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How To Review A Contract Like A Lawyer

contract
how to review a contract like a lawyer

Master the Art of Contract Review with Expert Tips

What is the first thing you do when someone hands you a contract?

Anxious business owners who want to get the deal done may scan the agreement before signing it. 

Likewise, the more cautious business owners might want to read the agreement before committing. But the thought of plugging through the agreement may be too daunting, so they shove it to the bottom of their work pile to read later.

Does this sound familiar to you?

You may have done one of these things as a business owner at some point.

Regarding contracts, it is always better to be safe than sorry.

  • Reading through an agreement before signing is essential to understand what you agree to.
  • By signing a contract without reading it, you have essentially agreed to all the terms and conditions listed in the contract without understanding.
  • This can be a risky move, as you may not be aware of all of the potential consequences of signing the contract.
  • If you encounter any problems or issues after signing the agreement, it cannot be easy to get out of it.

So, before you sign anything, please read through it carefully.

Have you ever wondered how lawyers can review the lengthiest contracts at lightning speed?

  • Well, it’s no secret that we routinely use checklists when reviewing contracts.
  • In our experience, checklists are essential when reviewing contracts for the first time, as it can be easy to overlook critical items.
  • Using a list, we can ensure that every detail is noticed.
  • You, too, can review your contract in 10 minutes.

 

5 Tips to Review Your Contract

  • Note the specific requirements in the agreement.
  • Compare the requirements in the agreement to the project specifications.
  • Ensure that all the required information is included in the agreement, such as contact information, payment terms, and delivery dates.
  • Review the terms and conditions, and ensure they are acceptable.
  • Ask any questions and ensure your queries are answered.

What To Look for During a Contract Review

Contracts can be tricky, and crocodiles are always lurking in the dark. You need to know where to look for these crocodiles.

Here are some places where you can find crocodiles during a contract review.

 

1. Key Clauses & Terms
  • Confidentiality clauses protect sensitive company information.
  • Indemnification clauses protect the company from being held liable for any damages or legal costs.
  • Termination clauses outline the conditions under which the contract can be ended.
  • Dispute resolution clauses specify how any disputes will be resolved.
  • Such clauses are all critical sections in an agreement.
  • Therefore, they should be given extra attention to ensure the wordings are acceptable.

 

2. Termination & Renewal Terms
  • Key clauses to look for include automatic renewal language and opt-out windows.
  • Automatic renewals clauses usually mean that the agreement will generally renew automatically at the end of the current term.
  • While the clause usually allows for cancellation within a set notice period, many business owners forget to cancel before the deadline. They are then stuck in an agreement they no longer want or need.

3. Clear, Unambiguous Language

  • One issue that often arises when reviewing an agreement is ambiguous language.
  • This is when the wording of a sentence needs to be clarified.
  • This can lead to different interpretations by the parties involved.
  • Vague or unclear terms can lead to conflict. It is, best to revise the wording to be more precise.

4. Default Terms

  • Default clauses set out the terms which would apply where one party fails to meet their obligations.
  • Knowing the potential consequences can help prevent unpleasant surprises down the road.

 

When reviewing a contract, it is essential to remember to focus on your top 5 concerns and to be on the lookout for any potential crocodiles hidden in the agreement.
 

By using this simple 10-minute review system, you can ensure that your contract will enforce your business deal and protect your interests.

Need help reviewing your contract? We offer video consultation via Lawyer Anywhere so that you can get the help you need. Contact us today to get started.

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Disguising Your Employees As Independent Contractors?

employees
disguising your employees as independent contractors

The Dangers of Employee Misclassification

Many of Singapore’s Small & Medium Enterprises have, as a cost-cutting measure, turned to the services of freelance contractors to meet their workforce needs instead of hiring employees.

While the use of freelance contractors does provide cost savings, business owners must have a clear understanding of who qualifies as freelance contractors.

In recent years, the Singapore Courts have come down hard on companies who hire “temps” or freelance contractors to avoid paying for employee benefits.

The Courts may disagree that your hired hand is not an “employee” but a “freelance contractor” based on your declaration.

Why Does the Difference Matter?

