I am always excited talking about documentation.

This is because, as a lawyer, I know how documentation, or lack of it can work for or against you.

And documentation on its own might be useless except for the clauses impeded in it.

This is why I tell my clients that the quality of their documentation is a function of the strength of the clauses in it.

Read that line again...

slowly this time.

Now, when it comes to Partnership agreements, one life-saving cluase that we don't fail to couch properly in favour of our clients is the CONFLICT OF INTEREST CLAUSE.

 “ Parties shall have the right to enter into any contract or be engaged in any  business Insofar as it does not conflict with the interest of the Company”

What that means is that a partner can decide to enter into other partnerships or form other companies either by himself or with others provided he does not allow his personal interest to conflict with the interest of the company.

One practical way to reduce a case of conflict of interest among partners is to expressly state in the Partnership Agreement that

 “ A partner shall not be allowed to enter into a contract or do business on his own with a Company or individual with whom the Company is already doing business with"

Here is an example of how the clause works;

If Barilex Ltd has a standing Contract with Dream Media Ltd.

Alex Iheanacho as a director in Barlex Ltd cannot enter into a personal contract with dream media Ltd for himself as that would amount to a conflict of interest.

seeing that the company (Barilex Ltd) already has a standing contract with Dream Media Ltd.

There is a whole lot that goes into the partnership relationship and that is why trust is not enough to do business with other people.

Accept people, but let the agreement create the trust that guides everyone.

This is why you must not play with your documentation.

There has to be a thoroughly drafted Partnership Agreement between you and

your partners.

This all-important rule of conflict of interest applies to any kind of partnership relationship.

Whether it is a partnership between individuals or a partnership between two or more companies.

If you are currently in any collaboration or partnership with any individual or company and there is no Conflict of Interest clause in your Agreement (assuming you have one)...

There is something fundamentally wrong.

And this could affect your business in the long run.

Be wise.

Get it right with your legal.

Reply to this email and we would be right here to give you all the help that you deserve.

To your #legalsense.

-Barinaada