WARRANTY DEED WITH VENDOR’S LIEN
(Vendor’s Lien Reserved and Assigned to Third Party Lender)
STATE OF _______________
COUNTY OF _____________
KNOW ALL MEN BY THESE PRESENTS:
THAT THE UNDERSIGNED, ______________________________________________________ _____________________________________________________ [full legal name(s) of seller(s)], hereinafter called “Grantor(s)”, whether one or more, for and in consideration of the sum of TEN DOLLARS ($10.00) and other valuable consideration to the undersigned in hand paid by the Grantee herein named, the receipt of which is hereby acknowledged, and the further consideration of the execution and delivery by the Grantee of that one certain promissory note described on Exhibit A attached hereto, the payment of which note is secured by the vendor’s lien herein retained, and is additionally secured by a deed of trust of even date therewith and also described on Exhibit A attached hereto, has GRANTED, SOLD AND CONVEYED, and by these presents does GRANT, SELL AND CONVEY unto _____________________________________ ___________________________________________________ [full legal name(s) of grantee(s)], hereinafter referred to as the “Grantee” whether one or more, all of Grantor’(s) right, title and interest in and to the real property described as follows:
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
[insert full legal property description]
This conveyance, however, is made and accepted subject to any and all restrictions, easements, covenants and conditions, if any, relating to the hereinabove described property as the same are filed for record in the real property records of _________________________ County, _________________________ [state].
TO HAVE AND TO HOLD the above described premises, together with all and singular the rights and appurtenances thereto in anywise belonging, unto the said Grantee, Grantee’s heirs, executors, administrators, successors and/or assigns forever; and Grantor(s) do hereby bind Grantor(s)’ heirs, executors, administrators, successors and/or assigns to WARRANT AND FOREVER DEFEND all and singular the said premises unto the said Grantee, Grantee’s heirs, executors, administrators, successors and/or assigns, against every person whomsoever claiming or to claim the same or any part thereof.
But it is expressly agreed: (1) that the Vendor’s Lien, as well as Superior Title in and to the above described premises, is retained against the above described property, premises and improvements until the above described not and all interest thereon are fully paid according to the face, tenor, effect and reading thereof, when this Deed shall become absolute; and (2) that the Lender set forth on Exhibit A, attached hereto, at the instance and request of the Grantee herein, having advanced and paid in cash to the Grantor(s) herein that portion of the purchase price of the herein described property as is evidenced by the hereinabove described Note, the Vendor’s Lien, together with the Superior Title to said property, is retained herein for the benefit of said Lender and the same are hereby TRANSFERRED AND ASSIGNED to said Lender, its successors and assigns.
Current ad valorem taxes on the property having been prorated, the payment thereof is assumed by Grantee.
EXECUTED this ________ day of ____________________, 20_____ but to be effective upon the date this instrument is filed for record in the real property records of _________________________ County, _________________________ [state].
GRANTOR(S):
______________________________ ____________________________
[name of seller] [name of seller]
STATE OF _______________
COUNTY OF _____________
Before me, the undersigned Notary Public, on this day personally appeared _________________ __________________________________________________________________________ known to me (or proved to me on the oath of _____________________________________________, or through Drivers License or _____________________________________________) to be the persons whose names are subscribed to the foregoing instrument and acknowledged to me that they executed in the capacity set forth and for the purpose and consideration therein expressed.
Given under my hand and seal of office this ________ day of ____________________, 20_____.
[Notarial seal, if any]
_______________________________
NOTARY PUBLIC, STATE OF ____________
After recording, return to Grantee, at:
Grantee’s address:
_______________________________
_______________________________
_______________________________
Wednesday, December 13, 2006
Form: WARRANTY DEED
WARRANTY DEED
For good consideration, we (I) ____________________________________________________________ of _____________________________________, County of _____________________, State of _______________________________, hereby bargain, deed and convey to______________________________ of ____________________________, County of ______________________________, State of _____________________, the following described land in _____________________county, free and clear with WARRANTY COVENANTS; to wit:
Grantor, for itself and its heirs, hereby covenants with Grantee, its heirs, and assigns, that Grantor is lawfully seized in fee simple of the above-described premises; that it has a good right to convey; that the premises are free from all encumbrances; that Grantor and its heirs, and all persons acquiring any interest in the property granted, through or for Grantor, will, on demand of Grantee, or its heirs or assigns, and at the expense of Grantee, its heirs or assigns, execute and instrument necessary for the further assurance of the title to the premises that may be reasonably required; and that Grantor and its heirs will forever warrant and defend all of the property so granted to Grantee, its heirs, against every person lawfully claiming the same or any part thereof.
Being the same property conveyed to the Grantors by deed of ______________________________________, dated ___________________, 20____.
WITNESS the hands and seal of said Grantors this ______ day of _________, 20____.
_______________________________________
Grantor
_______________________________________
Grantee
STATE OF ___________________
COUNTY OF _________________
On____________________before me,______________________, personally appeared _________________________________________, personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
WITNESS my hand and official seal.
Signature______________________________
Affiant _____Known _____Unknown
ID Produced______________________
(Seal)
For good consideration, we (I) ____________________________________________________________ of _____________________________________, County of _____________________, State of _______________________________, hereby bargain, deed and convey to______________________________ of ____________________________, County of ______________________________, State of _____________________, the following described land in _____________________county, free and clear with WARRANTY COVENANTS; to wit:
Grantor, for itself and its heirs, hereby covenants with Grantee, its heirs, and assigns, that Grantor is lawfully seized in fee simple of the above-described premises; that it has a good right to convey; that the premises are free from all encumbrances; that Grantor and its heirs, and all persons acquiring any interest in the property granted, through or for Grantor, will, on demand of Grantee, or its heirs or assigns, and at the expense of Grantee, its heirs or assigns, execute and instrument necessary for the further assurance of the title to the premises that may be reasonably required; and that Grantor and its heirs will forever warrant and defend all of the property so granted to Grantee, its heirs, against every person lawfully claiming the same or any part thereof.
Being the same property conveyed to the Grantors by deed of ______________________________________, dated ___________________, 20____.
WITNESS the hands and seal of said Grantors this ______ day of _________, 20____.
_______________________________________
Grantor
_______________________________________
Grantee
STATE OF ___________________
COUNTY OF _________________
On____________________before me,______________________, personally appeared _________________________________________, personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
WITNESS my hand and official seal.
Signature______________________________
Affiant _____Known _____Unknown
ID Produced______________________
(Seal)
Form: WARRANTY BILL OF SALE
WARRANTY BILL OF SALE
BE IT KNOWN, that for good consideration, and in payment of the sum of $____________, the receipt and sufficiency of which is acknowledged, the undersigned _______________________ of _______________ (Seller) hereby sells and transfers to ________________________________ of _____________________________________________________________________ (Buyer) and its successors and assigns forever, the following described chattels and personal property:
Seller warrants to Buyer it has good and marketable title to said property, full authority to sell and transfer said property, and that said property is sold free of all liens, encumbrances, liabilities and adverse claims of every nature and description whatsoever.
Seller further warrants to Buyer that it will full defend, protect, indemnify and hold harmless the Buyer and its lawful successors and assigns from any adverse claim thereto.
SAID ASSETS ARE OTHERWISE SOLD IN "AS IS" CONDITION AND WHERE PRESENTLY LOCATED.
Signed this _____ day of________________, 20____.
In the presence of:
______________________________ _______________________________
Witness Seller
_______________________________ _______________________________
Address Address
Other Forms You May Need
BE IT KNOWN, that for good consideration, and in payment of the sum of $____________, the receipt and sufficiency of which is acknowledged, the undersigned _______________________ of _______________ (Seller) hereby sells and transfers to ________________________________ of _____________________________________________________________________ (Buyer) and its successors and assigns forever, the following described chattels and personal property:
Seller warrants to Buyer it has good and marketable title to said property, full authority to sell and transfer said property, and that said property is sold free of all liens, encumbrances, liabilities and adverse claims of every nature and description whatsoever.
Seller further warrants to Buyer that it will full defend, protect, indemnify and hold harmless the Buyer and its lawful successors and assigns from any adverse claim thereto.
SAID ASSETS ARE OTHERWISE SOLD IN "AS IS" CONDITION AND WHERE PRESENTLY LOCATED.
Signed this _____ day of________________, 20____.
In the presence of:
______________________________ _______________________________
Witness Seller
_______________________________ _______________________________
Address Address
Other Forms You May Need
Form: Sale of Goods Agreement
Sale of Goods Agreement
Agreement made _____________ (date), between _________________________, of _________________________________ (address), _____________________ (city), ______________ (county), ________________ (state), in this agreement referred to as seller, and ___________________, of ____________________________ (address), __________________ (city), __________________ (county), _____________ (state), in this agreement referred to as buyer.
SECTION ONE: SALE OF GOODS
Seller shall sell, transfer and deliver to buyer on or before ____________________ (date), the following personal property: ____________________________________________________________
____________________________________________________________
____________________________________________________________ (description of goods).
SECTION TWO: CONSIDERATION
Buyer shall accept the goods and pay ________________________________________ Dollars ($ ________ ) for the goods.
SECTION THREE: IDENTIFICATION OF GOODS
Identification of the goods to this agreement shall not be deemed to have been made until both buyer and seller have specified that the goods in question are to be appropriated to the performance of this agreement.
