Monday, June 17, 2013

Shark Tank Contract Law

The ABC show Shark Tank stresses me out. Entrepreneurs go on the show and face a barrage of questions from potential investors, vetting their business acumen and the viability of their product or service. A recent New York Times article, however, has given me hope: A Small Company’s Reality Is Altered by ‘Shark Tank’.

It seems business owners sign an agreement with the Shark Tank folks giving them a 2% stake in sales, regardless of whether any of the "sharks" makes a deal. And even if a deal is struck (i.e., the parties enter into an oral agreement), it does not necessarily mean the parties are obligated to business with each other. "How can this be?" asks the 1L in Contracts. My answer: it depends on the contract language.

For more on contracts, option contracts, entrepreneurship, and business investing, check out the following in the library: