Essential Business
Contracts. Some clients are proactive and prepare written agreements and others
prefer a verbal agreement with a good handshake. Both oral and written
agreements are legally enforceable, but written agreements help the court by
providing a tangible form of the terms of the agreement. To be certain, your
foundational corporate governance records should be written. This includes an
operating agreement (LLC) or bylaws and a shareholders agreement to address
succession planning, rights of first refusal, and handling deadlocks. Once the
company is established and has written governance documents, clients should
consider creating a contract form with standard terms and conditions. Many
clients post their standard terms and conditions online and simply reference
the terms in the written agreement with a customer or client. If you have
employees or use independent contractors, it is helpful to use employment contracts
or independent contractor agreements. Often, an independent contractor will
present a written contract to you for consideration. Rarely will an employee
offer a contract. That burden falls to you – the employer. You may not need
contracts for all of your employees, but they can be very helpful for key
employees and higher level marketing employees. At a minimum, you want to use
the document to provide some level of trade secret protection and to implement
you restrictive covenants program. Some clients produce an employee handbook
and/or company policies. These are helpful, but they must be followed and
enforced in a uniform fashion. Selective enforcement leads to loss of
enforcement. A written lease agreement is a must if you rent space. Never rely
on an oral lease unless you like paying money to civil litigators after you have
a problem. Restrictive Covenants – for key employees and sales-people, I
recommend using non-compete, non-solicitation, and confidentiality agreements.
If you have trade secrets and want to use the Illinois Defense of Trade Secrets
Act, make sure you provide the statutory disclosures. License agreements are
vital for software or intellectual property. Finally, while it is not a
contract, if you have key marketing materials, logos or slogans, you should
consider filing an appropriate copyright or trademark application. The
statutory protections and remedies are valuable, especially if you ever need to
go to court. Please remember that copyrights, trademarks, and domain
names are all separate matters. Getting a trademark does not reserve a domain
name and getting a domain name does not create a registered trademark.