If you`re starting a business or entering into a partnership, you may have heard of a “whatever happens agreement.” This type of agreement is also commonly referred to as a “shotgun clause” or “Texas shoot-out clause.” But what exactly is it, and why might you need one?
A whatever happens agreement is essentially a legal contract between two or more parties that outlines the procedures for resolving a dispute or disagreement between them. This type of agreement can be useful in many different situations, including:
– Business partnerships: If you`re starting a business with someone else, you might want to include a whatever happens agreement to help prevent disputes or disagreements from derailing your partnership.
– Shareholder agreements: If you`re part of a company with multiple shareholders, a whatever happens agreement can help ensure that everyone is on the same page in the event of a dispute.
– Real estate transactions: Whether you`re buying or selling property, a whatever happens agreement can help protect both parties and ensure that the transaction goes smoothly.
So how does a whatever happens agreement work? Essentially, it gives each party the ability to offer a buyout price for the other party`s share of the business, property, or other asset in the event of a dispute. If one party wishes to buy the other out, they make an offer. The other party then has the option to either accept the offer or counter with their own offer. This continues until one party either accepts an offer or declines to make a counteroffer, at which point the other party is free to purchase their share of the asset at the last offered price.
This type of agreement can be beneficial for several reasons. For one, it can help prevent disputes from escalating and damaging the business or partnership. It also provides a clear and straightforward process for resolving disputes, which can save time, money, and stress for everyone involved.
If you`re considering a whatever happens agreement for your business or partnership, it`s important to work with an experienced attorney who can help you draft an agreement that meets your specific needs and goals. The agreement should be tailored to your situation and clearly outline the procedures for resolving disputes, including how offers will be made and accepted, how the buyout price will be determined, and any other relevant details.
In conclusion, a whatever happens agreement can be a helpful tool for businesses, partnerships, and real estate transactions. By providing a clear process for resolving disputes, it can help protect everyone involved and prevent disagreements from escalating into something more serious. If you`re considering a whatever happens agreement, be sure to work with an experienced attorney to ensure that the agreement is tailored to your needs and meets your specific goals.