Commercial Law – Why It’s So Important for Businesses to Have Legal Backup

The business environment can be tricky, and sometimes just plain nasty. Small businesses find themselves in a legal minefield/maze without warning, when a client, employee or business associate turns difficult. It’s always a good idea to have a working relationship with some commercial lawyers who know the business and understand the issues involved, to have someone on your side when you need backup.

Commercial law is often extremely complex in terms of its application to specific situations. Non-specialist lawyers often can’t help much, because this is a particularly demanding area of law. The sheer range of possible issues needs expert management.

For example, these are some of the areas covered by commercial law:

· Contract law
· Public liability
· Commercial practices
· Consumer law
· Commercial disputes
· Commercial property
· Supply chain issues

There are also possible combinations of these issues, and they’re never simple. There may also be multiple parties involved in a dispute, which further complicates the issues.

This is a typical case in point:

· Business A is a contractor installing kitchens for Business B. The situation is:
· Business A is waiting for kitchens to be supplied by Business C, an importer.
· Business B is complaining about breach of contract, because the kitchens are supposed to be installed by a due date under the terms of the contract.
· Business B further claims that an onsite accident was caused by Business A’s truck, injuring a construction worker.
· Business B is threatening legal action on both counts.

· Business A wants to put pressure on Business C to get the kitchens delivered by being sourced elsewhere.

This isn’t the sort of situation which a business can or should handle for itself. If legal action results, legal representatives need to be hand. They also need to get up to speed ASAP, to manage the situation. So it’s better to have legal representatives on standby at the start, not after the situation has escalated to the point of no return.

In this case, there are quite a lot of legal options:

· Business A can negotiate the contract issues with Business B on the basis that it’s simply unable to obtain the kitchens. In practice, contracts can’t be expected to require the impossible. Business A has been acting in good faith, and the efforts to get Business C to source the kitchens elsewhere is proof of its attempts to deliver on its contract obligations.

· The public liability issue needs to be assessed on its merits. The truck was in fact owned by Business C, delivering a kitchen. Liability may be on Business C, not Business A.

Not simple, is it? At the corporate level, issues like this can involve contracts worth millions of dollars, and corporate lawyers also have to deal with the related corporate law issues, which can be a range of statutory, as well as commercial problems as well.

That’s why small businesses need legal backup. They’re like insurance, something you pay for that you hope you’ll never have to use, but it’s nice to know you have the support when you need it.

Commercial Law – Payment of Commission – Commercial Agency Regulations – Commercial Agent

The case of Heirs of Paul Chevassus-Marche v Groupe Danone and Others (Case C-19/07) [2008], involved a determination on community laws relating to commercial agents. According to Article 7(2) of Council Directive (EEC) 86/653 (On the coordination of the laws of the member states relating to self-employed commercial agents) (“the Directive”):

“A commercial agent shall also be entitled to commission on transactions concluded during the period covered by the agency contract either where he was entrusted with a specific geographical area or group of customers… And where the transaction has been entered into with a customer belonging to that area or group…”.

Article 10 provides as follows:

“(1) The commission shall become due as soon as and to the extent that one of the following circumstances obtains:

(a) the principal has executed the transaction; or the principal should, according to his agreement with the third party, have executed the transaction; or…

(c) the third party has executed the transaction.

(2) The commission shall become due at the latest when the third party has executed his part of the transaction or should have done so if the principal had executed his part of the transaction, as he should have”.

In 1987, the first respondent in this case concluded an exclusive mandate with C. The applicants in this case were heirs to C’s estate. The exclusive mandate concerned the first respondent’s representation of C’s subsidiaries, namely the second and third respondents, in their dealings with the importers, wholesalers and retailers of their goods in a specific geographical area.

Before the termination of that contract, C requested payment of various sums. Such sums included commissions relating to purchases made by two companies established in his geographical area.

The requests for payment were refused on the ground that the purchases concerned had been made from central buying officers or dealers in metropolitan France, an area outside the control of the respondents, and without any action on C’s part.

