Guidelines for Drafting a Business Contract in Los Angeles, CA

By: Jack Chammas Glendale Business Litigation Lawyer

Many of us never see the need to draft proper business agreements during our day to day interactions at our work or place of business. And the only time we really pay attention to contracts is when it’s too late. When a dispute comes up with the other party to the agreement. That is when we rush to contract to see what we signed and agreed to. Most of the time, we realize that we agreed to terms that are not to our favor. And a simple attention on our part at the beginning of the relationship would have saved us a lot of money, headache, and legal fees. These are some of the guidelines to look for in drafting an agreement.

1. Term

How long do we want to be in business with the other side? Is it to our advantage to have a long term agreement or a short term. A long term could be 5 years or more. Short term could be month to month with auto 30 day renewals. We must study and determine what are the advantages and disadvantages to our business to be in a short verses long term relationship.

2. Termination

If we start the relationship and realize that the other side is difficult to work with. Or if we need to get out of the deal due to strategic reasons involving our competitors or other possible client, how easy is it for us to terminate the agreement? Are we able to terminate based on certain pre-set guidelines agreed to at the outset? Or would we be held liable for a breach of contract if we terminate? These are super important issues to address at the beginning of any relationship. Before you go in, you need to determine the way out.

3. Fees / Rates

Fees and rates are usually discussed at the outset. They must be clear, precise, and detailed. Most disputes occur between parties are due to a disagreement in pricing or price increases as a result of increase in overhead costs.

4. Liability/Indemnification

Each party must be held liable for its actions. And to be a fair and enforceable agreement, the liability must be properly addressed and distributed among the parties, each based on its respective responsibilities throughout the term of the relationship.

Indemnification plays an important roles especially when one party is more exposed to the end-user/consumer than the other.

5. Dispute Settlement

Many do not address this matter. What happens in the event of a dispute? What law applies? Where should we litigate this case, which state, which court. Is it economical to go through mediation, arbitration, jury trial, or other forms of alternative dispute resolution. If the parties agree from the beginning on the manner they prefer to resolve their disputes, if they arise, that would save them both unnecessary litigation in courts where most of time they would litigation the venue and jurisdiction before they even get to litigated the actual dispute itself.

6. Penalties

Penalties are used as an effective deterrent. Liquidated Damages among other things, if drafted properly can save the parties the hassle of litigation.

7. Billing Procedures

Many business relationships involve complicated monthly or other periodic billing. Each party must designate specific resources just to review billing and make sure its accurate and up to date. The agreement needs to be properly inclusive of necessary Grace Periods that need to be afforded to either party and a proper mechanism of dispute resolution in the event of billing disputes. A pre-agreed mechanism of resolving billing disputes saves the relationship and reduces the risk of tension between the parties. Mistakes happen, and the relationship should not be jeopardized as a result.

8. Flexibility, Stability, Tie-ins

Overall, an agreement must be flexible as to its terms in order to allow the parties room to work around constantly changing circumstances. Stability in an agreement allows the parties to rely on each other as they consider other long term relationships, mergers, and acquisitions. And all these pieces of the puzzle should be tied in with surgical precision to give you the final business agreement best fit for your company and your business future.

Jack Chammas is a business attorney in Glendale, California.

The controversial, much-publicised suit from David Harner against several auto glass TPAs and insurers has just undergone a change: Hanover, one of the insurers listed in the suit as being among the insurers who failed to pay claims due, has been removed from the list.

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This is the latest development in what is turning out to be a true David vs. Goliath story, as Harner, the owner of an auto glass business in Westchester, takes on some of the biggest auto insurers and TPAs in the business. Safelite and its parent company are named in the suit, for instance, as indeed are LYNX and its own parent company, PGW. The allegations are myriad, and they echo some of the most common allegations being made by many independents in the auto glass industry against the big boys, from failure to pay allegations to charges of unfair business practices.

The removal of Hanover from the failure to pay list is the second such removal of the insurer from a list having to do with allegations by Harner. In July, Harner also removed Hanover from the list of insurers that he claimed had committed a breach of contract, being careful to stipulate that said removal would have no bearing on other actions being taken against the insurance company.

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Further comment has yet to be found regarding this recent development, at least from the concerned parties themselves, but observers say it may be that Hanover has taken action to pay the claims alleged by Harner since the filing of the suit, as indeed happened with another company in the list of names Harner claimed to have perpetrated a breach of contract. This other company, Unitrin, was taken off the list by Harner subsequent to its payment of the fees due to Harner’s company.

What is really getting people’s attention about Harner’s case, though, would be the allegations he makes about how insurers are providing a set of scripted statements to agents to use with policyholders that tend to guide said policyholders towards preferred auto glass repair shops and away from independents. This is an allegation that has been levelled specifically against LYNX, with Harner going so far as to actually provide script examples in his case.