  • When you misclassify workers as “freelance contractors” who are your employees, you expose your business to several significant legal liabilities.
  • These can include fines and penalties for violating labour laws, such as the Workmen’s Compensation Act, the Employment Act, and the Central Provident Fund Act.
  • In addition, not complying with your statutory obligations to your employees can cause significant damage to your business.

Factors In Determining Employer-Employee Relationship

  • The Court looks at various factors to determine if an employer-employee relationship exists.
  • These include the actual mechanices of the relationship, as well as economic considerations.
  • For example, the Court will look at how the workers are paid, whether they provide benefits, and how much control the employer has over their work.
  • Additionally, the Court will examine the parties’ intent and the work’s nature.
  • Ultimately, the Court will consider all the facts and circumstances to decide.

Degree of Control

  • One important consideration is the degree of control over the worker’s activities.
  • In a classic employer-employee relationship, the employee is generally obligated to follow the employer’s instructions in all tasks that lead up to the final work output.
  • Whereas in the case of a freelance contractor, the hirer’s control is often limited to the scope of the project and its deliverables while having little say over how the worker should perform each of the tasks that make up the project.
  • The freelance contractor’s obligations to the hirer are to complete the project/task.
  • In contrast, the execution of tasks involved in the deliverables is left to the freelance contractor.
  • The higher the control over the worker’s activities, the more likely the “employer-employee” relationship exists. This is because the employer is in a better position to dictate the terms and conditions of the work, and the worker is in a less advantageous position to negotiate. As a result, the worker is more likely to be considered an employee, and the employer is more likely to be considered the employer.

Factors of Production

  • Another critical consideration in determining whether an employer-employee relationship exists is the ownership of factors of production.
  • For example, who provides the tools and equipment necessary for the job, as well as the place of work?
  • If the hirer provides these, it is more likely that an employer-employee relationship exists. Again, this is because the hirer has more control over the worker (“employee”) in this situation.

Financial Control

  • The third important consideration when determining the nature of the working relationship is the degree of financial control for services rendered.
  • For example, is the payment for services made upon completion of the project/task or on a regular periodic basis?
  • Suppose payment is made upon completion of the project/task. In that case, it is more likely to be viewed as a freelance contractor relationship.
  • On the other hand, if payment is made regularly, it is more likely to be considered an employer-employee relationship.

Other Factors

  • The Courts have considered several other factors when determining whether or not an employer-employee relationship exists.
  • For example, the Courts will look at the terms of the agreement between the parties, such as how long the agreement is for, the nature of the job or services to be performed, etc.

What Can I Do To Minimise My Liability?

  • While some business owners have avoided legal liability through mis-characterisation, others have paid a high price for disgusing their employees as freelance contractors.
  • The rule of thumb is “If you treat the worker as an employee, so will the authorities.”

Is your temp a freelance contractor or an employee? We offer video consultation via Lawyer Anywhere so that you can get the help you need. Contact us today to get started!

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Home-Based Businesses Need Contracts Too!

home-based
home-based businesses

Essential Legal Advice for Home-Based Businesses

With the development of technology, it is now possible to have a home office that is just as functional as a traditional office.

There are several benefits to working from home, including lower overhead costs, greater flexibility, and less stress. In addition, a home office can be a great way to get some work done while caring for children or pets.

If you are a business owner who operates out of your home, you need contracts too!

Need For Contracts

  • Working from home doesn’t mean you don’t need contracts.
  • On the contrary, you may need them even more because of the lack of formal structure. 
  • A contract can help protect both the business and the client.
  • A contract also helps to establish clear expectations and guidelines for the work to be done.

Need For Systems

  • A well-run business is systematic.
  • The formal agreements will help you systematise your business.
  • However, many home-based business owners need help to develop dependable systems for running their businesses. They may think they can wing it because they are away from an office. But that’s not how a business should be run.
  • A well-run business has systems in place for every aspect of its operation. This includes marketing and sales, customer service, and financial management.
  • With these systems in place, you can depend on your business to run smoothly, no matter the challenges.

