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kattorney, Attorney
Category: Business Law
Satisfied Customers: 1142
Experience:  16 years experience with a concentration in business, corporate and contracts law
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We design electronic products for manufacturers. Recently we

Customer Question

We design electronic products for manufacturers. Recently we we were approached by a company to design a product. We gave them a project quote broken up into different phases and were engaged by them for the first phase.

Upon getting to know them better I learned that the principals in the company are major league lawyers. This spooked me to no end. In our line of business, as in the construction business, things rarely go according to plan - there are always changes, adjustments and bug fixes till the final product is done. No matter how good the design and how thorough the testing, many times issues arise once the product is in the field.

Most of our clients are established manufacturers and know how things work and we have very good relationships with them.

I am afraid of getting sued by the lawyer clients at the first sign of trouble. The project has just started.

What should the ideal course of action be? I was thinking of stopping work after first phase unless they agree to a no sue/arbitration clause.

We are in Maryland, while the client is in Chicago, Illinois.

Of course all this points to a need for me to do a thorough background check on new clients before taking them on/
Submitted: 2 years ago.
Category: Business Law
Expert:  kattorney replied 2 years ago.

Kathie Russell :

I understand your concern, and it is valid. However, just as lawyers can be nightmare customers, good lawyers can also be good customers. The key to protecting yourself is to make sure you documented everything properly. A good, watertight contract is KEY. Do you have one with them, and if so was it reviewed by your attorney before you signed?

Kathie Russell :

I would suggest that you test the waters during the first phase of the project. If you are ok working with them, and they seem honorable, at the conclusion of the first phase then get a good agreement in place before moving to phase two.

Kathie Russell :

You can use the time during phase one to have this drafted and reviewed by your attorneys, or if you don't have attorneys, by a good local business law attorney. When it's time to begin phase two, just tell them you always get an agreement signed before proceeding further.

Kathie Russell :

I would not suggest asking for a no sue clause because that will just make them wary and probably lead to problems, and they will never agree to it. You could include an arbitration clause in the agreement, and make Maryland the jurisdiction. That will help you save costs in the event of any problem, but be aware (and discuss with your attorney) that arbitration clauses are not always enforced by courts. Certainly, you would make MD the jurisdiction for the entire agreement.

Kathie Russell :

If you get a good contract that spells out the details of the project - deadlines, delays, timelines, goals, payment points, etc. and also is very specific in the way that changes, adjustments, bug fixes and revising or tweaking the product after it is in the field work with your company and this project - you could have a very good customer. The key is to make sure to cover all the details and deal with all possible contingencies. That may sound like an oxymoron, but a clause to the effect of: "due to the nature of the design process, the product is likely to go through several "test" phases both during the design process and after the initial release....." and then spell out exactly how this is handled within your company.

Kathie Russell :

We lawyers like details and if you have a good contract that lets them know exactly what may happen, and what they can expect in terms of you company's handling of any such issues, so that whatever arises they can simply refer to the agreement and ascertain what comes next.....the relationship could end up going very smoothly. These customers will appreciate the certainty that a well drafted agreement brings, and my guess is that they will respect it.

Kathie Russell :

Of course, if you get such an agreement in place and they balk at signing it, then you can expect problems down the road and you'll know you don't want to go any further with this group. But my advice is to try it, as long as you get a good signed agreement - you might be pleasantly surprised.

Customer:

Thank you. That is a very

Customer:

Thank you. The reply was very helpful. Would you be able to help us draft such agreements.

Kathie Russell :

You are very welcome.

Kathie Russell :

I'm not allowed to draft documents for customers of this site. We can provide forms, however, in this instance, you need a very carefully and specifically crafted agreement, and I'd recommend using a local attorney

Kathie Russell :

This link is for the Maryland Bar attorney referral service

Customer:

Thanks.

Kathie Russell :

It has been my pleasure

Kathie Russell :

I hope you have a good experience with these attorneys so they don't give us all a bad name :)

Customer:

Is there a way to find which of the attorneys is a good one in the referral list?

Customer:

I hope I have a good experience too. :)

Kathie Russell :

With the bar referral service, they usually agree to a low cost consulation, so you can interview and decide which one to use. The best way I know to find a good one is to ask others for a referral. If you know someone who has a good attorney that they can personally tell you has done a great job for them, that's the very best way to find a good one.

Customer:

Thank you. We will try it out.

Kathie Russell :

Best of luck. Let me know how it works out.

Customer:

Will do. Wish you were in our area so that I could have retained you. You are very pragmatic. Have a good day and hope you get loads of clients.

kattorney, Attorney
Category: Business Law
Satisfied Customers: 1142
Experience: 16 years experience with a concentration in business, corporate and contracts law
kattorney and 2 other Business Law Specialists are ready to help you
Customer: replied 2 years ago.

Hi Kathie:


I really liked the advice you provided. Would you be able to advise me further (for an extra fee of course :) ?


 


I would prefer it that you answered the question rather than post it on the general forum and have another expert answer.


 


Thanks


Sanjay

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