Business Law

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Category: Business Law

It’s easy to confuse a contract with a memorandum of understanding (MoU). After all, both talk about agreements, and they’re made between two or more parties. In this article, we’ll clarify the difference between the two so you’ll know exactly which one to use for your upcoming deal.

Defining Each Aspect

Let’s start with a brief definition for each.

Memorandums of Understanding

A memorandum of understanding (MoU) is a written document that describes the agreement between two or more parties concerning their contemplated relationship. MoUs are signed by all the parties involved, so it carries the tone of mutual respect while documenting a relationship of goodwill between the parties. It puts into writing each party’s intentions and actions, although most of the time, it doesn’t detail an implementation process. An MoU can be entered into by two parties (bilateral) or more than two parties (multilateral). It can serve as a preliminary document before crafting a formal contract.

Contract

A contract is a written or spoken agreement that two or more parties enter into after the acceptance of an offer. It involves the exchange of something of value as an act of sealing the deal. This “something of value” is known as “consideration.”

When Is Each Used?

A memorandum of understanding is generally used when two or more parties mutually agree on a particular matter and would need to put their agreement in writing to outline a relationship in general terms, but do not want ...
Illinois business and contract law attorney Danya Shakfeh explains what business lawyers actually do. In sum, business lawyers do three things: 1) create a legal protection strategy, 2)a business lawyer should not create an adversarial relationship when it is not called for (and should also manage a situation when there is an adversarial relationship) and 3) do not mirror their clients' emotions. Watch the video for full details.

(Video length: 2 minutes, 5 seconds)

If you have an entrepreneurial spirit, you may have dreamt of being your own boss someday or building a company from the ground up. Starting your own company or going into business with a partner is a major endeavor, not to be taken lightly. In a business partnership, you and your partner can split the profits any way you want, as long as you both agree to the terms of the arrangement. When business partners start a new company, they typically bring different skills and assets to the table. It is not uncommon for one partner or partners to bring in cash and the others to bring managerial experience or industry knowledge. The key issue here is then how to appropriately compensate each partner and where to allocate the liability. The legal aspects of running a business can be intimidating, so that is why you should consult with an experienced business law attorney before embarking on this type of endeavor. In order to avoid any disputes when a company becomes successful, fails, or if there is a third party lawsuit, it is imperative to consult an attorney to properly allocate profits—and liability—to minimize harm later on.

Limited Liability Companies and Profit Sharing

Limited liability companies (LLCs) are an ideal way to share profits and distribute liability between partners (or as known in LLCs: “members”). LLCs are incredibly flexible and can be custom designed for your business’ specific needs. LLCs can be designed in the following ways:

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    For any business owner, it is imperative that all agreements related to the company are put in writing in order to protect his or her rights and interests. However, business contracts are important for outlining the expectations of the parties on all sides, whether a business, vendor, or employee. In simple terms, a contract is a legal document that governs the relationship between two or more parties. These contracts should be carefully reviewed by all involved parties because it is important to take into consideration what other factors impact this type of relationship, including any relevant laws or statutes.

    Types of Business Contracts

    Different types of business contracts define terms of an arrangement, which can be between various parties. Business partners may enter into an agreement that defines their roles and responsibilities and the consequences if one partner leaves the company. The nature of that contract depends on whether the business partners are part of a limited liability corporation, partnership, or corporation. Another type of contract is an employee agreement, which outlines the roles and duties of the employment, salary and overtime pay, hours, paid time off (PTO), medical leave, healthcare benefits, as well as non-compete agreements. Additionally, confidentiality clauses restrict employees from taking trade secrets and going to work for a competitor. Another type of business contract is a vendor agreement, where business owners hire third-party vendors. Vendor agreements typically outline the duties they are performing, prices, intellectual property, confidentiality, non-compete terms,

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    As a business owner or an employee, it is important to understand the contracts you are signing, whether you are a new employee accepting a job or an employer offering a job. Regardless of your level or position at the company, you should not overlook the details of any contract. Business contracts can be complicated with a lot of legal details that may be difficult to comprehend. For example, many people may not know what a non-compete agreement, which is a type of “restrictive covenant,” entails. As an employer, if you wish to enforce a non-compete agreement (also known as a “covenant not to compete”) in regard to an employee, you must draft it carefully according to the standards outlined by Illinois courts. A non-compete clause can be confusing, but you will have an advantage in negotiations if you understand the requirements for enforcing this type of legal document. Whether you are the company owner or the employee, an experienced business attorney can assist you during this process to make sure your rights are protected. The following are some important issues to consider when drafting or signing a non-compete agreement in Illinois.

    What Is a Restrictive Covenant/Non-Compete Agreement?

    A non-compete agreement is a stipulation within a contract that typically prohibits an employee from going to work for another competing company or starting his or her own competitive business for a certain period of time. The main purpose of this restriction is to prevent an employee from leaving

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