Legal issues: five contract clauses to help deter litigation.

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Well-crafted contracts are not only essential to doing business; they are also imperative legal tools. Litigator Nicole Nehama Auerbach of Valorem Law Group explains that there are certain contractual clauses companies should consider for inclusion in their contracts that can make a difference in the face of litigation.

  1. Choice of Law Clause: Allows the parties to specify which state's laws will be applied when a clispuce arising from or relating to the contract occurs. It is particularly helpful when the parties are located in different jurisdictions and it is nec-essary to specify which laws will be used to govern the dispute.

  2. Choice of Forum Clause: Refers to the locale where the litigation will take place. This provision allows the parties to identify not only the particular court (state or federal or either) hut also the jurisdiction in which disputes must be litigated. Similarly, to avoid going to court, parties can opt to include a clause that requires any dispute to be resolved through arbitration.

  3. Survival Clause: Specifies which terms of the contract will continue to be in effect even after the contract has concluded or is terminated. This is particularly helpful to ensure that clauses like non-disclosure of confidential information or non-disparagement survive the ter-mination of the agreement.

  4. Attorney Fee Provision: In the United States, absent a statute or contractual clause that allows for at-torney fees, each party pays his or her own legal fees...

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