Читать книгу How to Be a Lawyer - Jason Mendelson - Страница 24

There are different definitions of transaction costs, but for our purposes transaction costs are the cost—in both time and money—associated with creating a relationship between two parties. For instance, in closing a venture deal between an entrepreneur and a venture capitalist, transaction costs will include not only the costs of lawyers for both sides but also the costs of meetings, the time involved to complete due diligence, and every step of the process from that first meeting to the signed definitive documents.

When entering a contractual relationship, consider that all good contracts minimize current and future transaction costs. This might mean you choose a different structure on a deal because the structure, itself, is cheaper to paper than another structure. Always consider the value you bring to a contract. If the value of the contract is $10,000 consider how many hours are appropriate versus a merger worth $100,000,000.

We find future transaction costs to be even more important to consider. For instance, you should negotiate a detailed merger letter of intent (LOI) to avoid too much negotiation ambiguity while drafting the definitive documents. As you have more negotiating power during the LOI stage, what would take two hours to negotiate now could save you tens of hours later. In short, you are defining the relationship up front so that you don't have to run up huge costs, both in time and money, figuring who has which rights and who receives what consideration.