In the simplest terms, consideration is value. Under California contract law, mutual consideration (the exchange of value) is an essential element in the formation of a contract. Without it, a California court will (as will all courts across the country) most likely deem a contract unenforceable. For instance, consideration is…
Remedies (types of relief sought by injured parties) can be either legal or equitable in nature. The recovery of money damages (monetary damages) is a legal remedy. An equitable remedy is designed to provide more flexible relief to aggrieved parties. The goal of equitable remedies is fairness. Injunctive relief where…
Generally, parties are liable for their own negligent conduct. An indemnity provision in a contract reallocates this liability from one party to another. Viewed practically, an indemnity clause shifts insurance obligations from one party (“indemnitee”) to another party (“indemnitor”). Under an indemnity clause, the indemnitor agrees to pay the indemnitee for losses…
Under California law, oral contracts (verbal agreements) are generally valid and enforceable. However, due to the uncertainty inherent in oral agreements, in some circumstances, a written record of the contract is required to make it legally binding. California has statutory provisions, codified in Cal. Civ. Code. section 1624 and commonly…
The best advice an attorney can give a client regarding any type of a business agreement is to “get it in writing”. Too often, inexperienced business owners rely upon “hand-shake” verbal agreements to accomplish commercial transactions. See “Why Oral Partnerships Are a Bad Idea.” In California, oral contracts are legally binding. …
There are countless franchise opportunities available to San Diego entrepreneurs. The majority of these opportunities are offered by out of state franchise companies. Purchasing and operating a franchise can be a lucrative option for those looking for alternatives to starting a new business from scratch. Franchises offer economies of scale,…
Continued from Negotiating Power – The Often Neglected Contract Position. In most cases, the party with the greater bargaining power presents a draft contract to the other and asks them to sign it as is. The draft will set forth the major contract terms already discussed by the parties such…
Because San Diego businesses routinely enter in to contracts with vendors, clients, customers and other partners, it is important that they are familiar with basic contract principles and the need for negotiating favorable contract terms. This is true whether or not they retain the services of a San Diego contract…
Continued from The Business Contract – Part Two. Integration Clauses: The integration clause states that the written contract entered into by the parties is their entire agreement. A typical clause reads: “This Agreement constitutes the entire agreement between the parties with respect to the subject matter of this Agreement…
Continued from Basic Business Contract Provisions – Part One. Mediation/Arbitration Clauses: Mediation and arbitration are alternative methods of conflict resolution. ADR (“Alternative Dispute Resolution”) has grown in popularity of late especially with judges. For the most part, ADR relieves pressure on overcrowded courts, reduces litigation costs and results in faster…