Articles

Prevention Over Cure: Preparing Your Business for Trial

A well-known Caribbean proverb says, “Trouble nuh set like rain,” meaning trouble doesn’t give warning signs as rain does. This highlights a crucial truth: unlike bad weather, adversity often strikes without notice. Many businesses start with proper record-keeping, managing accounts, and formalizing agreements. However, over time, these practices may become lax or never fully established. Some rely solely on trust, leaving no written documentation to back up agreements, which can create serious issues down the line. This is where Murphy’s Law comes in: “Anything that can go wrong will go wrong.” Business owners may find themselves in court, struggling to prove their case without documentation. While no one starts a business expecting disaster, challenges do arise. It’s essential to run your business with the mindset that, if you ever end up in court, your records and agreements will hold up under scrutiny. A simple habit, such as asking, “How would this sound in court?” can help you prepare for potential legal challenges. What might seem clear to you could look different to a judge. In court, the judge evaluates the evidence—or lack thereof—to decide the case. By adopting preventative strategies, you’ll appreciate the role of evidence and operate your business in a way that ensures your dealings are sound.

[1] Evidence in Business In any trial, evidence is crucial to proving a case. A cause of action gives a party the right to be heard in court, but it’s the evidence that builds the case. Both criminal and civil proceedings require parties to disclose the evidence they intend to use. In criminal cases, however, the defense isn’t required to disclose its evidence before trial. Evidence is governed by rules that determine what is admissible, excluding some while allowing others. In essence, evidence helps prove or disprove the disputed facts of the case. The Evidence Act of Belize defines “document” broadly to include books, maps, graphs, drawings, photographs, and electronic devices that can reproduce sound, data, or visual images. A lack of evidence creates “gaps” in a case, which a judge or jury may have to fill. These gaps can either help or harm a party’s position. Sometimes, surrounding details—known as circumstantial evidence—are used to fill these gaps. In the rush of daily business activities, it’s easy to overlook receipts, documents, and phone conversations. However, these details can become critical pieces of evidence if disputes arise. Even screenshots of messages can support a case. Documenting and preserving this information can make a significant difference when resolving legal issues.

Strategies for Businesses

1. Keep Records of Everything
Memories fade and running a business can make it easy to lose track of key information and documents. Implementing a file management system with clear identifiers for your customers will help you locate relevant information quickly. Receipts serve as tangible proof of transactions, helping establish timelines, verify claims, and support testimony in legal disputes. They can also demonstrate consistency in financial records and help with contract enforcement or breach of contract claims. Many businesses have moved away from manual logging, so if you’re more tech-savvy, consider
using digital record-keeping tools with reliable backup systems. Digital records provide a safe, organized, and accessible way to store important information.
2.
Reduce Oral Agreements to Writing In some situations, the stakes in an agreement may not justify formalizing every transaction. But when there’s a lot at risk, it’s vital to put oral agreements in writing. Even a simple draft on paper, signed by both parties, can serve as evidence of the mutual intention to form, and execute the agreement. Alternatively, confirming agreements via email or text messages is a practical approach. In smaller markets, many commercial agreements are made quickly. Contrary to popular belief, business is often personal as well as professional. A screenshot of a text message or email confirmation can be used as evidence in court Written confirmations also clarify terms and allow the other party to confirm or correct any misunderstandings. This ensures both parties are aligned in their understanding of the agreement.

3.
Use Email Notes to Self
If sending an email or text message confirmation feels uncomfortable, another option is to email yourself a “note to self.” Emails generate valuable bio-data such as time, date, and sender information. By emailing yourself, you can document facts or recollections of a conversation while they are still fresh in your mind or contemporaneous with the event. Legal disputes often arise over whether an event occurred on a specific date and time. While the weight of a “note to self” email is up to the judge’s discretion, it’s a practical strategy for busy professionals. Creating a dedicated email account for this purpose can help you maintain a clear paper trail and chronological record of events. When using this method, include as much detail as possible to ensure accuracy and clarity.
4.
Be Impeccable with Your Word A contract can be breached in various ways, with one common breach being the failure to fulfill your obligations—essentially, breaking your promise. Words are powerful, and miscommunication can cause significant issues in business. Your word must carry weight. Only commit to what you can deliver. Honest communication fosters trust and consistency in business relationships. Even if a venture fails, being truthful strengthens your position and preserves your integrity. Conclusion Stephen Covey, in his book 7 Habits of Highly Effective People, suggests beginning with the end in mind. While you may have lawyers to resolve legal issues, you can put yourself in a stronger position by adopting proactive strategies. Keep detailed records, formalize agreements in writing, and practice impeccability with your words. These habits will protect your business from legal vulnerabilities and help you weather any challenges. Finally, as the Caribbean proverb advises: “Nuh wait till drum beat before you grind yuh axe.” Translation: Don’t wait for trouble to prepare—be ready for all eventualities.

