AI and Contract Analysis

Contracts are critical components of any M&A deal, governing various aspects such as liabilities, obligations, warranties and intellectual property rights. Analyzing these contracts manually can be time-consuming and error-prone. AI-powered contract analysis tools can offer several advantages in this regard: Efficient Review Process AI algorithms can quickly review large volumes of contracts, including purchase agreements, … Read more

Disparagement? Fuhgeddaboudit!

On May 7, 2024, the New Jersey Supreme Court ruled that non-disparagement provisions preventing the discussion of discrimination, retaliation or harassment claims are unenforceable. This decision emerged from Christine Savage’s case against the Township of Neptune Police Department. Savage, who had previously settled a lawsuit under the New Jersey Law Against Discrimination (LAD), later made … Read more

Legal Engagement Letters

An engagement letter is the contract that comprehensively defines and governs the attorney-client relationship. The letter serves the critical function of allowing the lawyer and client to formally memorialize the scope, terms, and mutual understandings regarding all aspects of the legal engagement from the outset. A key component is precisely identifying who the client is … Read more

Effective Non-Disclosure Agreements

Drafting a non-disclosure agreement (NDA) requires careful consideration to ensure its effectiveness and enforceability. By addressing common mistakes and incorporating additional considerations, parties can create a robust agreement that protects confidential information while promoting a fair and transparent business relationship.

Key Issues in SAFEs

There are important issues that need to be carefully considered and discussed with respect to SAFE (Simple Agreement for Future Equity) agreements. (Yes, I know that’s redundant.) Let’s take a look: Valuation Cap This is arguably one of the most critical aspects of a SAFE. The valuation cap essentially sets the maximum valuation at which … Read more

Covenant of Good Faith and Fair Dealing

The covenant of good faith and fair dealing is a fundamental principle that governs contractual relationships. It is an implied duty that requires parties to a contract to act in good faith and deal fairly with each other in performing their obligations under the agreement. This covenant serves as a safeguard against actions that may … Read more

Warranties and Guaranties

When it comes to purchases and financial transactions, you’ve likely heard the terms “warranty” and “guaranty” thrown around. While they both provide a form of protection or assurance, there are distinct differences between the two. What is a Warranty? A warranty is essentially a promise made by a manufacturer or seller about the performance, quality, … Read more

M&A Earnouts

Earnouts serve a valuable role in bridging valuation gaps that frequently arise when buyers and sellers negotiate the pricing for an acquisition. Buyers typically apply conservative projections and valuations to limit overpaying, while sellers push for valuations based on their more optimistic future performance expectations. Earnouts allow a portion of the purchase price to be … Read more

LOIs – Common Mistakes

A letter of intent or LOI is a document that’s often used to outline the preliminary understanding between parties before entering into a formal contract or agreement. Below, I outline the common mistakes in LOIs and how to avoid them. Parties should address these common mistakes and taking proactive steps to draft clear, comprehensive, and … Read more

AI: Automating M&A Document Review

AI can automate various aspects of the due diligence process, such as document review, redlining, and contract summarization. By automating routine tasks, AI frees up M&A professionals to focus on higher-value activities, such as strategic analysis and negotiation. I give more particulars below after the video. By automating routine tasks and leveraging AI-driven analytics, M&A … Read more

The Lighter Side of Contracts

Here are two examples of contractual provisions that just made me chuckle: The first is from an asset purchase agreement. It’s not unusual for contracts to provide that the death of a key person will be a default. But how many allow that particular default to be cured? Buyer shall be in default under the … Read more

Buying a Book of Business

Outside of a dog, a book is man’s best friend. Groucho Marx Your business is doing well. So well, that you’re thinking it’s time to expand. One possibility is to slowly continue to build the business by adding customers or clients one at a time. Another possibility is to quickly add new customers or clients by … Read more

Checklist of Buy/Sell Considerations

No two deals are alike. However, it’s useful to at least think about the following items when shaping and negotiating a deal. 1. Finding the buyer or seller    a. Networking, professional and social    b. Competitors    c. Business brokers    d. Investment bankers2. Useful professionals    a. Lawyer    b. Accountant    c. Investment banker    d. Tax advisor3. Before serious negotiations and discussions begin, consider    a. Entering into a confidentiality … Read more

Is Your Operating Agreement Complete?

You and your partners are successfully running your business. After talking to your accountants and lawyers – I am always hopeful – you decided to operate your business as a limited liability company and entered into an LLC operating agreement. This operating agreement governs your relative rights and obligations. I’m fairly certain that your operating … Read more

Non-Competes: Sword and Shield

Restrictive covenants – agreements not to do certain things – are common in employment agreements. The most common: non-disclosure, non-solicitation, and non-competition. Let’s talk about non-competition agreements or non-competes. Companies often ask employees to sign non-competes. Their basic purpose is to protect the employer when (inevitably?) the employee moves on to other (greener?) pastures, by … Read more