Contract Drafting

LAW JOURNAL ARTICLE ABOUT CONTRACTING AROUND LLC STATUTE DEFAULT RULES

A key task in drafting any LLC operating agreement is to draft provisions in it that validly override default provisions in the governing LLC act that are contrary to your clients’ best interests.  Below are the citation and first paragraph of a law journal article about this process. 42 J. Corp. L. 503 Journal of […]

NON-COMPETES

Many operating agreements for multi-member LLCs contain, or at least they should contain, non-competition provisions applicable to managers, members or both. The post under the link below identifies and addresses several recent legal developments that can make these provisions more difficult to enforce. Here’s the link: http://www.corpcounsel.com/id=1202779699925/Drafting-Noncompetes-in-a-Tough-Enforcement-Climate?kw=Drafting%20Noncompetes%20in%20a%20Tough%20Enforcement%20Climate&et=editorial&bu=Corporate%20Counsel&cn=20170223&src=EMC-Email&pt=Daily%20Alert&slreturn=20170123072353

AGREEMENTS TO AGREE

It sometimes happens in an LLC formation process that the parties have agreed to enter into a comprehensive operating agreement but for some reason are not yet read able or willing to draft the agreement. The law journal article cited below discusses this situation in general (i.e., not LLC-specific) terms, but it is readily applicable […]

CONTRACT PROSE

Under the link below is one of the best short pieces on writing legal prose that I’ve ever encountered. I’d only add the following: Every contract that contains four or more pages of provisions should begin with a title page and a one-level table of contents, and every contract that contains ten or more pages […]

PRACTICE TIP CONCERNING THE USE OF “EXCEPT AS OTHERWISE PROVIDED IN THIS AGREEMENT”

I’m often asked by clients to review operating agreements drafted by other lawyers for LLCs that my clients may want to join.  A phrase I often see in one or more of the provisions of many of these agreements is the phrase “except as otherwise provided in this Agreement.” I beg you to never use […]

DRAFTING INSPECTION PROVISIONS FOR DELAWARE LLCS WHOSE MEMBERS AREN’T DELAWARE CITIZENS AND WHO OPERATE THE LLC’S BUSINESS OUTSIDE OF DELAWARE

The post under the link below discusses a North Carolina case addressing the issue of whether the Delaware Limited Liability Company Act can prevent North Carolina residents from obtaining a North Carolina court order permitting them to inspect the books and records of a Delaware LLC.  Believe it or not, the North Carolina court says […]

BE CAREFUL WHAT YOU EMAIL!

Here is the first sentence of the new post under the link below: “In Gomes v. Karnell, No. 11814-VCMR (Del. Ch. Nov. 30, 2016), the Delaware Court of Chancery granted the defendants’ motion to compel arbitration and held that an email exchange between the parties’ attorneys formed a valid arbitration agreement.” The lesson of the […]

ARTICLE ABOUT KEY CONTRACT TERMS IN THE INTER-OWNER AGREEMENTS OF PRIVATELY HELD COMPANIES

The article cited below provides an excellent discussion of buy-sell provisions, tag-along and drag-along provisions and many other key provisions in the inter-owner agreements of privately held companies, including LLCs. 53 Am. Bus. L.J. 677 American Business Law Journal Winter 2016 PRIVATE ORDERING OF EXIT IN LIMITED LIABILITY COMPANIES: THEORY AND EVIDENCE FROM BUSINESS ORGANIZATION […]

NON-COMPETES AND TRADE SECRETS

Under the link below is a good new post on non-competes and trade secrets—the basics of which every LLC lawyer should know well.  And the post is in the form of a Christmas poem! Here’s the link:  http://www.lexology.com/library/detail.aspx?g=74ed3e8b-58a6-4bb8-968b-a125012843c0&l=7T95Y3R Merry Christmas!

CONTRACT THEORY

Although LLCs are statutory entities, they are profoundly contractual.  The Nobel Prize in Economics was won this year by two contractual theorists.  For a summary of their thoughts, click here: https://app.box.com/s/fw17k5uuvs580i9vvdj12h8ugpj43x1p