Immanuel P.O. Williams is an Associate at Glenn D. Godfrey & Co. LLP. You can reach

him at immanuel@godfreylaw.net or visit godfreylaw.net. This article is for general information and not legal advice.

Caught in the Clause: Limits on Arbitration Clauses & the Doctrine of Severability

Dispute resolution doesn’t always necessitate going to court. Alternative methods like mediation, arbitration, and negotiation offer diverse avenues for conflict resolution, often involving an impartial third party. In commercial contracts, arbitration clauses are particularly common.

Arbitration is a private, alternative dispute resolution method where parties agree to let an independent third party make a binding decision. This agreement can stem from either mutual consent or a court order. Even when arbitration is agreed upon, certain situations—such as a void contract—may lead a party to seek court intervention instead. This is where the doctrine of separability becomes significant.

The Doctrine of Separability asserts that an arbitration clause within a contract is a separate agreement from the main contract. This principle ensures that parties cannot evade arbitration by challenging the validity of the main contract. Thus, even if the main contract is deemed invalid or terminated, the arbitration agreement remains enforceable, compelling the parties to resolve disputes through arbitration.

Instances When the Doctrine of Separability May Be Challenged

While the doctrine of separability typically upholds arbitration agreements, there are instances where its application may be challenged, or the arbitration clause may not survive the contract.

Absence of Binding Contract

In DHL Project v. Gemini Ocean Shipping (the Newcastle Express) [2022] EWCA Civ 1555, the English Court of Appeal considered whether an arbitration agreement was binding when a pre-condition to the contract’s effectiveness was not satisfied. The Court distinguished between disputes concerning contract formation and contract validity. It held that in the absence of a binding agreement, the arbitration clause stood and fell with the main contract. Therefore, no contract existed to arbitrate.

Illegal Contracts or Contracts Against Public Policy

Courts may declare arbitration clauses void if the contract itself is illegal or against public policy. However, this is not always clear-cut, as courts may sometimes decide that an arbitrator is better suited to address the issue of illegality

Challenging the automatic say of proceedings

Parties to an agreement might feel disadvantaged by the potential outcomes of arbitration and prefer to have their disputes settled in court. These situations often arise from a breakdown of trust or confidence between the parties. Faced with an arbitration clause that limits their legal rights or avenues for recovery, a party may feel cornered into a process they believe to be unjust.
Often, arbitration clauses in complex commercial agreements include predetermined choices of arbitrators, a choice of forum indifferent to one party’s situation, or a limitation of liability clause that excludes potential remedies. Faced with an arbitration process they deem invalid or untrustworthy, a party might seek court intervention, initiating a challenging legal battle. However, courts typically uphold the principle that it is not their role to rewrite the parties’ agreement, even if one party feels disadvantaged.
In many jurisdictions, courts have a supervisory role in arbitration. In the UK and other Commonwealth jurisdictions, courts may also resist enforcing arbitration clauses under certain conditions. Before granting a stay of proceedings pending arbitration, courts assess whether the dispute falls within the arbitration clause’s scope and whether the prerequisites for a stay are met.
English courts have recognized that serious allegations of fraud or professional dishonesty may justify refusing a stay of proceedings. In cases such as Radford v. Hare and Turner v. Fenton, courts have ruled that allegations of fraud by the party resisting arbitration can trigger judicial discretion, allowing the case to be heard in open court instead.
Drafting and reviewing arbitration clauses with care is crucial. A clear, enforceable arbitration agreement aligned with the parties’ intentions is vital to avoid potential challenges later on. Legal representatives play a key role in ensuring that arbitration clauses are robust and reflect the parties’ expectations.
Judicial decisions highlight that successfully challenging arbitration depends on the specifics of the dispute and the wording of the arbitration clause or the governing legislation. Despite the complexities, with the right legal strategy and careful contract drafting, it is possible to navigate and challenge arbitration mechanisms effectively.

Immanuel P.O. Williams is an Associate at Glenn D. Godfrey & Co. LLP. You can reach him at immanuel@godfreylaw.bz or visit godfreylaw.net. This article is for general information and not legal advice.

Cards on the table: Ex-Parte Injunction Applications- The Imperative of Full Disclosure

In the realm of legal remedies, injunctions stand as a formidable tool, capable of restraining harmful actions or mandating specific conduct. They come in various forms—interim or permanent, prohibitory or mandatory—yet their essence remains consistent: to preserve justice. However, when the urgency of a situation demands immediate action, ex-parte injunction applications emerge as a legal recourse, allowing one party to seek relief without the presence of the opposing party. Yet, this expedited route comes with a crucial caveat: the duty of full disclosure.

