Contract Law

Contract Law includes the following types of cases and many more: Real Estate, Contractor Agreements, Auto Purchases, Bio-tech & Pharmaceutical Agreements for each phase of development, Non-Compete, Non-Solicitation and Confidentiality Agreements.

Real Estate Contracts - A real estate purchase agreement or contract of sale contains many terms and conditions of sale. Real estate contract law forms obligations that the law will enforce. If the seller or buyer fails to comply with the terms or conditions, such as the seller failing to provide clear title to the property, that party is said to have breached or defaulted on the agreement, and the other party may have a legal claim against the breaching party. The law provides remedies if there is a breach of real estate contract, methods to cancelling a real estate contract, and recognizes the performance of an obligation noted in a contract as a duty. Contracts arise when a duty does or may come into existence, because of an obligation made by one of the parties. To be legally binding as a contract, an obligation must be exchanged for adequate consideration. Adequate consideration is a benefit or detriment which a party receives which reasonably and fairly induces them to make the obligation/contract. For example, obligations that are purely gifts are not considered enforceable because the personal satisfaction the grantor of the obligation may receive from the act of giving is normally not considered adequate consideration.

Contracts are mainly governed by state statutory law.

Private law principally includes the terms of the agreement between the parties who are exchanging obligations.

Statutory law may require some contracts be put in writing and executed with particular formalities. Otherwise, the parties may enter into a binding agreement without signing a formal written document.

Most of the principles of the common law of contracts are outlined in the Restatement Second of The Law of Contracts published by the American Law Institute.

The Uniform Commercial Code, whose original Articles have been adopted in nearly every state, represents a body of statutory law that governs important categories of contracts.

Contractor Agreements - A contract is an agreement between two or more parties that creates an obligation to do or not do something. A breach of contract is the existence of an agreement or bargained-for exchange where one of the parties fails, without a legally valid excuse, to live up to his or her responsibilities under the contract.

A breach of contract usually occurs by one or more of the parties in one of the following ways:

Failing to perform as promised.

Making it impossible for the other party to perform.

Making it known there is an intention not to perform.

A contract may be breached in whole or in part.

Statute of Frauds: It is always best, although not always required, to have a contract in writing. Nearly all states have a law called the Statute of Frauds that lists the types of contracts that must be in writing to be enforceable. The purpose of these laws is to prevent fraudulent claims from arising.

Auto Purchase Agreements - A purchaser or lessee of a motor vehicle has various rights under both state and federal law if the vehicle does not perform as provided under an express warranty. Warranty law can be complex, and it is impossible to describe comprehensively all of the law in a brief space. The following comments briefly explain the Song-Beverly Consumer Warranty Act and what is popularly known as the "Lemon Law." The Song-Beverly Consumer Warranty Act (beginning with Civil Code section 1790) provides protection for consumers who lease or buy new motor vehicles. The law requires that if the manufacturer or its representative in this state, such as an authorized dealer, is unable to service or repair a new motor vehicle to meet the terms of an express written warranty after a reasonable number of repair attempts, the manufacturer is required promptly to replace the vehicle or return the purchase price to the lessee or buyer. The purchase price that must be returned includes the price paid for manufacturer-installed items and transportation but does not include the price paid for nonmanufacturer items installed by the dealer. The lessee or buyer is completely free to choose whether to accept a replacement or a refund. Whatever the choice, the manufacturer is also responsible to pay for sales or use tax; license, registration, and other official fees; and incidental damages that the lessee or buyer may have incurred such as finance charges, repair, towing, and rental car costs. Song-Beverly does not apply if the problem was caused by abuse after the vehicle was delivered. Be sure you follow the terms of the warranty for maintenance and proper use of the vehicle. Although there is a four-year statute of limitations to bring a lawsuit for breach of warranty or for violations of Song-Beverly, you should act promptly to try to resolve the problem fairly and quickly without legal action if possible. Back to Top

Biotechnology and Pharmaceutical Licensing - The major objectives of pharmaceutical and biotechnology businesses are to be the first on the market with new therapeutic entities, achieve maximum market penetration, have freedom to operate, and create barriers to competition. The success of biotechnology companies today depends on their ability to transfer biotechnology and intellectual property rights for value, and establish strong partnering relationships. Licensing, with its flexibility and inclusion of provisions pertaining to improvements and patents, is uniquely suited to facilitate biotechnology transfers.