C then brought an action concerning payment of commission.

The national court made a reference to the Court of Justice of the European Communities. The question concerned a request for a preliminary ruling on the interpretation of Article 7(2) of the Directive. The question referred by the national court was as to whether Article 7(2) of the directive was to be interpreted as meaning that:

“A commercial agent entrusted with a specific geographical area was entitled to commission where a commercial transaction between a third party and a customer belonging to that area had been concluded without any action, either direct or indirect, on the principal’s part”.

It was held as follows:

The court was of the opinion that

· Article 7(2) of the Directive had to be interpreted as meaning that a commercial agent entrusted with a specific geographical area did not have the right to a commission for transactions concluded by customers belonging to that area without any action, direct or indirect, on the part of the principal.

· Article 7(2) merely refers to any transactions concluded during the period covered by the agency contract. There is no requirement that those transactions had to be entered into with a customer belonging to a geographical area or a group of customers for whom the commercial agent was responsible.

· There is not an express requirement for action on the part of the principal, and there is no requirement for action on the part of the commercial agent.

· However, it should be noted that when considering Article 7(2) in conjunction with Article 10, the commercial agent’s right to commission arises either:

§ when the principal has (or should have) carried out his obligation; or

§ when the third party to the agency contract, namely, the customer, has (or should have) carried out his obligation.

· The presence of the principal in the transactions for which the commercial agent could claim commission was indispensable. It therefore followed that the commercial agent could claim commission. The commercial agent’s claim for commission could be made on the basis of a transaction only to the extent that the principal had acted, directly or indirectly, in the conclusion of that transaction.

· As a result, this meant that it was for the national court to establish:

“Whether or not the evidence before it, assessed in the light of the aim of protecting the commercial agent and of the obligation on the principal to act dutifully and in good faith, allowed it to establish the existence of such action, be that action of a legal nature”.

© RT COOPERS, 2008. This Briefing Note does not provide a comprehensive or complete statement of the law relating to the issues discussed nor does it constitute legal advice. It is intended only to highlight general issues. Specialist legal advice should always be sought in relation to particular circumstances.

How to Be a Great Corporate Lawyer

Average lawyers abound, good lawyers are common, but great corporate lawyers are hard to find. What is the mantra that makes a good lawyer GREAT? Great lawyers love what they do and it is this passion towards their work that separates them from mediocrity.

Step 1. Know your subject & law thoroughly. In-depth and sound understanding of the substantive law is a must. Know your subject, its nuances, interpretations and important case laws to have a command on the law that you are practicing. No amount of communication or writing skills can gloss over the lack of knowledge in law which comes from continuous reading & practice. Repetitive reading of law with an open mind brings different connotations and opens the door for creative interpretations. I have personally read same clause differently at different times which new perspective each time.

Step 2. Know the facts crisp & clear. Complete understanding of the facts of the transaction helps correct application of law as law applies differently to different facts. No two matters are similar so grasp the facts correctly to assess an issue. Misreading of a fact may change the entire structure and the end result sought to be achieved. My senior and mentor in law late Mr. J.K. Gupta had the ability to get to the crux of the matter by sheer power of crisp reading and clarity of thought. I continuously strive for that clarity.

Step 3. Understand the objective sought to be achieved. Empathize with the needs of your client, dynamics of the transaction and what is intended to be achieved. Alignment with the objectives of your client coupled with certain analytical & assessment skills helps in gaining long lasting confidence of the client. One possible way of gaining this insight is by having an earnest need to know your client’s business and by feeling the passion he/she feels for the issue.

Step 4. Know your environment. Make a conscious effort to read new developments in the practice area that you are specializing in; understand its dynamics, rules and regulations, latest amendments and changes in law and the transactions closed in the sector. This will help in gaining the confidence of the client and also structuring the transaction better. Client’s expectation from a good corporate lawyer is usually a mix of good legal understanding and sound commercial assessment/advice.

