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The BUSKLAW December Newsletter: A "Condition" Does Not a "Promise" Make

It has been called black gold and Texas tea. It can make hillbillies rich enough to move to a Beverly Hills mansion. If you own some acreage, you might have it and not know it. In the early 1900s, speculators (colorfully called "wildcatters") would look for it and if found, they often became today's equivalent of Job and Gates. And Michigan had it in abundance.

We are talking about crude oil. Even with market fluctuations and oil's effect on global warming, you can still make some money having it extracted from your land. Just ask the Allens of Pennsylvania, who had high hopes when the SWEPI company came calling to look for oil on their property. So the Allens signed SWEPI's mineral rights lease that stated in part:

[This Agreement] is made on the condition that within 60 days from the Effective Date of this lease, [SWEPI] shall pay to [Allens] the sum of $2,000 per acre for the first year.

The 60 days came and went and SWEPI didn't pay a dime to the Allens. All…
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The BUSKLAW November Newsletter: I Can't Get No (Accord and) Satisfaction

Little did Mick Jagger know that if only he had added a few words to this rock classic he would have been singing about a classic doctrine in contract law: accord and satisfaction. This doctrine may elicit a "so what," but if you operate a business that invoices and receives payments from customers, you need to know about this doctrine - or face the real potential of economic loss. So bear with me. 

Accord and satisfaction is roughly equivalent to a compromise and settlement. In contract law, according to Professor Garner in his Dictionary of Legal Usage (3rd ed.), "an accord is an agreement to substitute for an existing debt or obligation some alternative form of discharging that debt; a satisfaction is the actual discharge of the debt by substituted means."

Accord and satisfaction issues commonly arise where a debtor tries to pay less than the amount invoiced for goods or services by a notation on the debtor's check that it's tendered in full payment. For e…

Calling All Consultants! You Need a "Form" Consulting Contract! (A BUSKLAW Newsletter Aside)

I'm fortunate to have many contacts on LinkedIn, and many present themselves as "consultants." That term is broad enough to encompass such heavy hitters as Accenture on one hand to a retired respected Meijer vice president on the other.

But all consulting firms - whether large or small or somewhere in between - have one thing in common: they need an effective "form" contract for their clients. The reason? To state, in plain language, the necessary business and legal provisions that govern their relationship. The purpose of these provisions?

First, to state the parties' rights and duties applicable to the consulting services to be provided. 

Second, to avoid a disruption to the parties' relationship down the road by preempting problems before they occur. 

Do you think that consulting agreements must be lengthy and dense? Balderdash! 😏

An acceptable consulting contract, especially for smaller engagements, can be as short as 2-3 pages. I know because I've …

The BUSKLAW October Newsletter: Are "Efforts" Provisions in Contracts Worth the Effort?

OK, class (as in budding students of contracts and astute readers). Launch your word processing or Adobe™ Acrobat Reader software and open one of your longer business contracts. Pull up the text "find" feature and search for the following three contractual phrases:
best efforts commercially reasonable effortsreasonable efforts Do you have any hits? Regardless, have you ever wondered what these phrases mean? Whether you are on the receiving or giving end of these "efforts"provisions, you should know what you're in for! 

The short answer is not a lot. But keep reading

Many contracting-drafting lawyers are enamored by these phrases. If their client is on the giving end of a contractual duty, they use "commercially reasonable efforts" to perform that duty. But if their client is on the receiving end of a contractual duty, they will argue for a supposedly higher performance standard: "best efforts." But in the words of the infamous Captain Hook, h…

The BUSKLAW September Newsletter: Lawyers and Their Goofy Words - and What to Do About It

Growing up, I was told that lawyers were smart cookies. After all, getting a law degree isn't an easy task. You first go to college and find a subject that is best suited to how your brain works so that you can maintain a high GPA. In my case, I quickly discovered that I wasn't a good fit for the "hard sciences." So I took a lot of Political Science and English courses, learned how to write fairly well, suffered through the tedious law school aptitude test on October 20, 1973, graduated with a B.A. degree in 1974 and then went on to law school. There, I endured a legal education infused with the Socratic method (here's an example), suffered occasional migraines (because some of my law professors were truly smart but couldn't teach) and graduated with my law degree on Mother's Day, 1977. Passed the Michigan bar exam and by God, became an honest-to-goodness lawyer in November of 1977!

So having gone through undergraduate studies, law school, and the bar exam…

The BUSKLAW July Newsletter: Horsing Around with Non-Compete Clauses

Non-compete provisions are part and parcel of many employment agreements. But these provisions must be carefully drafted to be enforceable. There are three sure-fire ways to have a court invalidate your non-compete clause without much judicial cogitation:
Failure to provide a reasonable duration for the clause;Failure to restrict the operation of the clause to a reasonable geographic area; andFailure to establish a protectable business interest as the subject of the clause.The first point is easy to grasp. In Michigan, you are on solid legal ground if the duration of your non-compete clause doesn't exceed one year. And you are probably okay if you add a year to that. But you're walking on quicksand if your non-compete provision lasts longer than two years. 
The second point is a bit more complicated. Courts don't like to enforce a non-compete clause if its geographical scope is too wide. For example, if I'm in the packaged ice business and sell my product mostly to retai…

A BUSKLAW Newsletter Aside: Is Your Website Compliant with the European Union's GDPR?

Effective 25 May 2018, the EU's General Data Protection Regulation goes into effect. The GDPR is a big deal and quite complicated. There are 99 articles and 173 recitals defining the privacy rights of individuals and data controllers’ and data processors’ obligations. 

Are you a U.S.-baseddata controller or data processor subject to the GDPR? You are a “data controller” if you, alone or jointly with others, determine the purpose and means of “processing” personal data of EU individual customers or businesses. The threshold is that you offer goods or services to customers or businesses in the EU (including the UK, despite Brexit) and collect their personal data. But even if you don’t sell goods or services to EU customers but engage in marketing or monitoring activities involving EU individuals’ personal data, you are covered by the GDPR.

You are a data processorif you “process” personal data on behalf of a “data controller,” i.e., a data controller contracts with you to process pers…