Need For Formal Agreements

  • This begins with formal agreements with your employees, customers, and other key stakeholders.
  • By putting these agreements in writing, you are setting the stage for a more successful business.
  • The formal agreements help avoid costly lawsuits.
  • The correct contracts can help you collect what you’re owed.
  • So, what are these legal agreements?

Must Have Agreements For Home Based Business

There are a variety of different contracts that you may need for your home-based business.

However, the MUST-HAVE agreements for home-based businesses are as follows:-

Service Contracts

Service Contracts ensure that the service provider and recipient understand what is expected of each party. This can help to avoid misunderstandings and disputes.

Key details to be included in Services Contracts are:

    1.   the services to be provided,
    2.   the price, the payment schedule,
    3.   the cancellation policy, 
    4.   the dispute resolution process.

Sales Contracts

Sales Contracts set expectations for both the buyer and the seller, and document the purchase or sale of goods or services.

Key details to be included in a Sales Contract are:

    1. The names and addresses of the parties to the contract.
    2.   The date of the contract.
    3.   A statement of the parties’ intent to enter into a contract.
    4.   The subject matter of the contract.
    5.   The price and terms of payment.
    6.   The delivery date and method of delivery.

Employment Agreement

  • No business succeeds without help from loyal and dedicated employees. 
  • An Employment Agreement aims to set out the terms and conditions of an employee’s relationship with their employer.
  • This includes an outline of the compensation that the employee will receive, as well as any benefits that they are entitled to.
  • In addition, the employment agreement can provide a non-competition clause that prevents the threat of direct competition by a departing employee.
  • Having an employment agreement in place is essential, as it can help clarify the expectations and roles of both the employee and the employer.

Partnership Agreement

  • A Partnership Agreement is a MUST-HAVE document if you run your business with your partners.
  • The most common dispute between partners is when a partner wants to “exit” the company.
  • The Partnership Agreement establishes the rules and procedures for partners to exit the business.
  • By having a Partnership Agreement in place, both partners and the business can operate with a clear understanding of the rules governing such exit.
  • This can help to avoid disputes and disagreements between shareholders.
Home-based businesses can be a great way to gain more control over your life.

Still, it’s essential to realise that much work goes into running a successful business from home.

Having a home-based business is a lot like having any other business. It needs to be systematic to be successful.

The formal agreements with customers and suppliers can help you systematise your business and make it more successful.

With the proper planning and execution, your home-based business can be a great success.

Need assistance on how to draft contracts for your Home-Based Business? Skip the hassle of waiting to make an appointment with a lawyer. We offer video consultation via Lawyer Anywhere so that you can get the help you need. Contact us today to get started.

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Drop-Shipping – A Quick Money Solution … Is It Legal?

drop-shipping legal
drop-shipping - is it legal?

Drop-Shipping: The Quick Money Solution - Fact or Fiction?

Is drop-shipping legal? The simple answer is YES.

Drop-shipping is a legitimate business model many entrepreneurs have used to build successful eCommerce stores. However, you need to know some legal requirements and considerations before launching your website.

What Is Drop-Shipping?

  • Drop-shipping is an arrangement whereby a supplier agrees to sell goods to a retailer, who sells the goods to customers. 
  • The retailer does not take possession of the goods but acts as an intermediary between the supplier and the customer. 
  • There is no specific law relating to such arrangements. Still, it is governed by general contract law, agency law, and logistics principles.
  • A contract or agreement binds the supplier and the seller in a typical drop-shipping arrangement. 
  • Many major eCommerce platforms, such as AliExpress, Amazon, eBay, and others, have recognised and allowed drop-shipping, but with strict terms and conditions that the seller must follow. For example, Amazon does not allow a drop-shipping seller to sell items from suppliers like Amazon itself or suppliers already selling on the platform.
  • Singapore has no specific regulations or laws governing the drop-shipping industry. This freedom and discretion allow sellers and suppliers to regulate their relationships as they see fit. 
  • While this lack of regulation may seem chaotic, it allows for great creativity and innovation within the industry.

Key Clauses For Drop-Shipping Contracts

When working with a drop-shipping supplier, you’ll need to pay attention to the following 3 key clauses.

