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November 1, 2013Jonathon C. Clark

Dude, Where’s My Car? How the Proposed Uniform Certificate of Title Act Addresses Conflicts Between the Texas Certificate of Title Act and the Uniform Commercial Code

Commonly, when purchasing a vehicle, a consumer, whom we will call Joe, goes to a dealership and looks around for an affordable and suitable vehicle. After haggling with the salesperson over the terms, making a deal, and arranging a form of payment, Joe fills out paperwork to transfer the ownership of the vehicle and pays the dealer to cover the titling expenses, which the dealer promises to send to the state certificate of title (“CT”) office so that the ownership of record may be transferred to Joe pursuant to the state’s CT law.

Non-Disclosure and Other Preliminary Agreements in Business Transactions

A Confidentiality Agreement (also sometimes referred to as an Non-Disclosure Agreement) is typically the first stage for the due diligence process in a transaction. These agreements can effectively act as a standstill agreement and can take many different approaches including disclaiming reliance or being non-binding. Letters of Intent are an intermediate step between NDAs and definitive binding agreements. The Texas Supreme Court’s opinion in Energy Transfer Partners, L.P. v. Enterprise Products Partners, L.P. makes clear that Texas embraces the principles of freedom of contract among sophisticated businesses, and that they can trust that their legal documents will be enforced as written. This means that in Texas companies can rely on conditions precedent to avoid an unintended partnership or joint venture, and those conditions precedent can be set forth in a confidentiality agreement, letter of intent or other preliminary agreement. This article includes a seller oriented confidentiality agreement and letter of intent.

Considerations in Drafting Limited Liability Company Agreements and Limited Partnership Agreements

Given their structural flexibility and tax advantages, it is little wonder that limited liability companies (“LLCs”) and limited partnerships (“LPs”) have eclipsed the corporation as the primary entities of choice for new businesses in Texas. LLCs and LPs offer a myriad of almost limitless options on ownership structure, company governance and almost all other aspects related to the operation of the entity. However, as it is often said, with much freedom comes much responsibility. A practitioner who puts together a limited liability company (“LLC agreement”) or an agreement of limited partnership (“LP agreement”) for a client should be well versed in the overall structure of these entities and the variables that should be considered in drafting the operative agreement. Both LLCs and LPs are so-called “creatures of contract” in that the Texas Business Organizations Code (“TBOC”) chapters on LLCs and LPs give great deference to the LLC agreement or LP agreement to define the rights and obligations of the members and partners, respectively, of these entities. This paper analyzes select provisions of the LLC agreements and LP agreements that practitioners are likely to have to address in drafting an agreement for a client.