What Pitfalls Do Businesses Face In Reviewing And Drafting Their Own Contracts?

The general problem that businesses face when reviewing or drafting their own contracts is that they can find themselves on the wrong side of the agreement. There could be something in the contract that they weren’t aware of or didn’t understand. A good example of that would be indemnification. That’s a big word in itself, and many people may not know what indemnity means. They may not realize that in the long jumbled paragraph that talks about indemnification, they essentially signed and agreed to cover the other party in a lot of situations that they shouldn’t be covering. If things go wrong, they have now indemnified the other party. As a result, they will have to step in and protect the other party.

Non-compete is a big issue that comes up, especially in Florida where there’s a lot of contract work, construction work, business, and commerce. It’s a growing state. There are many things going on all around the state from its large growth and tax friendly policies, which usually equates to a lot of transactions and commerce. This is where you could find yourself in trouble with a non-compete issue. Businesses tend to use non-competes to inhibit employee from performing certain work. If you signed a non-compete and didn’t understand what you signed, it may be difficult to go off on your own after working with a company. You might be limited in your ability to grow a business as a result of a restriction or limit in your prior contract with an employer.

Typically, there are three things that go into a non-compete. One of the clauses is time restraint, which is a certain amount of time in which you cannot compete with your employer. A jurisdictional restraint is another clause, which means that there is an area in which you are not allowed to compete with your employer and previous clients. It can be very limiting if you want to try to go out and start your own business. Every state is different with what they deem to be too restrictive. They are allowed, but there are rules around them. If you are ever asked to sign a non-compete, you should have an attorney review it because it could limit you down the road. Non-competes can become very fact intensive if it gets to the point of litigation. Essentially, if the other party has a valid non-compete, they can have an injunction against you. You can be stopped from doing a profession or trade that you want to practice.

Another matter in contracts that people tend to gloss over or not recognize is copyright, trademark, and intellectual property issues. A party might have you sign over anything you do as their copyright or trademark. Consequently, you don’t know or realize that you are actually signing over the rights to those things. Sometimes, employers try to slip in the agreement that anything you do is their copyright or have rights to certain intellectual property.

Perhaps that’s something that somebody does not want to agree to, or maybe there needs to be a negotiation for those rights. Usually, that’s something that should be negotiated because it has value. Sometimes, in contracts, certain power parties can try to scoop up things of value, like intellectual property. Some parties can try to grab all of these things a client may not be thinking of simply by making it part of a contract. The next thing you know, you don’t have the rights you thought you did.

For more information on Pitfalls Faced By Businesses In Florida, an initial consultation is your next best step. Get the information and legal answers you are seeking by calling (904) 316-2527 today.