Businesses work best with agreements in place, but how the law sees contracts is what can really matter. You may have gone into great detail on every inch of fine print, but it’s not worth much if your deal doesn’t hold up.
Businesses work best with agreements in place, but how the law sees contracts is what can really matter. You may have gone into great detail on every inch of fine print, but it’s not worth much if your deal doesn’t hold up.
The California Supreme Court recently heard a dispute between two businesses that could shape the influence companies can have over each other. That case makes it clear that California does not always – enforce the non-compete agreements between employers and employees in a contract. For that reason, it is crucial to understand how the court will – view – your contractual business-to-business relationships.
Counteroffers
The court recently weighed in on a pact between two companies that ended a deal with a third. Biogen, Inc. and Forward Pharma settled a patent dispute at the expense of the latter’s relationship with Ixchel Pharma, LLC.
Forward and Ixchel were working together to create a treatment for a neurological disease. At the same time, Forward was discussing licensing its intellectual property to Biogen. The talks eventually reached an agreement to the tune of $1.25 billion. But the price tag – was not the only thing on the table – the settlement also ended any current or future contracts with Ixchel, who operates in the same field as Biogen.
Bad medicine
When your business depends on the follow-through- it is essential that you make sure the contract follows suit. The stipulations here outlined an at-will alliance between Froward and Ixchel. Without – its partner, Ixchel didn’t have the means to continue. – Ixchel brought suit against Biogen under the Business and – Professions Code of California that states contracts that hamper business may be invalid.
The court dismissed Ixchel’s complaints. It found – that while a contract restricting an employee may not – be enforceable, business dealings might -qualify only if the restrictions are unreasonable.
Protecting your interests may require an attorney to advise you – each step of the way. An attorney who specializes in contracts can make sure that the terms of the contract are enforceable to protect those interests. An experienced attorney can discuss with you the terms of the contract and what is important to you to be included in the contract. Also, that attorney can ensure that all of the requirements necessary to render the contract enforceable are included in the contract and if challenged can stand up to the court’s scrutiny.
