines are often screwed up so that it’s unclear in what capacity the person is signing.

For instance, if Sheila Jones signs her name on behalf of her company but neither her business nor her title is identified as part of the signature, one can make a strong argument that the signature was in a personal capacity (with personal liablity!) instead of as an authorized company representative.

Then there’s the missing signatory to a business contract. There are several common variations of this type of mistake. For instance, a person might sign in one capacity but fail to sign a second time in a different capacity. Because it’s common for a person to need to sign once as an individual (e.g., personal guarantee) and a second time as an authorized signatory (eg., President) of his company that’s a party to the agreement.

Then there’s the missing spouse consent problem. This frequently occurs in the sale of a business. For example, Mary Smith signs an agreement to sell her company. However, because her husband John may have a marital interest in the business (even if he doesn’t have equity titled in his name), the company’s buyer will want the husband to sign off his consent to the sale.

If you need help with your company agreements, it’s probably time to talk with an experienced business contracts lawyer like Attorney Mike Young.

Will Your Texas Gym Be Sued Because Of Missing Legal Documents?

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I recently went to a gym for a trial workout. Although it was a great experience, the gym owner dropped the ball by not having me sign anything as a guest.

At a minimum, I should have been required to read and sign a liability waiver and release so that it would be almost impossible to successfully sue if I was injured as a gym guest.

Now if you’re a Texas gym owner, there’s even more paperwork you’ll want signed by your gym members. For example, you’ll want them to sign a contract that complies with the state’s health spa act and biometrics law.

Now there are some pretty stiff penalties for violating Texas law as a gym owner. This can include criminal prosecution and even having all of your gym membership contracts being declared void and unenforceable.

In short, it doesn’t take much to land in a briar patch if you don’t take the time to protect your Texas gym legally.

If you need help with your Texas gym legal documents for guests and members, it’s time to set up a phone consult with Attorney Mike Young.

Is It Time To Update Your LLC Operating Agreement?

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When you own or co-own a limited liability company (LLC), you enjoy a lot of flexibility running the business if you have the right operating agreement in place.

Unfortunately, what was good for your company when you set up the LLC often isn’t ideal (and even harmful) as circumstances change.

Because new circumstances will change your priorities. These can include:

* adding or removing members (owners)

* getting married or divorced

* having kids

* succession planning (who will run the business when you retire?)

* changing the company’s business model

* electing to be treated like a different entity in order to reduce taxes paid

And if there are multiple members, you’ll want to make sure there’s a “Texas shootout” or other buyout provision in the LLC’s operating agreement that makes it easy for owners to leave without destroying the company in lawsuits.

An experienced business lawyer can fix your operating agreement so it makes sense based on existing circumstances while planning for the future.

Can Employers Require Employees To Get A COVID-19 Vaccine?

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As a general rule, you can require your employees to get a COVID-19 vaccine. But that doesn’t mean it’s a good idea.

Here’s why.

OSHA has taken the position that if you make your employees get a coronavirus vaccine, then any adverse reaction to the shot by an employee is a work-related injury.

So, what happens if you have an employee that gets blood clots or even dies because of the vaccine?

Not only can you have the government breathing down your neck because of safety issues but you may find your business is a defendant in a personal injury or wrongful death lawsuit. Or at least an expensive workers compensation claim.

And that’s just the legal consequences. How do you face an injured employee or a dead worker’s family?

For now, the safer course of action is to make the vaccine optional and make accommodations for at-risk employees to work from home if possible.

If you haven’t done so recently, it’s probably a good time to have an experienced business lawyer review your employment contracts and policies to make sure you’re not at risk with regard to pandemics, epidemics, and other dangers.

Whose Business Contract Do You Use?

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When you’re doing a deal, do you have an experienced business lawyer draft the agreement or do you work off of the other party’s agreement?

As a general rule, you get a far better deal when you start with a contract prepared by your business attorney instead of trying to fix unfavorable terms in the other side’s agreement.

And not only do you have to identify what the other party put in the agreement that could hurt your business, you’ll also want to revise the agreement to cover issues that were not addressed…assuming the other side agrees to it.

Don’t assume that “standard terms and conditions” are standard. In most cases, they’re standard only in the sense that the other party uses them all of the time and they generally favor that party (not you).

Yes, it’s easy for eyes to glaze over when reading legalese. However, if a deal is important, it should be done with the right contract to protect you and your business.

What if the other side insists on using their contract as the starting point? In some cases, you have to bite the bullet and use that. However, you can sometimes use the threat of going to their competitor to get the deal papered on your terms instead. It really depends on whether or not the other side needs to do business with you.

Regardless, start your potential deals with an assumption that your contract will be used instead of the other party’s agreement. If nothing else, you may get concessions off the bat in exchange for agreeing to use their contract during the negotiations.