Attention Small Businesses Owners: Sometimes You Get What You Pay For
One of my favorite aspects about being a Florida collections attorney is representing Florida small business owners who are having difficulty collecting on their past due receivables. As the son of small business owner, I know how important it is for businesses to collect their receivables. Unfortunately, in some instances I have to turn away potential clients, not because I don’t have the time to help them, but because the potential clients do not have a written contract prepared by an attorney.
For example, I recently turned away a potential client who thought that she could save a few hundred dollars by using a contract she found on an online website. As luck would have it, her big, out-of-state client defaulted under that contract. Because this was a generic contract, she had no recourse to sue the client in Florida where she is located. Had she come to me first, I would have prepared a contract that would have enabled her to seek legal redress in her home town.
Thus, before you download that online contract, here are a few provisions that small business owners should be sure to have included in their business contracts:
Forum Selection Clause: A forum selection clause ensures that a lawsuit has to be filed in a certain locality, most often close to the main office of a party. Not only does it save time and money by filing suit close to a party’s main office, but judges tend to become familiar with a party and out-of-state customers are required to appear in a court where a party is located, saving the party both time and money.
Jury Trial Waiver: Jury trials are very expensive and require a lot more preparation than bench trials, which are before a judge. Moreover, juries are comprised of individuals without legal experience who may have their own pre-conceived biases. Often times, juries will render verdicts based on their own pre-conceived biases rather than the law or facts in a case. An example of cases where biases can come into play occurs in personal injury cases, where some juries have awarded hundreds of thousands of dollars when the injured parties were clearly at fault.
Liquidated Damages Clause: Liquidated damages are damages whose amount the parties designate during the formation of a contract for the injured party to collect as compensation for a breach. Unliquidated damages are a sum of money that cannot be foreseen or assessed by a fixed formula. If a contract has a liquidated damages clause, a judge can make a determination as to damages without the need for a trial. If the damages are unliquidated and/or there is not a liquidated damages clause, a trial has to be held as to damages, forcing a small business to incur additional attorney’s fees and costs.
Merger and Integration Clause: A merger and integration clause prevents a party from later claiming that the contract does not reflect their entire understanding, was changed by a subsequent oral agreement, or is not consistent with prior examples. Without a merger and integration clause, disputes often become a matter of “he said, she said.” The merger and integration clause puts any oral discrepancies to rest and requires a court to make its rendering based on the written contract.
Force Majeure Clause: A force majeure clause is a provision that allows a party to suspend or terminate the performance of its obligations when certain circumstances beyond their control arise, making performance inadvisable, commercially impracticable, illegal, or impossible. If you own a small business in Davie, Florida, and a Category 4 hurricane is a direct hit on Hollywood, Florida, the odds are that it will be months before your business can be back in operation. Force majeure clauses protect small businesses in these instances.
It's extremely important that Florida small businesses utilize written contracts drafted by a licensed Florida attorney. A well-drafted written contract protects Florida small businesses and allows Florida small businesses to pursue former clients who default on the written agreements in court.
Founded in 1997, Gill Law Firm represents small, medium and large corporations in commercial debt recovery, small business and nonprofit startups throughout the state of Florida. To find out how the firm may help your company collect its unpaid deficiency judgments, please contact A. Wayne Gill, Esq. via email at email@example.com or by phone at (561) 454-0301.
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