Step 5. Keep the Right Attitude. It is the attitude that separates mediocrity from greatness in any profession. Sincerely loving the work that you do makes all the difference to the advice given. Believing in the work one does and the clients one represents is important to ignite that all so important passion – so therefore do not accept briefs that you not go well with your own belief system. There are times when I refuse briefs/transactions that require me to render advice or undertake work that goes fundamentally against my value system. Reinforcement of one’s commitment towards work and aiming for the satisfaction of the client also helps.

Step 6. Focus on interpersonal relationship and be available when it matters the most. Learn to listen (and not only hear) to the viewpoint of not only your clients but also your opponents, support team, and other associates. Watch closely how they think and what makes them happy – stroke their achievements. Being intuitive and perspective is one of the toughest part of being a great lawyer and being available for most part of the day is the other. However, accessibility brings trust and dependability – so go for it.

Step 7. Have an eye for detail. Pay attention to details and be methodical in going through the check list required to close each transaction. Or else hire someone who can assist you with that work. Shortcuts can lead you and your client to some serious mistakes – ensure that the advice is not only complete but is also duly implemented. For instance, it is not only important to close an investment transaction in an M&A deal but is equally important that the follow up conditions required are duly fulfilled or implemented. One of the common slip that I occasionally note is that endless effort is spent in carefully negotiating the terms of the acquisition & shareholder’s agreement but post acquisition, the investor either fails or forgets to insist on amendment of the articles of association to record the terms & conditions of the shareholders agreement, making most of those rights unenforceable. So keep at it till the last condition is satisfied.

Step 8. Develop objectivity and a holistic approach. Learn to Step back and take a holistic view of the matter and then structure a transaction. Of course the ability to assess the strengths and weakness of a matter does not come overnight but by experience and habit of pondering over at every detail.

Step 9. Know your weaknesses. Get out of your ego trip and identify not only your strengths but also your weakness. Either work on your weakness or hire a support who complements you as a team. It is better to work on your weaknesses than to pretend that you are not. As a corporate lawyer, communication and writing skills are important so work on that area if this needs attention.

Step 10. Grow a team. There is only so much time in a day – therefore learn to identify talent and nurture them as a team. One never wins a battle alone – surround yourself with a capable support team who does all the good work under your capable supervision.

Step 11. Be honest with your clients. Last but not the least, being honest and transparent with your client never hurts either you or your clients. Watch out to understand the difference between creative structuring and adventurous advice bordering potential violation. Advise your client clearly on the merits and pitfalls of what is being proposed and then Step back to let your client take the decision. For instance, in PE investments in public limited companies, the funds usually negotiate for various combination of exit options which are generally unenforceable under India laws vis a vis a public limited company. But most PE funds nevertheless insist on these rights under an investment transaction.

In my experience as a corporate lawyer, the single largest motivating factor that keeps me going is my passion for work, satisfaction of my clients and the sheer joy it gives me. There are no classes that one can attend to become a great lawyer – what ultimately counts is the way we approach our profession and I still have miles to go…

I would be happy to receive your feed back or inputs or additional points that I may have missed in our journey of being a Great Lawyer.

The author is a founding partner of a Delhi based law firm LexCounsel and is a corporate and commercial lawyer.

The Role of Commercial Litigation Lawyers

If you own a business or are involved in any business affairs, conflicts can involve commercial litigation. In most cases, these issues are mostly pertaining to financial, property and contract problems. However, any commercial litigation involves business legal matters that could be taken to court. Nonetheless, when a business or an individual is dealing with any type of commercial litigation issues, he or she is advised to consult with a commercial litigation lawyer. Sometimes, taking legal resources in our own hands could be risky and could cost you or your business a fortune. Hence, it is advisable and practical to consult a lawyer that could help you reach a settlement outside the court of law.

Role of Commercial Litigation Lawyers

Commercial litigation lawyers are responsible for assisting and helping people involved in serious legal matters. In most of the cases, their main aim is to resolve any legal dispute out of the court even before the accused individual or business is presented before the court.

