Preventative Lawyering
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Contracts.
A good contract is the basis for any smooth business relationship. Contracts are essential. Not only do they clarify roles, responsibilities and ownership issues, they limit potential liability. Attorneys can help you draw up a contract that covers all your bases, but if you want to use your attorney efficiently, do some homework first.
Sit down and in your own words define the relationship you're setting up and describe those who you're setting it up with. Anticipate industry-specific issues that affect your risks and liabilities in the contract. Point out best and worst-case scenarios that affect the success of your product and how that will affect the contracted parties. Address ownership issues. Now set up a meeting with your lawyer.
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You can add protective steps to your contracts, which may help in cases that lead to litigation. Include a provision in contracts that states that if you need to sue, legal fees are recoverable for non-performance or payment. You will probably have to include a reciprocal clause for the other party. You could also include a dispute resolution clause that specifies the use of binding arbitration. You can even specify a mutually agreed upon arbitrator in advance.
Insurance
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Don't be intimidated by complicated language. Ask all the questions you need to thoroughly understand your policy. If your policy is just incomprehensible, ask your agent to suggest a 'plain language' policy.
Legally, any renewal is considered a new contract. Don't assume you are getting the same coverage! Read the renewal policy carefully. Ask your agent to confirm in writing whether there are any changes in the renewed policy, and, if so, then what are they so that you are not surprised after a loss.
If a claim is filed against you, immediately notify your insurance company and agent by certified letter, even if you don't think you're covered. This is your responsibility. Failure to notify your insurer of an insurance claim is a cause for non-payment of your claim.
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If you have a dispute with your insurance company, consult your policy to find out how much time you have to start a lawsuit and contact an attorney well before that time expires.
Remember, the money you spend now for legal fees to prevent future problems is a drop in the bucket compared to the fees you will pay in future litigation. If you use your attorney wisely, it could be one of the best investments you make.
About the Author
Betsy Sweetser is a partner in complex non-personal injury civil litigation and appellate work with the law firm Pellettieri, Rabstein and Altman at 100 Nassau Park Blvd., Princeton, NJ. Phone: 609-520-0900; http://www.pralaw.com