HHere are some suggested business rules for business. These rules have come about from the last fifteen years of legal practice.

MARK’S RULES

1) Every document may become an exhibit in a lawsuit. Keep your documents formal and direct. Do not use humor or references which may be misinterpreted. There is always someone, somewhere, who will be offended by something. He or she may be a Judge, Jury member, or a potential Plaintiff.

2) Make your document the last one on the pile. Respond to every letter with your own position, correction, interpretation and change. (Every change order and modification will affect price and delivery.)

3) Have one individual responsible for reading the terms on all incoming documents, and have this same individual responsible for objecting to unacceptable terms. (Do not automatically send invoices to Accounting and material safety data sheets to Engineering.)

4) Send a confirming memo to every telephone order and modification. (Keep attaching your standard terms and conditions to your outgoing documents.)

5) Know who you are working with. Does the Agent have authority to bind the Principal? Does the Parent corporation own the tooling, while its Subsidiary orders production? Are you working with an Individual person or a Corporate entity? (Check the government Web sites, ask for references, do not rely upon D&B alone.) (Trust but Verify.)

6) Send a letter demanding Adequate Assurances of Performance if you suspect your customer is in financial difficulty.

7) If your customer’s payments are beyond your credit terms, send out shipments C.O.D. Do not give new credit in exchange for payment on old invoices, or other fancy repayment schemes.

8) Have e-mail, and scanned documents, sent to one person in your company who can serve as the Custodian of Records. This person needs to verify that the document was stored in the computer in the normal course of business at the time the document was generated.

9) Get a signed confirming document for every agreement and modification for customers who are: inventors, novices, artists, and actors.

A disproportionate number of legal problems come about because of poor communication with, or a lack of understanding by, inexperienced customers.

10) Do not trust “Reorganization Specialists” who want you to forego your legal remedies or take a partial payment, while they loot the debtor’s assets.

11) Never allow a “polished” First Article to go to a customer. It will create an Express Warranty. Get an Acceptance of First Articles in writing prior to any production.

12) If time is really of the essence, describe the expected losses which will be incurred due to a delay in performance, in the Purchase Order.

13) If you are going to guarantee that a customer’s design will work for its intended purpose, include this guarantee in your pricing. If the customer is not paying for the guarantee, then disclaim all Warranties of Fitness for a Particular Purpose and limit all claims for Consequential Damages in your contract.

14) If a third party promises to pay your customer’s bill, you must get it in writing.

15) The more convoluted and complicated the business deal - the less likely you are to get paid.

Mark S. Mahoney, Esq.

mksmahoney@e-universe.com

USEFUL RESOURCES

The Society of the Plastics Industry:

The Society of Plastics Engineers:

North American Die Casters Association:

American Mold Builders Association:

Injection Molding Magazine:

Moldmaking Technology Magazine:

California Secretary of State:

California State Controller:

California State Chamber of Commerce: