Force MajeureThis is a section in your contract that excuses the parties from performing obligations when a party cannot perform due to circumstances outside of their control. It’s important to not only review carefully how a force majeure event is defined, but also ensure you have a process around how the parties will handle this situation, such as meeting daily to discuss a solution. I also recommend including a right to terminate if the force majeure event continues for a period of time. If you are entering into an agreement with a critical vendor or partner, this can be essential!
TerminationReview the terms that describe how the parties can terminate the contract and any notice periods required. It is also important to determine whether the notice is required to be in writing and delivered in a certain manner per the notice section of the contract.
Effect of TerminationThis section should summarize what happens in the event of a termination, such as delivery of products, return of confidential information, payment obligations upon termination and transition services, if required.
Dispute Resolution ProcessIdeally your contract includes a process around how the parties will handle disputes, such as providing written notice to the other party and requiring the other party to respond within a certain time. If the dispute is not resolved within a particular amount of time, then you may want to require that the parties escalate to executives or the CEO. If the parties are still unable to resolve the dispute within a certain amount of time, then either party may proceed to either arbitration or filing a claim depending on the terms of the contract.
Governing Law and JurisdictionThis section sets forth the State law that governs the agreement and the location of any claims or arbitration. The State law that you choose can have a significant impact on the outcome of the case and so you’ll want to choose a State that makes sense for your business, and you’ll want to ensure the jurisdiction is convenient. It’s important to ensure you re-review your contracts on a regular basis to ensure they are tailored to your company and include the terms and conditions necessary to protect what you’re working so hard for. No one ever enters into a contract thinking that things will go wrong, but it’s essential to include terms to protect you just in case they do.
Tricia Meyer is Founder + Managing Attorney of Meyer Law, one of the fastest growing law firms in the United States. Meyer helps entrepreneurs and technology companies from startups to large corporations with day-to-day matters and notable clients include companies that have appeared on Shark Tank to companies gracing the Inc. 500 to some of the largest companies in the world.
Tricia has been named on the Forbes Next 1000 list, is one of the Most Influential Female Lawyers in Chicago according to Crain’s Chicago Business and been recognized as a top 10 technology lawyer.
As an entrepreneur and a lawyer, Meyer has a unique perspective and has mentored thousands of startups and scaling companies at tech incubators and accelerators across the United States such as 1871, WeWork Labs and Techstars. Tricia has been featured in Inc., Crain’s, Chicago Tribune, NBC Chicago, American Express OPEN Forum, and more. Learn more at www.MeetMeyerLaw.com and follow Meyer Law’s story on Instagram @loveyourlawyer.