Ex-parte injunctions, where one party petitions the court without notifying the other party, are reserved for circumstances of extreme urgency or the necessity of secrecy. This unique legal maneuver grants the applicant relief swiftly before the opposing party can respond. However, it also places a weighty responsibility on the applicant to provide the court with all relevant information, even if it may benefit the opposing side.

Types of situations where without notice injunctions are commonly sought include:

Breaches of Non-Compete Clauses;
Dissipation of asset of an estate;
Trespass to land;
Preventing nuisance;
Child protection orders;
Stopping the publication of defamatory statement;
Protecting intellectual property; or
Enforcing confidentiality agreements or NDA’s;

At the heart of ex-parte injunction applications lies the duty of full disclosure. This duty demands that the applicant present all material facts to the court, ensuring an informed decision-making process. Failure to disclose pertinent information can result in the dismissal of the application.

Despite the clear ethical imperative of full disclosure, applicants may be tempted to withhold information, either out of fear or strategic calculation. However, such actions often prove counterproductive, jeopardizing the credibility of the application and undermining the trust of the court.

Given the complexities involved, judges often hesitate to grant injunctions without notice. In the notable case of National Commercial Bank v Olint [2009] 1 WLR 1405 Lord Hoffman expressed the view that a judge should refrain from considering such applications unless giving notice would allow the defendant to thwart the injunction’s purpose. The Court emphasized that even a simple telephone call would have been preferable to not giving any notice at all.

The duty of full disclosure must be balanced with the need for swift action in urgent cases. While time may be of the essence, honesty and transparency remain paramount. Thorough investigation and comprehensive disclosure not only fulfill ethical obligations but also strengthen the credibility of the application.

For legal practitioners navigating ex-parte injunction applications, adherence to the duty of full disclosure is essential. Thoroughly investigating the issues, providing a detailed account of events, and maintaining honesty throughout the process are indispensable strategies.

By laying all cards on the table, applicants not only uphold ethical standards but also bolster the integrity of their case. While the urgency of the situation may be pressing, the importance of transparency cannot be overstated. In the delicate balance between expediency and integrity, the path of honesty ultimately leads to the most favorable outcomes.

Immanuel P.O. Williams is an Associate at Glenn D. Godfrey & Co. LLP. You can reach him at immanuel@godfreylaw.net or visit godfreylaw.net. This article is for general information and not legal advice.

Look Before You Leap: ENTERTAINMENT CONTRACTS IN THE ORANGE ECONOMY

Introduction

In the vibrant landscape of Belize’s Orange Economy, encompassing a diverse array of creative industries, practitioners often find themselves navigating business arrangements without formal contracts. This ad hoc approach, colloquially known as “ketch and kill,” can lead to pitfalls for emerging talents. This article emphasizes the importance of formalizing business agreements through entertainment contracts to protect the rights and interests of creatives.

Understanding the Orange Economy

Defined as the creative economy, the Orange Economy is a rapidly growing sector contributing to 3% of the global GDP, generating $2.25 trillion annually. It is called the Orange Economy because orange is traditionally associated with creativity.

With Belize making strides in the festival tourism scene, local talents are gaining exposure. As creativity becomes a commercial powerhouse, the need for careful consideration of business arrangements, particularly through contracts, becomes evident.

The Role of Entertainment Contracts

Entertainment contracts serve as binding agreements outlining the terms and conditions of business arrangements between parties. Tailored to the specific needs of the artist and industry, these contracts protect rights and define crucial details such as scope of work, timelines, payment terms, and more. Lack of a formal contract can lead to challenges, as exemplified by DJs facing unexpected situations during events.

Common Pitfalls in Entertainment Contracts

Contracts that fail to address the creative’s needs, often laden with legal jargon and vague performance obligations, can create ambiguity. Clarity is essential, ensuring that the contract aligns with the creative’s brand values and business goals. Additionally, protecting intellectual property (IP) is paramount. Creatives must address the use, management, and distribution of their IP in the contract to safeguard against copyright infringement and trademark violations.

Compensation terms must be explicit to avoid delays or non-payment. Ambiguities in this area can result in creatives not receiving rightful compensation for their work. Legal advisers play a crucial role in implementing mechanisms to protect against such risks.

Best Practices for Negotiating Entertainment Contracts

Force majeure clauses have gained prominence, especially post-pandemic, providing protection when unforeseen circumstances disrupt contractual obligations. Creatives are urged to recognize the value of their reputation and artistry, necessitating due diligence in contractual engagements. Seeking legal advice helps foresee potential liabilities and ensures contracts are enforceable.

Conclusion

Belize’s Orange Economy is a reservoir of talent, making it imperative for creatives to formalize business arrangements through contracts. As the creative industry expands globally, the importance of protecting rights and establishing clear terms cannot be overstated. Before creatives sign the dotted line, it’s crucial to “look before you leap” and seek legal advice to navigate the intricacies of entertainment contracts in the evolving landscape of Belize’s Orange Economy.