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Len Watkins
Joshua Genser
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Offices
in Point Richmond and Emeryville
125 Park Place, Suite 210
Point Richmond, CA 94801
Phone: 510-237-6916
Fax: 510-236-9851
2200 Powell Street, Suite 890
The Watergate Office Towers
Emeryville, CA 94608
Phone: 510-237-6916
Fax: 510-236-9851
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Contracts
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If
you are about to enter into any kind of transaction
at all, whether or not you are being asked to sign
a piece of paper that says "contract" on the top, you are entering into a contract. If the transaction is large enough
or risky enough, you should take precautions. While
you needn’t consult a lawyer every time you make a
retail purchase, you should consider doing so any time
the transaction involves any future responsibilities
on your part or on the other party’s part.
Whenever practical, the contract should be in writing. Written contracts
can be read later, and no one can disagree over their contents. Oral
contracts, with a few exceptions, are every bit as enforceable as
written contracts, but they are harder to prove.
The written terms of the contract will matter, however, only if there
is a disagreement between the parties. That is, the parties to a
contract can breach that contract freely anytime they want to, without
consequence, as long as both parties agree.
It is only when the parties no longer agree or cannot get along that
one will attempt to enforce the terms of the written contract on
the other. Contracts, therefore, should be drafted with potential
future disagreements in mind.
Controversies between parties to a contract usually arise from ambiguities
in the contract, unanticipated changes in market conditions, and
the failure to consider who bears the risks of failure. Unambiguous
language, attempts to anticipate all possible futures, and allocation
of various foreseeable risks will minimize the possibility of future
litigation. |
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of problem areas in contracts include: |
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The
term of the contract, or how long it lasts. If
you’re not careful, you could obligate yourself
for much longer than you intend, with no legal
means of escaping. Office equipment leases are
notorious for this problem, with lessees finding
themselves wedded to no longer needed or substandard
equipment because they can’t get out of the lease. |
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The
price. Figuring out the price is not always simple,
but it should be. Even if the price is to be
determined by some sort of formula, the formula
should be easy to use, and there should be limits
on unanticipated fluctuations in the price. |
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Risk.
What if, through no fault of either party, performance
becomes impossible? Who pays if some property
needs to be repaired? Is performance excused
if some new law makes performance outrageously
expensive? Who has to maintain the insurance
coverage on the leased equipment? Can you get
out of the contract under any circumstances?
Can the other party? Are there circumstances
under which one party or the other should be
able to escape its obligations? |
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Contracts
should also be drafted to minimize the costs of resolving
differences between the parties. Litigation is not
the only method of resolving disagreements between
the parties. Although contracts should be complete,
they need not be lengthy or incomprehensible. Plain
English can be every bit as precise as "legalese," and the most important consideration is that the parties understand the contract.
If the contract is non-negotiable, it is called a contract of "adhesion." Even
if you have no bargaining power to negotiate for terms more favorable
to you, you should still be sure you thoroughly understand the terms
of the contract you are signing.
Consult a lawyer before you enter into any contract, oral or written.
It’s a lot cheaper to find out what you’re getting into up front
than to litigate over it later.
The attorneys at Genser & Watkins
LLP have been negotiating, drafting and reviewing contracts and litigating
contractual disputes since 1983. Call for an appointment, 510-237-6916. |
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