Blog of Richard A. Kranitz, Attorney & Business Coach in Wisconsin.: 2019

Tuesday, May 7, 2019

What are the Benefits of a Written Contract?

Richard Kranitz, Esq., Wisconsin

In this age of the Internet, is having a written contract important? Read this article to find it out.

In this modern age, when everything from your emails to entire books can be safely stored in your computer, is it really important to have agreements in hard copy, or to have them in written form at all? It may surprise you, but yes! Business Attorney Richard A. Kranitz explains in a newly published article.

In this technology-driven age, many people don’t value the importance of legal papers in a hard-copy form. They think that as they have carried out the agreement verbally, it means almost the same. But that’s not how it works; the significance of a written contract is far more important than the one available in your folder or the one done verbally. In his new article, Mr. Kranitz gathered some top reasons why that is so.

1. Provides More Certainty and Authenticity

A piece of paper may have lost its importance in today’s digital world but the significance of a written contract can never alleviate. Written contracts provide more assurance to both committed parties. Verbal contracts are harder to prove.

With verbal contracts, it is likely that a party may agree on something, but later on, back-pedal immediately. This can put you in a lot of financial or legal crisis and damage your reputation as well. With written contracts, there is no scope of denying or backing away; even if a certain party does so, you can always provide evidence and prove them wrong. This will save you from a lot of hassle with the committed party and authorities.

2. Prevents Disputes and Misunderstandings

The worst part about verbal contracts is that people often forget about details – the most important part of a contract. They may remember them for a while but as time goes on, it is likely for them to become hazy on minor details.

Since the spoken words are not recorded anywhere, it is impossible to go back and check. This can create a lot of assumptions and problems in the future. One party may say something else about the contract and the other party may argue something else to be true. And to make the matters worse, there would be nothing to tally from and see who is right or telling the truth. This can give rise to a dispute between the parties and dissolving of the “contract” ultimately.

3. Provides Proof Immediately

A written contract will always come in handy and could be useful at anytime, anywhere. Surely, you can’t carry your laptop wherever you go. It is possible that you have to show your contract at the time when you don’t have your laptop. Having a contract in a paper form will allow you with the feasibility to carry it in your bag wherever you go.

Since contracts are made on a normal paper sheet – as light as air, it wouldn’t be burdensome to take along the contract wherever you go. On the safe side, always keep a saved copy of your written contract on your computer.

4. Clearly States Duties and Responsibilities

A proper, written document contains significant details that a verbal contract may not cover. To make a contract legal, it should consist of two essential components – agreement and considerations. Within these two parts, contain an assortment of provisions that make the contract legal in its truest sense. In these two sections of the contract, there will be offers, terms and conditions, work conditions, payment clauses, liabilities, and breach of conditions. What these pointers will detail out are as follows:

* Terms and conditions – what both parties are required to do under the contract

* Work conditions – how both parties are required to act within the terms of a contract

* Liabilities – how liabilities will be managed in case of a problem

* Payment conditions – how payment will be done under the contract

* Breach of conditions – what happens if either of the party fails to fulfill the conditions.

The clauses in the contract will serve as rules that the committed parties will need to follow no matter what.

5. Gives You Security and Relaxes Your Mind

Knowing that the terms and conditions are clearly elucidated in a written contract gives involved parties peace of mind. There is nothing to worry about or for things to go awry as everything is clearly mentioned in a written form. A properly drafted contract provides committed parties and authorities with a written record of the terms and obligations agreed upon. This also gives you an additional right to pursue further legal rights and duties, if necessary, notes Mr. Kranitz.

Richard A. Kranitz, Business Lawyer

Richard Kranitz is an experienced attorney and business consultant in the areas of corporate, securities and tax planning for corporations, partnerships, joint ventures, limited liability companies, multi-unit enterprises, and a variety of different non-profit entities. In addition, he has counseled their owners and executives in compensation planning, estate plans, and asset protection.

