Category Archives: Business

Indemnification clauses can be found in various business contracts, from commercial construction corporations to 1099 gig contractors. Though it’s a common clause in many contracts, it’s the source of confusion for many. Understanding the purpose and elements of indemnification clauses is essential, whether you’ve been asked to sign a contract with an indemnification clause or a business owner looking to protect your business with the same clause. Learn more about what indemnification clauses are below.   

What’s an Indemnification Clause?  

Indemnification clauses are designed to protect or “hold harmless” one party from the liabilities and damages caused by another party. Indemnification clauses free you from the responsibility of paying for damages someone may suffer at your business or job site due to actions by a third party. In business contracts, indemnification clauses specify that a third party (not your business) is responsible for compensating someone due to the actions of another party.  

Purpose of an Indemnification Clause 

The primary purpose of an indemnification clause is to make another party responsible for paying for the losses, damages, and out-of-pocket expenses of defending your business in court if someone should sue your company under specific circumstances. When you indemnify someone, you’re taking on the responsibility to pay for the losses and damages on behalf of another party.  

Examples of Indemnification Clauses 

Here are a few examples of how indemnification clauses work in real-life scenarios:  

1. A landlord leases a building to a dance studio. The landlord adds an indemnification clause to the leasing contract, which states that the dance studio is responsible for paying for any damages and court costs if someone sues the dance studio after suffering an injury at the facility.  

2. A wedding venue contracts a DJ. During the festivities, a wedding guest trips on one of the DJ’s power cords and is injured. The wedding guest sues the venue and DJ. Since there was an indemnification clause in the DJ’s contract, the DJ is responsible for reimbursing the wedding venue’s costs of defending themselves in court and the fees for the lawsuit brought against them.  

3. A business owner hires a commercial contractor to outfit a new office building. During construction, a pipe burst and water spilled on the floor. A customer walked by and slipped and fell. The customer sues the business owner. However, since the business owner included an indemnity clause in their contract, the contractor is responsible for reimbursing the business for the customer’s losses and damages.   

Elements of Indemnification Clauses  

Indemnification clauses should be narrow in scope and specific. Vaguely worded clauses are hard to defend in court. Several elements need to be included to craft an effective indemnification clause. First, language such as “defend,” “hold harmless,” or “indemnify” should be included in the clause. The clause should name the indemnifying party (the person responsible for paying damages) and the indemnified party (the person who suffered the harm or loss). The clause should state specific events and instances that would cause this clause to take effect, along with the maximum compensation a company would receive for out-of-pocket expenses and court fees. The clause should also include types of exclusions and a statute of limitations for when claims can be brought against the indemnifying party.  

Drafting Indemnification Clauses in Business Contracts  

In Florida, indemnification clauses for construction contracts must follow the guidelines stated in Florida Statute 725.06. Indemnification clauses are a highly complex aspect of business contracts, so it’s important to have experienced business attorneys like the ones at The Boutty Law Firm help you draft and review the indemnification clause to ensure its legally enforceable. Call our office at (407) 622-1395 or use our online live chat feature to get started.

Contracts are an essential part of any business relationship, whether you are a freelancer, a small business owner, or the CEO of an international corporation. Contracts ensure both parties are on the same page regarding payment terms, conditions, and details about how a service will be provided or a product will be delivered. Breaches of contracts occur when one party fails to adhere to or perform one of the tasks listed in the contract. When this happens, you may need to go to court to recover damages caused by the breach. Below, we discuss how to determine if a breach of contract occurred and what to do about it.

Was a Valid Contract in Place?

There must be a legally binding contract in place for a breach of contract to have occurred. Legally binding contracts must be in writing and have the following elements:

• Offer—A service or product that is exchanged for something of value.
• Consideration—The item of value. It is important to note that not all considerations are monetary.
• Acceptance—An action that shows both parties agree to the terms. Signing a contract or putting down a deposit are forms of acceptance.

Did a Material Breach Occur?

Material breaches occur when one party fails to perform a critical action listed in the contract. You must prove there was a significant violation of your agreement that caused harm to you or your business. You must show you attempted to follow the terms of the contract and that the defendant had everything needed to perform his or her duties. Minute details like a typo in the agreement would not be considered a material breach.

Did the Breach Cause Damage?

The other party’s failure to fulfill the contract must have caused quantifiable monetary damages. Here are the types of damages that a breach of contract may cause:

General Damages

General damages are direct monetary losses caused by the contract breach. They can include the cost of replacing a product that failed to be delivered.

Special Damages

These damages are indirect damages caused by the breach but not directly related to it. They could include profit losses due to delays in getting the product or service. To seek compensation for special damages, you will need to show you took steps to mitigate your damages as much as possible (such as finding a new vendor or doing the task yourself).

Expectation Damages

Expectation damages provide monetary compensation for the value the product or service would have provided to your business. It includes the potential profit your company could have gained if you sold the product as originally stated in the contract.