  • Delivery – You must be clear about the delivery terms. This means that you will need to agree on the delivery date and time, and you will also need to agree on who will be responsible for the delivery costs.
  • Payment Terms – You must agree on the payment terms. This means you must agree on when and how the supplier will pay for the goods they provide.
  • Refund and Cancellations – You must agree to the return policy. This means that you will need to agree on what will happen if the delivered goods are not as described or if they are damaged.
  •  

Other Precautions

  • Like any other business, drop-shipping businesses are also susceptible to legal risks if they do not take the proper precautions.
  • To reduce legal risk, you should take note of the following steps to protect yourself from legal liabilities:-
    • Obtain A Business Licence – This goes a long way regarding taxation on your products and profits and limits your liability if an issue arises. In addition, it helps improve the legitimacy of your store in the eyes of consumers and suppliers.
    • Create Documents That Outline Your Business Practices – This includes having a refund policy, outlining your legal agreements, website terms and conditions, privacy policy, and any product and practice disclaimers you may require.
    • Follow Ethical ‘Best Practices’ In Marketing
      – Utilise eCommerce and social media platforms without manipulating the rules. Don’t be deceptive in your advertising; follow all email marketing rules and regulations.
    • Sell Safe And Appropriate Products – Work with reputable drop-shipping suppliers. Only sell genuine products which you are authorized to do so, particularly those trademarked or branded.

Despite what some YouTube experts assert, drop-shipping is not a get-rich-quick scheme.

It may seem like a tantalizing quick money solution, it’s essential to separate fact from fiction and understand that success in this industry requires dedication, hard work, and a well-thought-out strategy.

By acknowledging the competitive landscape and doing your due diligence, you can set yourself up for success and avoid the common pitfalls that plague many aspiring entrepreneurs.

Therefore, doing your homework before starting a drop-shipping business would be best. With a solid plan in place, you’ll be better equipped to navigate the complexities of international trade and secure profitable earnings.

So, don’t be fooled by the get-rich-quick promises, and instead, focus on building a sustainable and successful drop-shipping business that generates long-term wealth.

Every business is different. As such, the difficulties that you face will vary. We offer video consultation via Lawyer Anywhere and can help you navigate the ups and downs of starting and running your own company.

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Don’t Worry, It’s A Standard Contract

standard contract
dont worr,y, its a standard contract

Don't Fall For The "Standard Contract" Myth

Recently, after having found the perfect premises for our new office, we were given a thick set of documents (the Tenancy Agreement together with all the “standard” terms and conditions) and were told, “Can you please sign here, here and here?” 

So naturally, as lawyers, it was an occupational hazard that we had to go through all the documents and the small fine print.

Given that it was late in the afternoon, the estate agent seemed anxious to “seal the deal” and said, “Don’t worry, this is a standard contract. All the tenants sign the same documents.” 

We smiled and continued reading…

Questions To Ask Yourself : "How Often Have We "Signed" DOcuments Without Knowing the Terms & Conditions?"

  • Are you thinking to yourself –  “Well, this doesn’t apply to me. I don’t sign agreements often.”
  • Well, think again.
  • Would you be surprised to know that the average person signs around 12 agreements daily? 
  • This includes everything from contracts with your mobile service provider to membership forms for the gym. If you think you don’t sign agreements often, you will be surprised to know that most of us signing agreements without knowing that we have done so happens daily.
  • “Signing documents” includes imprinting your physical signature on a written document. 
  • It also includes situations when you click the “I AGREE” or “I ACCEPT” box.

What Are The Implications Of Your Actions?

  • When you sign a document, you legally agree to the terms within.
  • By clicking on an “I AGREE” or “I ACCEPT” box, you legally agree to the terms.
  • By doing either, you are giving up some legal rights. For example, if you sign a contract and then change your mind, you may be unable to get out of the contract without facing legal ramifications.
  • Similarly, if you click on an “I AGREE” or “I ACCEPT” box, you agree that you have read and understood the terms and that you are legally bound to them.
  • “But that’s not fair!”
  • Unfortunate, but true!
  • Is there any way out of it?
  • Contracts are legally binding agreements between parties. However, in some situations, a contract may not be enforceable even if it is signed.