In normal cases, the resolution of dispute that is conducted inside the court takes a lot of time as compared to the out of the court settlement. When two parties are involved, it is often in their interest to engage lawyers to handle their cases and try to fight it out. Hence, these lawyers generally handle cases that do not necessarily involve conflict of interests; instead, they try to resolve the matter in the best possible way. Thus, if both parties are able to meet terms and come to an agreement, an individual saves himself from all the tragic emotions and his business from the grave loss.

Experienced and authentic commercial litigation lawyers are good at dealing with such issues and resolving it with utmost emphasis to both legal aspects of the matter as well as the business.

Areas of Applications where Litigation Lawyers are Involved

There are many businesses that benefit from the incorporation. Every newly incorporated company can enjoy the benefits of several tax breaks and additional advantages. However, to ensure all the procedures are done correctly, it is advisable to hire a litigation attorney to do the job.

Real estate is a very common area of discussion when it comes to commercial litigation. Also, company mergers and land acquisitions are sensitive topics under this subject. Thus, with the help of a knowledgeable and skilled business lawyer issues can be resolved quite easily.

Well, besides the above mentioned applications, these lawyers also have experience in representing their clients in legal sections such as, employment disputes, litigation oversight, construction disputes, breach of contract, general civil litigation, product liability, appeals and appellate review, insurance coverage litigation, business torts including restrictive covenant disputes, unfair competition, business interference, trade secret disputes and many such fields.

What You Need to Know About Bankruptcy Attorneys Before You Hire One

The function of good bankruptcy attorneys is to guide potential bankruptcy applicants through bankruptcy procedures and to act on their behalf in court. With the new amendments, good bankruptcy attorneys will also inform their clients about why certain legal loopholes no longer exist.

It is best to seek services of a bankruptcy lawyer if you are facing any difficulty in declaring bankruptcy and starting over again. Bankruptcy proceedings have to be initiated and proceeded in adherence to all relating legal laws and requirements. A bankruptcy attorney is best qualified to explain the finer details of bankruptcy issues to make concepts and procedures clear and simple. Such attorneys help to relieve you of the pressure and anxiety that arises when filing for bankruptcy proceedings. They help you to successfully complete a discharge of debts under bankruptcy code helping you with advice, support and also assisting you with all related legal formalities and paperwork. An experienced bankruptcy lawyer can relieve you of your debt problems and help you find a feasible debt solution without jeopardizing your home, vehicle, wages, retirement account and other valuable assets.

You may seek services of a bankruptcy attorney if you are facing any of the following problems:

· Tax problems

· Foreclosures

· Auto and truck repossessions

· Creditor harassment

· Lawsuits

· IRS wages garnishment

· Tax levies and seizure

It is common procedure to seek referrals from family and friends when looking to find a reliable attorney. However, this procedure may not be entirely advisable when looking for a bankruptcy attorney unless your friend has gone through a bankruptcy. Instead, ask for suggestions and reference from legal professionals whom you already know. Check if your attorney is certified by the American Bankruptcy Institute and also meets the required additional standards. Make it a point to personally check out your attorney’s law firm’s offices. You may not be comfortable dealing with an attorney having a completely disorganized office. Also, it is essential to look for an attorney with whom you are comfortable discussing your personal and financial problems.

Every state and city has a Bar Association, and the Association of Consumer Bankruptcy Attorneys is another good source. While narrowing down your final choice, ensure that the attorney is certified by the American Bankruptcy Institute, so that a reasonable degree of accountability is established. Finally, find out how many actual bankruptcy cases the attorney has handled in the given year, and how many of them yielded satisfactorily results from the client’s point of view.

Here are few factors to consider while selecting a bankruptcy lawyer:

· Check out and Compare profiles and credentials

· How experienced is the particular bankruptcy attorney

· How many bankruptcy cases the attorney has handled

· What is the nature of bankruptcy cases that he commonly handles, are they personal, consumer, or business filings

· Is the attorney willing to offer personalized services apprising you of the various procedures that are involved

· How comfortable are you with the attorney to discuss your problems

· How much access you have to your attorney during bankruptcy filing

· How much fee does the attorney charge, etc.