Embracing Failure
January 29, 2008
Regardless of what I think of the travesties that formed the tail-end of the Rocky series, I’m in complete awe of the persistence Stallone showed to get into the movies. I doubt I have that much ticker.
Stallone endured years of rejection and near-destitution before he crashed through to Oscar success. This video gives some great insight into how he held to his ideas despite so many obstacles.
Even Bill Gates tasted gravel when his first business venture, Traf-O-Data, slid out and crashed. Yet, he had the persistence to remount and have a second go with his slightly more successful Microsoft venture.
Such stories mean different things to each of us and rather than rave on about the obvious, I’ll end with the timeless wisdom of Kipling’s “If” poem:
If you can make one heap of all your winnings
And risk it on one turn of pitch-and-toss,
And lose, and start again at your beginnings
And never breathe a word about your loss;
If you can force your heart and nerve and sinew
To serve your turn long after they are gone,
And so hold on when there is nothing in you
Except the will which says to them: ‘Hold on!’
Boilerplate Clauses
January 27, 2008
It is standard practice to include a number of general provisions in any legal document. Given their common use and function they are often referred to as boilerplate clauses.
It is common practice to place these more fundamental legal clauses at the back of the document while ‘interpretation’ boilerplate is usually included at the front.
The boilerplate clauses are more general in nature than other clauses in the body of the contract and they normally relate to legalities of the contract rather than the particular transaction.
Some common boilerplate clauses are:
- This is the entire agreement between the parties in relation to its subject matter and it supersedes all previous written or oral negotiations, promises and understandings.
- No modification of the recorded terms will be binding unless it is in writing and signed by each party.
- If a court considers any provision unlawful, invalid or unenforceable that will not affect the validity and enforceability of the remaining provisions.
- If the document is signed in counterparts, each is deemed an original and together they constitute one instrument.
- Each party must do all things required to implement the provisions of the document and to give effect to the parties’ stated intentions.
- Each party is to pay its own legal costs related to preparing and signing the document.
- Nothing in the document constitutes a partnership among the parties or authorises any party to act as agent or to bind another or contract in another’s name.
- The assignment (changing ownership) of the rights and obligation are restricted unless written consent is given.
- Successors (such a future owners) will be bound by the relevant undertakings and obligations, but they’ll also enjoy the same rights.
- The other party must execute any documents required to give effect to the undertakings in the document.
- The rights, powers and remedies set out in the document are in addition to any existing rights.
- Failure to take action does not mean a party has consent to another party’s actions nor does it prevent a party from taking action later.
- Rights will only be waived if that waiver is in writing.
- A certain jurisdiction’s laws are selected to govern the document.
| Photo by tanakawho |
Deed of Confidentiality
January 17, 2008
As stated in Terminology Made Simple, documents that protect confidentiality are referred to by a number of names, but they are essentially the same document: Deed of Confidentiality, Non-Disclosure Deed or Confidentiality Agreement.
It is prudent to execute the document as a deed rather than an agreement as that avoids any concerns over the possible lack of [consideration] if no money is exchanged.
It is always crucial to consider what you are trying to achieve and who you wish to contract with. Who do you want on the hook for the obligations and who can you best take action against to assert your rights? Choice of the right party (particularly if the other party belongs to a group of companies) is often based on financial, legal and logistic considerations.
Once you’ve paused to consider the purpose of the document and who the parties will be, some other standard provisions are:
Parties: Who will be the Recipient and give the confidentiality undertakings. Is it the main company or a subsidiary that you wish to bind? Or, would it be more appropriate to get individual undertakings from each of the Recipient’s employee who will have access to your confidential information?
“Confidential Information” definition: Includes any information (such as records, financial information, reports, product specifications, technical information and forecasts) that you provide to the Recipient, but it excludes any information already in the public domain or which the Recipient already knew.
“Purpose” definition: The nature and scope of the purpose is defined. The Recipient is restricted from use the information for any other purpose or disclosing it to any other person unless disclosure is required by law.
If it must be disclosed the Recipient must inform you, take all steps to resist or narrow the required disclosure (and assist you in that process too).
Disclosure to representatives: If the Recipient is permitted to disclose the information to any of its representatives, the Recipient must: limit the disclosure to what is strictly necessary; make the representative aware of the confidentiality obligations; have them agree to be bound by these undertakings; and make them aware that any failure to maintain confidentiality would be construed to be a breach of the Recipient’s undertakings.
Unauthorised access, use or disclosure: The Recipient must inform you of any unauthorised access, use or disclosure of Confidential Information and provide you with assistance to prevent that breach by complying with your directions.
Ownership of information: While the recipient is granted access, the information remains your property.
Return or destruction of information: Once the purpose is completed or upon your request, the Recipient must return or destroy the information.
Breach of obligations: Sets out what action you can take if the undertakings are breached.
Continuing obligations: The obligations will continue for a certain term or until the information enters the public domain.
Disclaimer: You disclaim (as much as the law permits) liability for any loss or damage related to the Recipient’s use of the information.
General: There are a number of boilerplate provisions which are a useful addition to most documents.
| Photo by procsilas |
Terminology Made Simple
January 16, 2008
Here are a few tips that may help to demystify legal jargon and enable you to use business terminology more accurately.
Joint Venture / Partnership / Alliance
The terms joint venture and partnership have very serious legal implications. Unless you mean to use them in their true context, avoid the use of these
terms. They will cause confusion in the other camp if they are used indiscriminately. A more general term that is less likely to provoke concern is “alliance”.
A joint venture is a legal arrangement that normally requires significant commitment from the participants. It generally connotes the incorporation of an entity in which the venturers are joint shareholders. Often the new entity is initially supported by shareholder contributions before it launches its own business. The subsequent profits are divided according to the equity held by each party.
Partnership is also a precise legal concept that means two or more persons working together with a view to making profits. The danger of entering into a partnership is that each partner has the power to bind the other partners. If one partner incurs a debt, the creditor can recover it from the borrowing individual or from any other partner.
In short, unless it is completely accurate, avoid the use of the word “partner” or any related terminology. A better term to use is “working together”.
Agreement or Contract
There is often confusion about whether a document is a contract or agreement. It is really the same thing and the terms are interchangeable.
Deed or Agreement
There is a legal difference between a deed and an agreement although there is not a great deal of practical difference, other than the name and the way the document should be executed.
A crucial reason to execute a document as a deed rather than an agreement is if there was concern over the existence of valid consideration. This is a fairly legal issue, so don’t worry too much. The key point is this: Don’t be overly perplexed by a document being a deed and not an agreement.
| Photo by darkpatator |
Surviving the Desert of Doubt
January 10, 2008
I won’t bore you with how many times in my life I’ve failed to realise my potential (or was it that I actually realised its limits?). You’ve probably got the idea I’m hammering.
It hasn’t all been doom and gloom; I’ve achieved in other areas and have enough degrees and professional qualifications to immodestly festoon an otherwise drab office wall.
Why did I achieve in some areas and fail in others? What were the crucial ingredients in either outcome? I could gaze at my navel for hours…
The outcome of my self analysis is that academic success is so much easier. Once you enrol, the spoon feeding begins. Exams and assignment deadlines then force you to deliver.
In stark contrast, trudging alone through the desert of doubt with a head full of ideas is no fun. It takes perseverance and determination. Importantly, it begins with a first step… followed by another.
The old Elephant Eating analogy applies. The only way to eat an elephant is one bite at a time.
My problem is that I often try to swallow large chinks of any project right at the beginning and the resultant digestion eventually kills off my enthusiasm.
| Photo by Hamed Saber |