The following are some of the everyday situations in which a contract may not be enforceable:-

  • Illegal Contracts – An illegal contract is prohibited by law.
  • Unconscionable Contracts – The contract is so unfair that it would be against public policy to enforce it.
  • Exclusion Clauses – Exclusion clauses can render a contract unenforceable if they are unreasonable. Exclusion clauses seek to absolve one party of all or part of their responsibilities and are generally considered unfair by courts.
  • Induced Contracts – Induced contracts are not typically enforceable in court. One party may have been coerced or misled into entering the agreement. The most common example of an induced contract is based on misrepresentation.

So what should we do? It’s probably okay to let it go for minor matters. However, you must read and understand all the terms and conditions you agree to for more significant transactions. You might find some onerous clauses slipped into the “standard” agreement by reading the agreement. In such situations, you may negotiate with the other party to delete or amend the particular clause.

Basic Action Tips

  • Read the whole agreement – every clause in the agreement.
  • Do you understand what you are reading? If not, ask someone.
  • Is the clause acceptable to you? If not, try to get it deleted or amended.
  • Only sign the agreement if you understand, or the other party refuses to delete or amend the clause. Get proper advice before signing.

If you’re looking for help reviewing a “standard contract”, speak to us over video consultation via Lawyer Anywhere.

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5 Secrets To Buying A Business

buying a business
secrets to buying a business

Secrets to Successful Business Acquisition

When looking to buy a business, you must know what you’re getting into.

Buying a business is exciting but can also be a minefield without the right advice.

That’s why we’ve compiled this list of 5 secrets to buying a business.

1. Buy What You Know

  • It’s always best to “Buy What You Know”.
  • This does not mean you need to know every single detail about the business. At the very least, you should understand the principles of the business you are buying. Looking at an industry you know and understand is the best place to start.
  • Next, make sure the business you’re interested in is something you’re capable of running.
  • Finally, don’t forget to factor in your skillset and experience – you don’t want to jump into a business that’s too challenging.

2. Do Your Homework

  • Starting a business can be a gratifying experience, but you must be upfront and honest with yourself; you’ve got much homework!
  • A few things to consider before purchasing: What is the business worth? What are the current financials? What is the company’s history? What are the potential risks and rewards? How well do you know the industry? How much money do you have to invest?
  • Representations made by the seller may not always be accurate, so you must verify those details on your own.

3. Get Your Finances Ready

  • Having your finances in order is essential before buying a business. Unfortunately, many people mistakenly believe that the business is the only asset they must worry about. The reality is that the business is just one piece of the puzzle.
  • If you’re looking to buy a business, it’s essential to ensure you’re financially ready. Financing a business can be tricky, so start by organising your finances. Calculate how much money you’ll need to cover the purchase price and monthly expenses, and save as much as possible.
  • When it comes to financing your business, you can take out a loan from a bank. Consider less traditional sources of finance, such as angel investors or venture capitalists. Friends, family, and fools may be potential sources of capital. These sources should be approached cautiously, as they may have ulterior motives or need to be made aware of the full extent of the investment.

4. Seek Professional Help

  • If you buying a business, make sure you have your “acquisition team” – your banker, accountant, and lawyer – to help you.
  • Your acquisition team is an absolute must to assist you in completing the necessary checks and verification. Once these checks and verification have been carried out, you will know precisely what you are buying and from whom you are buying.

5. Negotiate & Bargain

  • When buying a business, one must be aware of the dangers involved.
  • The critical consideration is to figure out what the business is worth.
  • It is essential to get a reasonable business valuation when considering buying it. Still, you should also be aware of the potential dangers involved in doing so.
  • Always figure out what the business is worth, and do not rely solely on the books of account to give you an accurate picture.

FINAL TIP: Always remember, if something doesn’t smell right, no matter how many months you’ve put into the process or how much you want the business, you should not go through with the deal. If everything goes well, your lawyer can help you finalise and sign the sale agreement; the company is legally yours.

Are you looking to buy a business? We offer consultations so that you can get the help you need.  We will walk you through the process and answer any questions you may have. Contact us today to get started.

