Indemnification and Advance Payment

Reimbursed at the End

Indemnification obligations do not arise until there is some determinable amount that a party is obligated to indemnify. The fact that a party has an indemnification right does not mean they will get reimbursed for their expenses or losses (especially defense costs and attorney fees) until after there is an actual out-of-pocket expense that is found to be covered by the contract language. In other words, you do not get reimbursed until the end.

Example in Corporate Setting

An […]

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Principles for Review of a Contract

As a party to a potential contract, it is important to read the contract in relation to the goals and expectations that the party has. Specifically, before reviewing the contract, and becoming mired in the specifics of what is presented, it is important for the party to identify its primary concerns. By listing out the goals and objectives first, the party can more easily verify whether the contract actually accomplishes what it is intended to do. Accordingly, by reading the […]

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Drafting the Contract

Once the parties have settled on the fundamental terms of a contract, the process of actually drafting the contract takes place. It is generally advantageous to be the party creating the first draft of the contract. While the drafting may be time consuming, the party that drafts the contract has the initiative in crafting the language and terms of the contract in a manner that is best suited to the parties’ needs. In this way, the drafting party ensures that […]

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Contract Terms: Alternative Dispute Resolution and Attorney Fee Provisions

Contracts perform at least two functions:

Notice and Communication:  Contracts are a form of communication in which the parties state their intentions and expectations while also providing each other with notice regarding what they care about and how they are wiling to work together. 
Accountability:  Contracts not only provide the parties with information, they also provide an objective standard which third parties can consider and use to evaluate whether the parties to the contract have performed under the contract.

 

When parties engage in […]

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General Overview Regarding Sources of Business Risk of Liability to Third Parties

This month of May, we will be addressing various issues related to operational issues for businesses.  This post will give an overview of the primary sources of risk an average business is subject to as it relates to third parties.

Taking a page from one of my favorite authors, C.S. Lewis, there are too equal and opposite errors for businesses.  The first extreme is the business which ignores potential liabilities to third parties as either extremely remote, or non-existent.  The other […]

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Contracts Can Be Marketing Tools

This week we are taking a break from entity structures to join the Entrepreneur Community Online (ECO) Operations Team (#ECOops) conversation focused on growing sales.

The Conversation

Sales professional Chuck Crenshaw (@cecrenshaw) set the stage by highlighting the three methods businesses get cash, emphasizing the most important: increasing sales.

Public relations professional Jerry Brown (@JerryBrownPR) pointed out the first step to increasing sales: Selling Requires Telling (Your Story).

ECO founder and social media expert Linda Hughes (@iempoweru) started getting practical asking the question: […]

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