CONTRACT REVIEW AND DRAFTING PROTECTION

We all sign contracts daily.  Most of us never read them and just sign our names without any further thought.  There is no such thing as a standard contract.  Consumer contracts often have protections stated in the law which will over-ride any unfair provision in the contract (though not always). A commercial contract executed in connection with business can say almost anything, and little can be done to protect yourself from serious consequences unless you read it first, and then insist on changes to protect your position.

We review contracts almost daily for our clients, and have found some amazing provisions which were subsequently changed after our review. The changes we have suggested have often saved clients tens of thousands of dollars or more. Just some of the objectionable and surprising provisions that our clients did not know about, but were found when we reviewed the contract include:

• Leases- Though equipment lease sales told client at the end of the lease, they could buy the equipment for $10, the lease actually said they had to pay fair market value to purchase it at the end of the lease.

• Casualty Insurance: A horse stable was not covered by the policy since it  was a prefab building that was bolted together.

• Warranty - Replacement and repair liability was extinguished if the client took the property outside of the U.S.

• Real Estate Loans - Adding anyone to the title who did not original qualify for the loan would allow the lender to accerlate the loan and require immediate full payment.

• Contract- Any disputes must be resolved using the laws of another state and in the courts of that other state.

• Employment Contract - The description of the employee executives duties was so vague it would be impossible to measure his performance for bonuses, or lack of performance for termination.

• Escrow Contract - The escrow holder was not liable if it failed to notify any party of its inability to close the escrow by the set date.

Contact us when you need a contract written up or one reviewed with a critical eye. It is a lot less expensive solving problems on the front end of a transaction rather than later. Lawsuits are very expensive and often difficult to win even though you may be the innocent party.

Don D. Nelson, Attorney at Law, C.P.A.
U.S. Phone (949) 481-4094   U.S. Fax (949)218-6483
Email: attorneycpa@dondnelson.com  or  email web form

Don D. Nelson, Attorney, CPA - 27 years experienced