Rescission

Rescission voids the contract entirely, stating the breach was so substantial that it is no longer legally binding. When this occurs, you do not need to pay for any services. The contract is canceled, and you are entitled to a full refund.

Boutty Law Firm: Central Florida Business Attorney

Contract breaches can cost your business a significant amount of time and money. Let the Boutty Law Firm defend your rights and help your business get back on track. We help business owners in Seminole and Orange counties in all aspects of business and real estate law. Call us at 407-710-0461 or visit our office in Maitland to discuss your case.

A contract is an agreement between people or entities where one party agrees to perform a service or deliver goods for something of value. Contracts help define the terms of partnerships and make sure everyone is on the same page when providing goods and services. However, is every piece of paper signed by two parties legally binding? Whether you are offering freelance services or merging corporations, all contracts need the following elements to be legally binding. 

Offer 

In a contract, there must be a specified action offered in exchange for something of value. The action could be the delivery of a product or the performance of a service. The contract should specify the details of that product or service, including the scope of work, timeframe for delivery, and compensation. A contract must have the capacity to be fulfilled to be legally binding, meaning the person entering the contract must be able to perform the duties specified and be of legal age to do so.  

Consideration 

The offer must be in exchange for something of value, which is called the consideration. The consideration solidifies the transaction between the promise of one party and the payment from another. The consideration is often money for the product or service; however, the only stipulation is that the consideration is something of value to be legally binding. Whatever the consideration is, make sure it is clearly stated in the contract. 

Acceptance 

The third crucial element of a legally binding contract is acceptance. Signing a written contract is one of the most straightforward ways to specify acceptance, but that is not the only way. The other party can also administer acceptance orally or through a video, email, or text. Florida law requires specific contracts to be in written form to be enforceable, such as real estate ventures, when the contract terms cannot be completed in one year. There may be some instances when requiring a single signature at the bottom of a contract is not enough to make it legally binding. In these cases, both parties may need to initial specific clauses.

Mutuality

The last element of a legally binding contract is to ensure both parties mutually understand and agree to its terms. Referred to as a “meeting of the minds,” there must be evidence that both parties understood all aspects of the contract and are entering it willfully. Signing a legally binding contract is one way to show mutuality. Even if a contract is not signed, specific actions such as distributing payment or agreeing to terms in an email may also prove to a court that both parties understand and agree to the offer, consideration, and terms. 

Central Florida business Attorney 

Our experienced commercial lawyers at The Boutty Law Firm can help draft legally binding contracts that protect you and your business from legal issues down the road. If you need to sign a contract and are unsure what it means, do not sign it without speaking with a business attorney. Call our office at 407-622-1395 and schedule a consultation today. 

What happens if a partnership is not working between two parties? A breach of contract occurs when a member of one party does not fulfill the terms of a prior agreement. Breach of contract cases aim to make each party whole, a process called rescission. An experienced business lawyer can help if you suspect a breach of contract has taken place in your business partnership.  

Determining whether a breach of contract occurred 

Before deciding whether you need to seek legal action due to a breach of contract, it is crucial to determine if a violation occurred. Three elements must be in place for there to have been a breach of contract. First, there must be a valid and legally binding contract between both parties. Second, one party must have suffered material damages due to the breach, whether it was time or money. Common types of breaches include: 

● Missed deadlines

● Incomplete or unfinished jobs

● Non-payment for services 

● Failure to deliver a product or service 

● Disagreement over contract terms 

● Disputes between business partners or employees 

● Failure to meet the terms of an agreement such as a lease, mortgage, or loan document

The legal process for a breach of contract

Both parties should work together to find a solution to fulfill the terms of the contract adequately. Before any legal action is taken, the complainant should send a demand letter to the offending party to get that person to fulfill the arrangement independently. If this happens, there is no need to seek further action. However, if the issue is not resolved, it is time to get an attorney involved. During a breach of contract case, a lawyer’s primary purpose is to step in and help both parties fulfill the contract as initially agreed. Lawyers then attempt to collect damages due to the breach and restore what was lost during that timeframe. 

Material versus non-material breaches 

Breaches of contract range in severity, and so do the consequences. The damages received depend on the type of breach that took place. Breaches of contract fall into two main categories: material and non-material cases. 

Material breaches 

Material breaches significantly impact the contract’s validity and may make the entire contract void. One example of a material breach would be if someone paid for an item to be delivered to a business but only received part of what was ordered. This type of breach puts the entire contract in jeopardy, and the complainant may sue for the total contract price.  

Non-material breaches

Non-material breaches are less severe and are not as serious as material breaches. You may only sue for damages incurred by this breach of contract with this type of case. The point of a non-material breach is to fulfill the means of the original contract and compensate for damages incurred. 

Breach of contract legal assistance in Maitland, FL 

The Boutty Law Firm, P.A. has experience negotiating business law and breach of contract cases. If you entered a partnership with another business owner who isn’t meeting their terms of the agreement, it might be time to obtain legal assistance from our experienced attorneys. Call our office at 407-622-1395 to schedule a consultation.