Basic Understanding of a Settlement Agreement & Other Legal Documents
As an Amazon-based business owner, you need to have a basic understanding of certain legal documents.
We’re providing these to you one at a time so you can learn as you grow & handle any issues as they come to you.
One of the things that may arise in your business as an Amazon seller is a business dispute. You versus your source of products. You versus a distributor. You versus an Amazon seller that you authorize, and any other host of possible business disputes. Most business disputes are resolved through a settlement procedure, not by going to court and litigating, although that does occur.
When it comes to standard settlement agreements, here’s some things you need to know:
Number one, when you reach a settlement agreement, you want to make sure that agreement, that contract, settles all of the disputes between you and the other side. You want a final resolution that both sides can live with, and that ends the need for lawyers, or further litigation or arbitration. You also want to make sure that in that document that both sides are waiving all claims against each other. Generally the language will be from the beginning of time up until the date that agreement is signed, that both sides are waiving all disputes, all claims known and unknown.
Before you sign it, you also want to make sure that you did a thorough investigation, a “deep dive” to make sure you are aware of everything that occurred between you and the other side.
The third thing is that you want to make sure that if there is a breach of that settlement agreement, that there is some remedy at your disposal. Maybe you are receiving a payment from the other side. Maybe they are agreeing never to sell your products again. What you want to make sure is that that agreement clearly sets forth what happens if there is a breach.
For example, you may have what’s called a liquidated damages clause. A liquidated damages clause just means that upon showing a breach, the other side has to pay a set amount of money. You don’t need to prove what the actual damages are because that would be difficult, time consuming and expensive to do. Liquidated damages just sets forth who pays who, and how much, in case there is a breach.
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