CONTRACT EXAMPLES

Example 1

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This contractual provision was the centerpiece of a case my office litigated for the sales company, in which the manufacturer argued that the customer had to actually make payment for the goods by January 31, 2001, before the sales company had earned the sales commissions.  The contract however, didn’t state that.  Instead, it stated that if the manufacturer received the order before January 31, 2001, it was liable to pay the sales commissions.  This company ended up paying $85,000.00 in a sales commission settlement. 

Example 2

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Every contract should have these two provisions. In today’s business world, interstate or even international transactions are commonplace.  The last thing your company needs to know is that California state law applied rather than Maryland state law.  Particularly, if your company does business in many different states, being subjected to other state courts, can be a great financial drain and affect the bottom line.

If your contract doesn’t have a provision expressing it to be the entire and exclusive understanding between the parties, the other party can always contend that some other understanding existed between the parties circumventing an established contractual provision.  That’s one of the major reasons the written contract was devised in the first place.   

Example 3

Notice Before

Notice After

Notice the before and after on this settlement agreement.  My client, an independent contractor Information Technologist (he wasn’t an employee to begin with) performed some work for a major Fortune 500 company.  A dispute arose between the parties which settled for an undisclosed sum of money.   The company manager he reported to insisted that the settlement agreement forbade him from seeking future employment with the company.  This provision was totally unworkable.  It would have been very embarrassing for the client to have to inform every recruiter in the IT field that due to a separation agreement provision, he was prohibited from applying for work at this large conglomerate.  Moreover, after his contract ended, my client already had future contracts in the works with other offices across the country with the same company.  He couldn’t very well tell another company branch in Florida, for example, that he had to cancel his contract with them because of a settlement agreement he had on the east coast. 

When the company agreed to drop that provision, to save face, it added the language that it had no obligation to re employ or transact business with him in the future and that the company could direct its personnel not to rehire him or contract with him in the future.  That provision was agreeable to both parties.   First, the company could enact such provision  without this settlement agreement.  Second, the likelihood that one manager who had a personal conflict with my client could jeopardize future profits for an entire conglomerate was simply not going to happen.  In today’s fluid economy, fewer and fewer employees stay with the same company for their entire careers.  Employees now leave companies, work as independent contractors, start their own companies and may even return to a company they left a number of years ago.  Legal documents in the twenty first century have to be drafted with that modern reality in mind.  

Example 4

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This is a good example of a Non-Compete clause that works well for employers.  Most employees fail to study their separation agreements in great detail.  In this case, however, the employee retained my office to review his contract and negotiate a clause that allowed the employee to leave with a certain amount of business through clients he generated.  Had the employee failed to do that, he would have given up a substantial amount of future business. 

Non-Compete agreements have to be reasonable in geographic scope, length of time and reflect the nature of the business of the employer and employee.  The lawyer drafting these provisions has to possess an appreciation for the employer’s business to determine the reasonable scope the courts will uphold.    

Example 5

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This employment contract is an excellent example of the employer failing to take advantage of Maryland’s “at will” employment doctrine.  Generally speaking, unless stated to the contrary, an employee in Maryland is “at will”, meaning the employer can terminate the employee for any reason except legal protections like discrimination and whistle blowing.

However, this contract basically makes the employee a promise that if he performs in a satisfactory manner for one year, he will receive a ten percent bonus.  In this actual case, the employer argued that the employee was at will.  Without even commencing an action, the employer later issued a settlement check.  What the employer had to do was clarify in the contract that the employee was completely at will and no promise existed to the contrary.