Licensing biotechnology innovations is by necessity complex. Parties with differing expertise need to deal with one another on multiple, complex levels simultaneously and for mutual benefit. The biotechnology market is segmented into those who create tools and technologies and those who develop and commercialize products using those tools and technologies.

RON KIM LAW has successfully represented clients as licensors and licensees.

Confidentiality, Non-Solicitation and Non-Compete Agreements. Under a confidentiality agreement, an employee agrees not to use or disclose confidential or proprietor information without the employer's authorization. Confidentiality agreements offers several advantages. They are valid in all fifty states. Few employees object to signing confidentiality agreements. There is no requirement that any limitation be placed upon how long a confidentiality agreement may last, or over what geographic range it is enforceable. Employees may be legally bound to a confidentiality agreement not only after their employment terminates but forever into the future, and anywhere they may go.

This means that the confidentiality agreement is, often, merely the first step in protecting an employer’s proprietary information. For example, where an employer desires to keep an employee from using confidential information about its customers to later solicit those customers on behalf of a new employer, the employer should seek an agreement expressly prohibiting such solicitation, in addition to confidentiality agreement. This is known as a non-solicitation agreement.

Non-Solicitation Agreements. A non-solicitation agreement is a contract in which the employee expressly agrees that he/she will not solicit the customers and/or employees of his/her present employer on behalf of any future employer. Non-solicitation agreements have the advantage of directly controlling the prohibited conduct and not merely the use or disclosure of information. If an employee leaves his/her employer, joins a competitor, then solicits the former employer's customers on behalf of the competitor, the contract is violated, regardless of whether any confidential information was used or disclosed. Similarly, if an employee has agreed not to solicit his/her fellow employees on behalf of another, then the employee joins a competitor and talks other employees into also defecting to the competitor, an agreement not to solicit employees has been violated. Non-solicitation agreements leave little doubt about the conduct forbidden by the agreement.

Non-Compete Agreements. Non-compete agreements ("non-competes") are the most thorough tool for protecting an employer from future competitive injury at the hands of its employees. A non-compete forbids the employee to work for, or in any way assist, any competitor of the employer. Such a broad prohibition solves a multitude of practical problems. Among the most important practical advantages of a non-compete agreement, however, is its ability to help the employer prevent competitive harm before it occurs. Money damages are usually inadequate to remedy the wrongful conduct of an employee who uses confidential information, and/or personal contacts, gained from a former employer to compete against that employer. For this reason, courts are often willing to order ("enjoin") employees not to engage in activities prohibited by agreements with their former employers. With a non-compete agreement, however, the employer can seek an injunction as soon as the employee goes to work for the competitor. This creates the best opportunity to stop an employee from disclosing confidential information or using advantages, gained from his/her former employer, to compete against his/her former employer. In most states, courts primarily examine the reasonableness of non-competes in terms of the duration of time that the employee will be forbidden to compete with his/her former employer, and the geographic territory over which the employee will be forbidden to work for a competitor. The reasonableness of the non-compete is viewed in light of the employer’s business interest that the non-compete is designed to protect. The limits upon enforceability of covenants not to compete are also applied to non-solicitation agreements. Non-solicitation agreements also must be reasonable in duration and geographic scope. Because the application of a non-solicitation agreement is limited to customers (and sometimes identified prospective customers), however, some courts permit such a "customer restriction" to be substituted for a geographic restriction. In the end, State law will dictate enforceability.

RON KIM LAW with many years of experience with contract law both in State and Federal Courts invites you to discuss your contract issues with his office. Back to Top