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Memorandum of Understanding (MOU) & What They Achieve : The Ultimate Guide for Beginners

MOU
MOU

MOU : The Ultimate Guide for Beginners

Hey, What Happened? Didn’t We Sign the Memorandum of Understanding?

After many months of due diligence and engaging in rigorous negotiation, you finally “ink” a contract with your business partner.

You are sitting in your favourite coffee shop enjoying a cup of latte while daydreaming about the brand-new Ferrari that you are going to be able to buy now that your company is thriving. Then suddenly, you get an email that says the deal is off.

So, your fantasy of a lovely Ferrari dissipates as quickly as the coffee in your cup.

Your first thought is, “How can they do that? We have signed the MOU!”

You have obeyed the cardinal “Getting It In Writing” rule and assumed the deal is sealed.

Can you still be left high and dry by the dishonourable reneging party with no legal recourse?

Very often in the business world, legalistic sounding papers like “Memorandum of Understanding” and “Letter of Intent”  are bandied about. But are these documents worth the paper they are printed on? What are the consequences if one party breaches the “Memorandum of Understanding” and “Letter of Intent”?

In many cases, the answer is not much. While a breach of a contract typically results in a lawsuit and the awarding of damages to the innocent party, a breach of a MOU or LOI usually does not. This is because the documents are not legally binding. They are like letters of intent, non-binding agreements to negotiate in good faith.

What Exactly Is A “Memorandum of Understanding”?

  • An MOU is typically used early in negotiations for an intended business transaction between parties. At this point, parties usually have yet to agree on all the essential terms of their transaction but still wish to set out its broad framework.
  • An MOU is a document that outlines the understanding between two or more parties.
  • MOUs are often non-binding because they are preliminary agreements subject to a written contract. This incompleteness usually indicates the parties’ intention  to create legally binding relations only once a formal contract or agreement is enforced.

The common uses of MOUs are:

  • to set out the general intent of the parties to prevent any misunderstandings;
  • to set out the critical points of a complex transaction to help to ensure that all parties are on the same page concerning what is expected of them;
  • to provide safeguards in case the business deal collapses during negotiations;
  • to provide tangible proof of the business deal to potential investors.

What Must A “MOU” contain?

There is no hard and fast rule regarding what should be addressed in an MOU.

As a general rule of thumb, an MOU should include the following information:

  • the general intention of the parties;
  • an overview of the business transaction;
  • the critical points of a complex transaction (e.g. price, quality and deadlines);
  • safeguards in case negotiations fail (e.g. confidentiality, non-disclosure and good faith).

Even though a MOU is not legally binding, it is still an essential document since the MOU records the understanding between the parties of the transaction and their intention.

The purpose of a MOU is to foster collaboration, respect, and understanding among all parties involved in a transaction so that all parties can derive mutual benefit from the transaction.

If you’re need help drafting an MOU,  contact us via Lawyer Anywhere. We can help ensure that your MOU is as legally binding as possible.

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Tips For Business Owners : How To Avoid Minefields

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tips for business owners

Navigate Your Business Smoothly: 10 Tips to Avoid Minefields

Running a business is often exciting.  But without the right advice, it can also be a minefield, especially concerning legal matters.  Prevention is always better than cure. 

The following top 10 tips aim to guide you through the minefield:

1. Don’t Put Your Assets At Risk

Are you running your business with your partners?  

If so, are you aware that under Singapore law, all partners are jointly liable for the debts and obligations of the business?  

If your business encounters any problem, not only will your investment in the company be at risk, but all but your assets will also be at risk.  Depending on your business structure, it can help avoid liability – private limited company, limited partnerships, etc.

 

2. Put It In Writing

All your business agreements must be in writing.  

It is often difficult, if not impossible, to enforce an oral agreement.  You may have no recourse for compensation or legal action if problems arise.  So make sure all your contracts are written to give you flexibility and protection.

3. Get Proper Legal Advice Early

Different lawyers specialise in different areas of the law. 

You must find the correct lawyer to help you. Every growing business needs a business lawyer since they are experienced in representing start-ups and emerging companies. The amount you pay for an early advice is usually substantially lower in the long run since it saves you time, aggravation and money.

 

4. Spell Out Your Terms and Conditions

Cash flow is the lifeblood of any business.  

