The following is not meant to be legal advice.
The attorney working in house comes across letters of intents. Letters of intents are ok if the terms are as if they will be when they are binding.
The attorney working in house might come across distributor agreements. In these agreements, there may be entity concerns if a company has a parent company and subsidiaries. The distributor dealing with a subsidiary may want the parent company to guarantee the obligations of the subsidiary. This is because the distributor may getting a percent allocation on net revenues derived from transactions occurring in the territory. The distributor wants to get paid. The company may need to pay the distributor a minimum payment each quarter. If the company is not obligated to pay the distributor an amount over the minimum payment, it may wait until the end of the year to reconcile royalties. This will preserve capital for investments, but work only when the agreements exceed one year in term.
When negotiating contracts, the attorney might come across automatic renewal language. Generally fixed terms are preferred.
Comment Preview