In the interest of building and protecting a solid venture, all business owners should understand and apply key business concepts—including legal business terms.
Do you need to go to business school or law school to pursue success as a businessperson?
Not necessarily. But building your knowledge in any way possible along the way can:
- Pave the way for higher profits
- Save your business from legal trouble
- Protect your personal and professional assets
If you’re new to the world of business, get familiar with these terms. A business lawyer can help you understand how these concepts apply to your situation, as well as set the foundations for a successful future.
Intellectual Property (IP)
You probably already know that this is one of the most crucial legal business terms and have heard about it in a general sense—but how does it apply to your business as it stands today?
Intellectual property refers to all intangible assets that are a part of your business, which means everything you and/or the company (this depends on the business’s legal structure) owns.
- Domain names
- Computer code
Intellectual property may apply to social media sharing, photographs, and other digital content.
Protect anything you have developed expressly for your business under copyright or trademark.
A lawyer can help you draft important documents to protect your property and register patents and trademarks with the state.
Breach of Contract
The term “breach of contract” may seem self-explanatory, but it’s the nature of the action that makes it an important legal issue and one that should be determined by a lawyer.
This happens when one party cannot meet the terms of a contract or agreement to an extent where it causes the other party damage.
Contracts must be legal and valid to move forward with a legal case regarding a breach of contract.
For more information, read this article, Common Examples of a Breach of Contract.
Accord and Satisfaction
“Accord and satisfaction” are legal business terms that refer to contracts and claims.
Releases from debts and related negotiations often have it applied to them—for instance, a revision of payback terms for a loan.
The purpose of this type of clause is for the two parties to agree to move forward with terms different from the original contract where the original agreement would no longer be valid.
However, this would only suspend the original contract, not cancel it, and the old contract terms will be reinstated if one party does not meet the new contract terms. In this instance, most prior claims or agreements become suspended or irrelevant.
“Satisfaction” refers to the fact that both parties agree that the new terms are appropriate.
For instance, instead of one party pursuing legal action for a breached agreement, both parties can agree to a compromise called accord and satisfaction.
An implied contract is exactly what it sounds like: a business agreement that is assumed by both parties but not documented in such a way that it is legally binding.
Implied contracts can be legally binding even without any written agreement. For instance, one party completes a service but does not receive any payment for services rendered.
An implied contract could be considered in a one-time, short-term, or long-term agreement and apply to almost any aspect of the business.
This type of contract may be challenging to prove in court; however, a party can prove a violation of the implied contract with sufficient documentation.
Force Majeure Clause
“Force majeure” is an important legal business term that refers to a situation where an event out of the control of individual parties affects the terms of a contract in regards to a given party’s ability to meet terms.
A pandemic, a war, fire, or flood are examples of this, as would any other situation that might be considered an “act of God.” Labor disputes, strikes, terrorism, embargos, and such actions are also considered force majeure if they cause damage and/or impede a party’s ability to fulfill the obligations of a contract.
Force Majeure clauses protect all parties in an agreement from damage caused by these types of unexpected events. Having said that, do not use force majeure clauses to justify poor or illegal behavior.
Why Hire a Business Lawyer?
If you’re already a business owner, you want to put your all into making sure it’s run properly, and this starts with getting a grasp on legal business terms.
But don’t try to do everything yourself, especially when it comes to legal matters. A business lawyer can offer invaluable help in areas like:
- Crisis prevention and management
- Risk assessment and management
- Buying or selling a business
- Contract drafting and negotiations
- Employment law
If a legal issue does arise, don’t try to tackle it alone. Instead, have a competent business lawyer on your side from the getgo… your future self will thank you!
We’ve been helping small, medium, and prominent local and online businesses navigate and avoid legal mistakes for over 20 years.
To find out how we can help, call toll-free 855-976-3783 today or book a consultation online.