Make sure to spell out your terms and conditions (e.g. terms of trading) to all your customers. This way, you will not be at risk of being paid as and when the customers feel like it.

 

5. Keep Up to Date With The Law

The scope of business law is extensive; as such, no business owner can be expected to be well versed in every aspect of business law.  However, it would be best if you had an essential awareness to help keep yourself out of trouble.  A basic understanding of the following topics is vital:

  • basic contract rules
  • major employer-employee laws (e.g. CPF contributions)
  • regulations of your industry

 

6. Keep Employment Contracts Clear And Simple

It is essential to set out your expectations and rules for your employees.  

No employer/employee is expected to be an expert in employment law.  

Ensuring your employment contract is easy to understand would be helpful.

7. Protect Your Intellectual Property

Do you have a secret formula for your product?  

Do you think your competitors would love to get their hands on your secret formulae?  

If so, you must take steps to ensure that your “secrets” are protected.  Such protection includes trademark registration, confidentiality agreement and non-competition agreements.

 

8. Keeping Proper Corporate Records

Small businesses are notorious for failing to keep records.  Failing to maintain proper or improper records can create ACRA and IRAS problems.  This may also result in personal liability or even hinder your ability to raise funds.

 

9. List Down Your Rights & Responsibilities

If you run your business with your partners, have you consider what would happen if any partners left the company by choice or otherwise?  

Partners or shareholders often fail to sit down and list their rights and responsibilities. 

When a problem arises, this often results in costly litigation fees, which drain parties financially and mentally. 

Such problems can be avoided by having an agreement which deals with the following issues:

  • how much capital must each person contribute?
  • what happens if the business needs more money?
  • what happens if one person leaves the business?
  • what happens if one person dies?

10. Getting Involved In Litigation

Litigation fees can be astronomical.  You should always seek your lawyer’s advice for options such as mediation or arbitration to resolve the matter.  

If, on the other hand, a suit is brought against you, call your lawyer immediately.  Do not attempt to respond without your lawyer’s advice, especially since the first response usually sets the tone of the proceedings.

Having difficulties putting these tips into action? Skip the hassle of waiting to make an appointment with a lawyer.  We offer video consultations via Lawyer Anywhere so that you can get the help you need. Contact us today to get started.

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Myth Of The Perfect 2-Page Agreement

2-page agreement
2-page agreement

Unveiling the Truth about 2-Page Agreements

Many believe shorter is always better for contracts and that a 2-page agreement exemplifies simplicity and effectiveness.

The length of an agreement should not be the sole measure of its quality.

It is easy to see why a 2-page agreement would be appealing.

But the truth is, not all agreements can be effectively covered in just 2-page. While brevity may be seen as a virtue in some cases, it should not come at the expense of clarity and comprehensiveness.

Some agreements, such as those involving complex business transactions or legal matters, require a more detailed and comprehensive approach.

Attempting to condense all the necessary information into a 2-page document can lead to ambiguity, loopholes, and potential disputes further down the road.

It’s important to remember that the length of an agreement should be determined by its content and complexity rather than arbitrary page limits.

In some cases, a more extended agreement may be necessary to cover all the essential terms and protect the interests of all parties involved. Instead of fixating on a two-page agreement, it is more important to focus on crafting a well-written, clear, and comprehensive document that accurately reflects the intentions and expectations of all parties. This requires careful consideration, collaboration, and sometimes the expertise of legal professionals.

Having been in the corporate practice for more than 20 years and having drafted and reviewed countless contracts, we know that many of Singapore’s Small and medium Enterprises have turned to the internet for self-help measures to deal with the nitty-gritty day-to-day aspects of starting, running, and protecting their business as a cost-saving measure.

Like many business owners, you have probably used or are using an agreement downloaded from the internet.

Or you were a little more diligent and had searched for a few similar legal agreements and combined them into one agreement.

Many business owners come to us, flaunting their “simple 2-page but near-perfect” agreements and requesting minor “touch-ups”. We often had to tell these clients that their agreements required a significant overhaul as they did not provide for many common situations.

To truly understand the importance of a properly drafted agreement, it is essential to explore real-life case studies and their valuable lessons.

