Time for Your Company Document Legal Review

When was the last time you looked at, let alone reviewed, your company documents like your Articles of Incorporation, Bylaws, Operating Agreement, or Partnership Agreement. Of course, depending on your situation and how long you have been around, you should also have a few Resolutions, Minutes of your Board and Shareholder meetings, perhaps a Buy-Sell agreement, a Shareholder Agreement, Stock Certificates, and so on.

Types of Businesses

There are three types of businesses generally. First, there are businesses that were formed with […]

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When is a Worker an Independent Contractor for Unemployment Insurance Purposes?

I’ve previously written about what constitutes an independent contractor versus an employee in April 2013 when I wrote: “Independent Contractors: Navigating the Legal and Regulatory Framework.” There, I highlighted some differences between IRS regulations, Workers Compensation, and Unemployment Insurance rules that are used in Colorado to determine whether a worker is an independent contractor or employee for whichever topic is at issue. In short, there are sort of two standards, and in either case, the question is fact-specific. In short, […]

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Terms Limiting Waiver of a Contract’s Terms

A second fundamental way to limit “inadvertent” change of a contractual relationship is to limit the situations in which the conduct of the business can be interpreted as a waiver of the terms of a contract. The most common term will specify that a business’s decision not to enforce terms of a contract in one situation cannot be used as evidence of a waiver of those terms in another situation.

This kind of term essentially provides a party with flexibility […]

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Terms Limiting the Amendment of a Contract

One fundamental way to limit “inadvertent” amendment of a contract is to specify in the contract how an amendment can take place. The most common term will specify that there can be no amendment to the agreement unless it is in writing and signed by the parties.

This sort of term does two things: First, such a term forces the parties to make sure that the original agreement is something they can live with if they are unable to amend […]

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Why use a Term in a Contract Limiting Amendment or the Waiver of its Terms?

Parties are free to modify their original agreement after it is made. A contract may be explained or supplemented by new agreements or the course of dealing. These modifications are at least amendments, and in some cases can completely preempt the old agreement.

Amendment of a contract takes place after the agreement. An amendment, like the original contract, occurs when the parties make a subsequent agreement. Unless the contract specifies that amendments can only be made a specific way (e.g., in […]

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Negligent or Fraudulent Misrepresentation in the Formation of a Contract

There is a big difference between what happens before a contract is formed, and what happens afterwards. A lot of what happens before a contract is formed can be eliminated from later consideration by the inclusion of an integration clause. As discussed in previous posts, an integration clause specifies that the contract is the final, complete, and exclusive statement of the agreement.

An integration clause works to prevent a party to a contract from asserting that the parties made additional […]

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When to Use an Integration Clause

In putting together a written contract, it is generally best to put all of the agreement terms into the contract and use an integration clause to prevent the application of any terms not in the contract. This puts the obligation on the parties to each make sure the written agreement actually lists everything important to them, and to accept that what is excluded will not apply. Such a process encourages communication and notice and supports the value of the agreement. […]

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Parol Evidence

Evidence of what was discussed or negotiated that is outside of a written contract is called parol evidence. In a dispute, parol evidence is generally excluded from consideration. The point during the dispute is to hold the parties accountable to what they actually intended in the written contract. However, if the terms in the contract are ambiguous, i.e., the terms are capable of being reasonably interpreted in more than one way, a court or arbitrator may consider parol evidence to […]

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What is an Integration Clauses in a Contract ?

An integration clause is a provision of a contract which states that the parties intend for the written contract to be a final, complete, and exclusive statement of the agreement. Without such a provision, there is no assumption that the written contract is the complete or exclusive expression of the agreement.

In practice, when parties put together a sales contract they engage in discussions and negotiations regarding how the interaction will take place. What the parties discuss before putting the […]

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Directors on Nonprofit Boards

It is very popular to be on a nonprofit board for a church or charity. While a nonprofit does not have shareholders to whom a director is responsible, the nonprofit does generally have a constituency to whom the board is responsible, and in most instances, the attorney general of the state in which the nonprofit is organized has the right to act on behalf of the constituency to hold the board accountable.

Notably, the same general duties apply to the directors […]

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