A contract is a bridge between two sides. The important thing is that like the trusses supporting a bridge, the clauses in a contract must bear the weight of the parties’ positions over time. Money saving 'do it yourself' templates, or fill in the blank contracts are very costly "civics lesson"--not only in terms of the eventual legal fees involved but also the potential judgment or settlement that the business may have to pay. On top of that, another huge cost that many business owners are unaware of is that the litigation process robs you of valuable time, attention and mental energy that you could otherwise use for running your business.
With that in mind, we draft contract clauses that can help your business stay out of court--or at least increase your chances of coming out on top if you have to go there.
One of my business clients operates a very successful non-medical senior home care service. In this industry, employee caregivers are every once in awhile hired away by those receiving care. My client needed a clause crafted for their service contracts that would prevent this practice or provide for monetary damages when it may occur. The exact damages incurred by this practice could not readily be ascertained, however, a determination of the reasonable damages was estimated to be $10,000.00. I drafted a $10,000.00 liquidated damages clause and an attorney fees clause for the client’s service contracts. In an instance where a caregiver was hired away, the liquidated damages clause was challenged in the Bucks County Court as an unenforceable penalty clause. A non-jury trial verdict was entered in favor of my client in the amount of $10,000.00 in contract damages and $4,173.50 in attorney fees and costs.
Obtaining legal counsel, in the early stages of drafting business forms, contracts and agreements is essential to readily resolve problems. Business owners are often unaware that the litigation process robs them of valuable time, attention and mental energy that could be otherwise used for running your business. Accordingly, clauses providing for liquidated damages relieve you of trying to prove uncertain losses and attorney fees clauses allow you to recover your own attorney’s fees from the other side if you prevail. Even the threat of having to pay your attorney’s fees may be enough to forestall frivolous lawsuits and get the opposing side to settle for a reasonable amount before the dispute ends up in court. As a final point, with a binding dispute resolution clause, both sides can avoid the courthouse altogether where they have already agreed to submit a dispute to binding arbitration rather than go to court. Dispute resolution is faster and less expensive than going to trial. Many times dispute resolution is a private matter that, unlike a trial, is not open to public or press scrutiny.