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*** Richard Kranitz (Wisconsin) is an experienced attorney and business consultant in the areas of corporate, securities and tax planning for corporations, partnerships, joint ventures, limited liability companies, multi-unit enterprises, and a variety of different non-profit entities. In addition, he has counseled their owners and executives in compensation planning, estate plans, and asset protection. Attorney profile at: https://solomonlawguild.com/richard-a-kranitz-esq

Richard Kranitz, Attorney at Law

Sunday, January 20, 2019

Richard A. Kranitz, Esq., comments on Manitowoc Company v. Lanning, a recent decision from the Supreme Court of Wisconsin

Richard Kranitz, business coach and lawyer in Grafton, Wisconsin

Veteran business law attorney, Richard A. Kranitz, Esq., comments on Manitowoc Company v. Lanning, a recent decision from the Supreme Court of Wisconsin, addressing the enforceability of non-solicitation of employees provision in an employment agreement

In his newest published article, business lawyer and coach Richard Kranitz reviews the Wisconsin Supreme Court case of Manitowoc Company v. Lanning, which has important implications for employment agreements. The full article is available on the blog of Mr. Kranitz at https://richardkranitzblog.blogspot.com/

The defendant John Lanning worked for the Manitowoc Company (hereinafter “Manitowoc”) for 25 years as a chief engineer of its construction crane division, starting in 1985. In 2008, Lanning signed an employment agreement with Manitowoc that contained a non-solicitation of employees provision. The non-solicitation provision prohibits Lanning from “soliciting, inducing, or encouraging any Manitowoc Company employee to terminate his or her employment with Manitowoc Company or to accept employment with a competitor, supplier, or customer of Manitowoc Company” for a period of two years after Lanning’s termination.

Lanning quit his job at Manitowoc on January 6, 2010 and became the director of engineering at SANY America, a competitor of Manitowoc. Manitowoc claimed that Lanning subsequently violated the non-solicitation provision on numerous occasions. “For example, Manitowoc Company asserts that Lanning communicated with at least nine Manitowoc Company employees about potential employment opportunities at SANY, took one Manitowoc Company employee out to lunch in connection with SANY recruitment efforts, took another Manitowoc Company employee on a tour of a SANY crane manufacturing plant in China, and participated in a third Manitowoc Company employee's job interview with SANY.”

First, the Wisconsin Supreme Court addressed whether Wisconsin Statute § 103.465, pertaining to restrictive covenants in employment contracts, applies to the non-solicitation provision in Lanning’s employment contract. The statute provides that “’any covenant’ described in § 103.465 imposing an ‘unreasonable restraint is illegal’ even as to any part of the covenant that would be a reasonable restraint”. Manitowoc argued that section 103.465 does not apply to the non-solicitation provision because it is not a non-compete provision, rather non-solicitation. The Court, however, noted that “[t]ime and again, the case law has focused on the effect of the provision of an employment agreement rather than its label to determine whether it constitutes a restraint of trade governed by Wis. Stat. § 103.465”. Further, “[w]hether a particular agreement constitutes a restraint of trade is based not upon how the agreement is labeled but upon the effect of the agreement on employees and competition”. Therefore, because ”[t]he effect of Lanning's non-solicitation provision is to prevent Lanning and a Manitowoc Company competitor from competing fully with Manitowoc Company in the labor pool by soliciting Manitowoc Company employees”, the provision did fall under the scope of section 103.465.

The Court then addressed whether the non-solicitation provision met the requirements of the statute. The Court noted that the provision prohibits Lanning from soliciting any employee of Manitowoc, which numbers over 13,000 worldwide. “The non-solicitation provision contains no limitations based upon the nature of the employee's position within Manitowoc Company. No limitations are based upon Lanning's personal familiarity with or influence over a particular employee. There is no limit based upon the geographical location in which the employee works.” The Court noted that while an employer may have a protectable interest in “retaining top-level employees, employees who have special skills or special knowledge important to the employer's business, or employees who have skills that are difficult to replace”, it does not have a protectable interest in retaining all employees. Therefore, the Court upheld the lower appellate decision striking down the non-solicitation provision as unenforceable.

Mr. Kranitz notes that the case serves as a cautionary tale for practitioners drafting restrictive provisions in employment contracts as well as employers who wish to utilize such provisions. The case is Manitowoc Company v. Lanning, Case No. 2015AP1530.