One of our clients, a training consultant, recently came to us with his “perfect” 2-page agreement. He said he had been using his consultant agreement for the last 6 years without problems.

He recently learned that the company he had worked with made copies of his work and circulated them to all its staff members. A quick review of his consultant agreement showed that it lacked terms relating to using his materials, particularly the right to compensation for the unlawful use of his materials.

Our client told us that, being a “one-man show,” he didn’t want to “scare off” his clients with a 20-page legal agreement.

Our client has now learned that he omitted important details and clauses by condensing his agreement into just 2-pages.

Having learnt a valuable lesson, our client’s standard agreement is now 8 pages long.

Companies in different industries have different specific needs. Very often, the various issues faced by businesses require a variety of specific legal wordings. If you feel that these issues are important to you, make sure your agreements are reviewed by a lawyer. Speak to us today.

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When Partnerships Go Wrong

partnership
when partnerships go wrong

Navigating the Partnership Maze : Learn from Mistakes, Build Success

Businesses often consider partnerships the most significant aspect of their success because they allow for collaboration, the sharing of resources, and the pooling of experience.

Partnership success and flourishing often lead to remarkable growth and success tales.

On the other hand, partnerships can fail, frustrate, and disappoint in some cases. Misaligned objectives, conflicting cultures, inadequate communication, and unclear duties are the many potential causes of such tumultuous seas.

Despite this, keep in mind that even in the face of adversity, the potential and promise of partnerships remain intact. Although problems may arise, they provide opportunities for introspection, education, and correction.

By comprehensively analysing the elements that led to the dissolution of the partnership, enterprises can pinpoint areas requiring enhancement and formulate strategies to manage challenging circumstances more adeptly.

We will examine a real-life example of a failed collaboration to determine what went wrong and what we can learn from it.

John and Peter were 2 entrepreneurs with complementary skills and a shared vision who came together to create a startup.

At first, everything seemed perfect. They had a solid business plan, a promising product, and a strong network of contacts. The business flourished, and started gaining traction in the market.

But over time, their once-harmon harmonic connection started to crack. 

The once-harmonious relationship began to suffer from disagreements over strategic decisions, different work ethics, and communication breakdowns began to plague the partnership. They started to view things from various angles and struggled to find common ground. These problems finally caused mistrust and a collapse in cooperation. The conflict grew more intense, and decision-making became contentious.

They had put their hard work into building a firm. Still, now their once-promising collaboration was on unstable ground, threatening its future.

 

We will take a closer look at the challenges and reasons behind the downfall of the partnership between John and Peter.

  • Lack of clear communication and shared vision presented one major obstacle in this cooperation.
    • The partners had different ideas and goals for the business, which resulted in frequent misunderstandings and conflicting decisions. This lack of harmony created tension and hindered progress, ultimately leading to a breakdown in trust and collaboration.
  • The unequal distribution of resources and labour presented still another major obstacle.
    • One partner felt they were unfairly burdened with the financial load and work, which bred bitterness, creating resentment and a sense of unfairness. This imbalance strained the relationship between the partners and affected the business’s overall success.
  • The partners should have developed a strong foundation of trust and transparency in their relationship-building.
    • These behaviours undermined confidence and eroded trust. It made it more challenging for the partners to work together effectively, ultimately leading to a breakdown in the partnership.
  • The failure of this partnership was further complicated by the fact that neither party possessed the necessary abilities to resolve conflicts.
    • Disagreements were ignored or handled poorly by the partners rather than being confronted head-on and finding solutions that would benefit all parties. This resulted in problems that still needed to be resolved, which continued to plague and hurt the cooperation between the parties.

Overall, the challenges and reasons behind the downfall of this partnership can be attributed to a lack of clear communication, shared vision, unequal contribution, trust issues, and a failure to resolve conflicts effectively.

Understanding and identifying these elements will help us to learn valuable about the importance of honest and open communication, coordinated goals, fair participation, trust-building, and efficient conflict resolution in preserving successful partnerships.

Contrary to popular perception, a lawyer is more valuable to you BEFORE a lawsuit arises. Speak to us today.

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