Corporate Law Archives - Adishian Law

This article focuses on the concept of unequal bargaining power. Unequal bargaining power occurs throughout business and life. Being aware of when you are facing unequal bargaining power will help you strategize for your best possible outcome and lessen your risk.

Case Study: “Hitching Your Wagon (“Business”) to a Star (“SuperNova”)”

Partnering with a dominant corporation (SuperNova to use an astronomy analogy) by joining their eco-system can often be a smart and fast way to scale a business.

These positives however, are often offset by a loss of bargaining power, which shows up as a shifting of risks onto to the weaker party.

The underlying contracts are often very one-sided (in their favor) and can be legally revoked or altered almost at will. Whenever entering into such a relationship, you will want to look at the future risk of cash flows.

Can my (dominant corporation) partner change terms?
If so, do I get notice, or can it be overnight?
If so, what happens to my business?

If you decide to hitch your business to a economic Supernova, it is important to take steps to maintain the certainty of your future cash flows and quickly diversify your company’s dependence upon one relationship for its growth or existence. You will want to consult with a solid business lawyer to review contracts and advise you as to potential risks as well as steps to mitigate those risks.

About Adishian Law Group, P.C.

Adishian Law Group (https://adishianlaw.com) is a California law firm with a statewide practice in the areas of Corporate law, Employment law, Real Estate law and Mediation Services. As of November 2015, the firm has represented corporate and individual clients located across 22 California counties, 13 States outside of California and 9 foreign countries in over 480 legal matters. Adishianlaw.com is one of the oldest continually operating law firm websites on the Internet. The firm serves its clientele via three offices located in the major business hubs of El Segundo, Palo Alto and San Francisco.

For more information about this case, contact Chris Adishian:

If you are an entrepreneur, you need to understand risk management and Insurance. Risk management and insurance knowledge is essential for any business owner, asset owner or executive charged with running the enterprise.

Are you a small business? These days that is generally viewed as any business below $50M in annual revenue. Are you insured? The answer is always YES. The question is how…

If you have not purchased insurance, then you are “self-insured” – essentially relying on a combination of faith, your business cash flow and assets, and your personal cash flow and assets. Once you have a business of any size, it is wise to defend that business and cash flow with a combination of law and insurance. The foundation of a long term successful business is growing, recurring cash flows. Your cash flow cannot grow if it is always paying liabilities, and it won’t recur if one of the liabilities put you out of business.

Two components of your business advisory team should be a solid business lawyer and an experienced commercial insurance agent.

About Adishian Law Group, P.C.

For more information about this article, contact Chris Adishian: