This month’s post on Silicon Bayou News shares some important lessons learned by both investors and project creators in a failed Kickstarter project. Head on over to Silicon Bayou News to read the full story.

1. Contracts protect both parties

A contract is a negotiation and an agreement between two parties where each party defines their expectations and obligations. Do not sign any contract without first asking how that contract protects you. If the contract does not protect you, it may be time to renegotiate your contract.

2. Never start work without a contract

This one may seem obvious, but sometimes people are anxious to get started on their new job. Do not fall into this trap. Never put the cart before the horse and begin work prior to signing a contract with the other party.

3. Never blindly accept the other party’s terms

We all sign contracts without reading through them. In business, this is a bad idea. if you do not understand something in the contract, ask. If there are terms that you do not agree with, try to negotiate better terms. If the other party refuses to negotiate, take some time to consider whether or not you really want to sign that contract.

4. Anticipate negotiation, and know your key points

When you present a contract to someone, expect that they will want to negotiate. When this happens, you need to know your key points. These change from contract to contract, but in general, you want to define when the customer will receive the product or service, when payment is due, what happens when the customer wants to terminate the contract, and any liability that might arise out of the contract.

5. Know when to lawyer up

If they show you their lawyer, you need to show them yours. Any time the other party wants to get their lawyer involved, make sure you have a lawyer representing your interests as well. A lawyer who knows that the other party is unrepresented, may try to take advantage of that person. This happens more often than you may think.

6. Always be specific and confident about money

When someone asks you how much something will cost, be confident and tell them. Never say that you’re not sure. If you do not know how much it costs, tell them you’re going to find out and will get back to them as soon as possible.

Next time you need to sign a contract with a customer or a vendor, follow these six key points, and you will be less likely to run into trouble down the line.

Wine distributor David Martin filed a temporary restraining order against Wines Unlimited, Inc. in Orleans Parish Civil District Court, Louisiana, on September 21, 2012 because of a name conflict between his business and the defendant.

Martin claims that he has owned and operated “Wines Unlimited” in Louisiana since 1950. He alleges trade name infringement, trade name dilution, unfair and deceptive trade practices, and unjust enrichment. The defendant appears to have been operating since 1997.

This case will be interesting, because Martin didn’t register his trade name with the Secretary of State until August 24, 2012. He filed for the trademark with the Patent and Trademark Office on the same day. The defendant is based on Pennsylvania and filed a similar trademark on September 28, 2012.

Regardless of how this case turns out, the lesson small business owners can learn is that careful planning can prevent this type of dispute. Both companies should have invested in their intellectual property protections decades ago, when they started their companies, to ensure that they owned the rights in their names. A careful search by Wines Unlimited back in 1997 when they started their business may have discovered this Louisiana distributor. It would have been much easier (and cheaper) to change their name then.

I had a court appearance this morning but had to wait for several other cases to go before the judge first. One case in particular caught my attention. As best I understand it, a landlord and tenant had a dispute over a commercial lease. The parties had made promises to each other to extend the lease, but had never actually done so. Eventually, the landlord evicted the tenant, who filed suit.

The tenant was a bar that had live music and held big events. The tenant also made significant improvements to the building, which were never reimbursed. The tenant’s suit was based on the fact that he had relied on the landlord’s promise to extend the lease, and he lost out on income because of the broken promise. The parties were in front of the judge today to, first, argue whether or not the tenant had brought his suit within the statute of limitations (in legal parlance: whether or not the tenant’s claim had prescribed)and, second, whether the landlord should personally be named in the suit.

Both parties operated as Louisiana Limited Liability Companies. Both were small, closely held businesses, which were probably only owned by one or two people. The landlord asked the judge to strike his name personally from the pleadings, arguing that his LLC was the one who was liable, not him personally. In response, the tenant argued that the landlord had made several representations and had referred to the company by his own name several times, and therefore should be at least partially personally liable.

The judge granted the tenant’s motion, and ordered that his name be removed from the proceedings. This is a win for the landlord, because now only the LLC is involved in the litigation, and the business owner is no longer personally involved. Even though that could change down the line if discovery reveals that the business owner was commingling or otherwise ignoring corporate formalities, he’s at least safe for the moment.

Moral of the story? When you’re doing business, make sure you’re doing business as your business, not in your personal name.