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Why does this get so much attention? Because many independents in the auto glass industry have been making similar claims for some time now, saying that the TPA-insurer-repairer relationships being built by the bigger companies in the trade are beginning to constitute unfair business practices that see majority of clients being diverted by insurance handlers to companies that are actually affiliated with their own, leading to a kind of monopoly that excludes smaller players from the game. While this is still under contention, Harner’s case is being expected to provide some prime instruction once an outcome is finally found, which is why so many people in the industry are watching it.

One of the biggest problems with termite control has always been the location of termite colonies and identification of infestations. That is to say that there are sometimes issues with the application of termite control measures because of the uncertainty over whether or not there is only one colony being targeted, whether or not the original colony has been eradicated successfully after certain termite treatments have been applied, and where the boundaries of a particular termite colony’s infestation lie.

Fortunately, however, researchers have been working to come up with an answer to these problems. To that end, two entomologists from CTAHR have come up with a pretty promising solution: DNA fingerprinting.

Termite Control Scottsdale has more information on this topic.

DNA fingerprinting, which is sometimes called DNA profiling, DNA testing, or DNA typing), is a technique most often used by scientists in the forensic field of research to help them identify individual specimens according to DNA profiles. Since each DNA fingerprint is unique, this permits researchers to distinguish individuals from each other; nonetheless, given that DNA fingerprints actually do exhibit the traits of heredity when related individuals’ “fingerprints” are compared, familial links may be recognised by profiling a certain individual’s DNA fingerprint as bearing some “type characteristics” that may be seen in a related individual’s fingerprint.

While this is more popularly known to be applied to humans for various medical and criminal situations, it is apparently being applied now to termites. The CTAHR researchers, Claude Husseneder and J. Kenneth Grace, have used DNA fingerprinting to identify individual termites and also trace their lineages, permitting the scientists to identify related termites and ones not related to each other.

You might well wonder what this has to do with termite control. So what if we know two termites are siblings or cousins, you might ask. Well, as suggested earlier, one of the issues termite treatment specialists constantly have to deal with is the question of whether or not are dealing with only one colony or another. This can help them allocate resources appropriately and more effectively. If DNA fingerprinting permits them to test termites and identify familial links between specimens (termites from the same colony are relatives and termites from different colonies are not), they shall have a ready answer to that question.

This goes on to cover the other issues mentioned before. The technology shall also permit termite control experts to figure out where each colony’s territories lie and whether or not they were successful in eradicating the first (first to be detected, to be precise) infestation. This helps them monitor and deal with any possible reappearances or resurgence in the termites after termite treatment has already been executed, making them more effective in their job of eliminating the pests.

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The California-based Intersil has just released a fascinating new product that has seen automotive manufacturers standing up and taking notice.  Its ISL76671, an automotive-approved ambient light sensor, is the first of its kind that is capable of handling temperatures ranging from -40 degrees to 221 degrees Fahrenheit (-40 and 105 degrees in Celsius, respectively).  This temperature range is important because it ultimately determines the utility of the sensor when applied to auto glass and plastics in automotives, which generally have that set temperature range.

Most ambient light sensors at the moment are incapable of detecting lower light levels, and this is why the auto glass and auto plastics industry is already considering this sensor a godsend.  The ISL76671 boasts the capacity to sense incident light to levels as low as 0.01 lux—and does it with a spectral response that actually approaches human levels.  This extreme sensitivity makes it a promising ambient light sensor for auto glass due to its ability to measure low light even behind tints and thick glass or plastic layers. It also has an industry-leading response time of a mere 30 milliseconds.

Based specifically in Milpitas, Intersil is known for its development, research, and production of analogue semiconductors and related parts. It actually began most of its work in 2003, when it sold off its wireless branch.  The company then went straight into some of the most promising markets possible: the market for flat-panels, the market for optical storage, and the market for power management.  The company has an extensive array of products that go far beyond the ISL76671 ambient light sensor for auto glass and plastic applications, and has long provided materials and solutions for the military as well as space organisations of the government.

Intersil’s contribution to automotive glass development is also just one more step for the auto glass and plastic trade.  The auto glass industry has been in continuous growth for years, and with plastics trying to catch up, car buyers in the future can safely look forward to radically new technologies in their options.  A small caveat that has to be provided, however, is that it is unlikely for very recently released technologies—the ISL76671 ambient light sensor included—to show up in cars a decade from now.  The truth is that the auto manufacturing world works such that cars five or even ten years into the future have already been designed by the auto makers of today.  This means that the cars being designed at this present time would be likely to reach the market over a decade or so later.  Hence, it seems that the auto glass of the next cars shall have to wait before items such as the ISL76671 are integrated properly in it. Windshield Replacement Phoenix