Breached Terms (1/2)
While more startups are adopting an independent attitude (as far as business and their processes go), one sector remains taboo to creative entrepreneurs and mortals throughout the African continent.
As soon as ‘legal matters’ arise, many of us instinctively scatter towards the nearest attorney or ‘legal assistance’.
We joined members of our community and Kevin Smith, from Gani Mayet Attorneys, in a discussion about the importance of having our own legal knowledge, what it takes to handle our legal issues, when to take legal action and how to do it.
From their beginning, all organizations have a structure that applies special laws to its founders and members (e.g. a partnership). For most startups, their first legal activity involves getting registered and making sure they meet all compliance requirements before operations begin (e.g. getting trade licenses, passing inspections).
At those early stages, startups may work with consultants or add a partner who is well versed in the forms, certificates and “stuff” required to get a business running. Otherwise, we can always find helpful resources through Google and websites like the CIPC.
Once all systems are go, businesses still need to apply legal processes into everything they do. When startups use the law effectively, it can protect their interests and help them achieve their goals.
The following guide shows us how to independently handle our legal business in 3 steps:
Step 1: Clearly state your purpose
Do you need to protect your creative works? Begin a business collaboration? Or are you trying to defend your business in a case?
By knowing what you aim to do and what your business seeks to gain from it, you’ll get an idea of what legal steps are required to achieve it. Instead of getting a lawyer, startups can save a considerable amount of money by first figuring out what task that lawyer would be required for.
Step 2: Prepare the relevant communication
Once the required direction is clear, the next step is creating contact between all parties involved. This is usually done by drafting a legal document, agreement or contract etc. You may want to begin by looking at some examples or templates; which you can find by searching online.
The “paperwork” mentioned above is notorious for its tedious and complicated language. While there are a few possible reasons for this, we should always remember that the key objective of any legal document is to make sense to anyone who reads it. i.e. Every agreement aims to represent its purpose, terms and conditions without misinterpretation.
“If your agreement can speak for itself without you having to be there to explain it, then you’ve got the perfect agreement.” – Kevin Smith
A standard legal document should state:
- The parties involved
- The desired business outcome (e.g. contract of employment, non-disclosure agreement)
- When the agreement starts and ends
- What will be required for this transaction to run smoothly?
- What could stop this transaction from running smoothly?
- How can the hurdles in point 5 be fixed, so the transaction goes smoothly again?
Before any agreement legally comes into effect, each party needs to agree to every term within it. This document can later be referred to for guidance or resolutions, especially when terms are breached or when legal action needs to be taken.
Step 3: Legal Action
Most legal troubles begin when clauses are breached or disputed by any of the parties involved in an agreement. As far as civil agreements go there are 2 types of breaches; ‘breaches of obligation’ refer to breaking the terms of a (previously signed) agreement; while ‘breaches of law’ refer to breaking the actual law.
In either case, it’s advisable to begin by referring to the original agreement, to see what it says about breaches. A solid agreement should state the remedies or steps to be taken in the event of any breach.
It is important to note that breaches don’t automatically terminate an agreement, unless the agreement outwardly says so.
Did you know?
Many court proceedings involve a judge trying to decide what was the intention of each party in an agreement. i.e if Party A accuses Party B of breaching a clause; it’s likely that the proceedings will mostly be about what was intended by the clause, as opposed to who was right or wrong.
Putting the steps into practice
Since the above steps may seem oversimplified, the second part of this article briefly explores how these could work for modern creative entrepreneurs.
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Lungelo Hlela is a Digital Copywriter based in Johannesburg, South Africa. When he’s not writing for brands, most of his work includes themes about social issues, history and popular culture. Follow him @lungelosam for more of his existentialist ramblings and romantic ideals.