SECTION FOUR: PAYMENT ON RECEIPT
Buyer shall make payment for the goods at the time when, and at the place where, the goods are received by buyer.
SECTION FIVE: RECEIPT CONSTRUED AS DELIVERY
Goods shall be deemed received by buyer when delivered to buyer at ________________________________________ (address), __________ (city), __________ (county), __________ (state).
SECTION SIX: RISK OF LOSS
The risk of loss from any casualty to the goods, regardless of the cause, shall be the responsibility of the seller until the goods have been accepted by the buyer.
SECTION SEVEN: WARRANTY OF NO ENCUMBRANCES
Seller warrants that the goods are now free, and that at the time of delivery shall be free from any security interest or other lien or encumbrance.
SECTION EIGHT: WARRANTY OF TITLE
Furthermore, seller warrants that at the time of signing this agreement, seller neither knows nor has reason to know of the existence of any outstanding title or claim of title hostile to the rights of seller in the goods.
SECTION NINE: RIGHT OF INSPECTION
Buyer shall have the right to inspect the goods on arrival and, within _______ business days after delivery, buyer must give notice to seller of any claim for damages on account of condition, quality or grade of the goods, and buyer must specify the basis of the claim of buyer in detail. The failure of buyer to comply with these conditions shall constitute irrevocable acceptance of the goods by buyer.
In witness whereof, the parties have executed this agreement at ________________________________________ (designate place of execution) the day and year first above written.
_________________________
Signature
_________________________
Signature
Agreement made _____________ (date), between _________________________, of _________________________________ (address), _____________________ (city), ______________ (county), ________________ (state), in this agreement referred to as seller, and ___________________, of ____________________________ (address), __________________ (city), __________________ (county), _____________ (state), in this agreement referred to as buyer.
SECTION ONE: SALE OF GOODS
Seller shall sell, transfer and deliver to buyer on or before ____________________ (date), the following personal property: ____________________________________________________________
____________________________________________________________
____________________________________________________________ (description of goods).
SECTION TWO: CONSIDERATION
Buyer shall accept the goods and pay ________________________________________ Dollars ($ ________ ) for the goods.
SECTION THREE: IDENTIFICATION OF GOODS
Identification of the goods to this agreement shall not be deemed to have been made until both buyer and seller have specified that the goods in question are to be appropriated to the performance of this agreement.
SECTION FOUR: PAYMENT ON RECEIPT
Buyer shall make payment for the goods at the time when, and at the place where, the goods are received by buyer.
SECTION FIVE: RECEIPT CONSTRUED AS DELIVERY
Goods shall be deemed received by buyer when delivered to buyer at ________________________________________ (address), __________ (city), __________ (county), __________ (state).
SECTION SIX: RISK OF LOSS
The risk of loss from any casualty to the goods, regardless of the cause, shall be the responsibility of the seller until the goods have been accepted by the buyer.
SECTION SEVEN: WARRANTY OF NO ENCUMBRANCES
Seller warrants that the goods are now free, and that at the time of delivery shall be free from any security interest or other lien or encumbrance.
SECTION EIGHT: WARRANTY OF TITLE
Furthermore, seller warrants that at the time of signing this agreement, seller neither knows nor has reason to know of the existence of any outstanding title or claim of title hostile to the rights of seller in the goods.
SECTION NINE: RIGHT OF INSPECTION
Buyer shall have the right to inspect the goods on arrival and, within _______ business days after delivery, buyer must give notice to seller of any claim for damages on account of condition, quality or grade of the goods, and buyer must specify the basis of the claim of buyer in detail. The failure of buyer to comply with these conditions shall constitute irrevocable acceptance of the goods by buyer.
In witness whereof, the parties have executed this agreement at ________________________________________ (designate place of execution) the day and year first above written.
_________________________
Signature
_________________________
Signature
Form: Quitclaim Deed
QUITCLAIM DEED
THIS QUITCLAIM DEED, Executed this ____ day of __________________, 20____, by first party_________________________________________________ whose post office address is___________________________________________ to second party,_______________________________________________________ whose post office address is___________________________________________.
WITNESSETH, That the said first party, for good consideration and for the sum of $_______________ paid by the said second party, the receipt whereof is hereby acknowledged, does hereby remise, release and quitclaim unto the said second party forever, all the right, title, interest and claim which the said first party has in and to the following described parcel of land, and improvements and appurtenances thereto in the County of_____________________, State of_______________, to wit:
IN WITNESS WHEREOF, The said first party has signed and sealed these presents the day and year first above written.
Signed, sealed and delivered in presence of:
____________________________ ______________________________
Witness First Party
____________________________ ______________________________
Witness Second Party
STATE OF }
COUNTY OF }
On________________________________before me,__________________________, personally appeared___________________________________________________, personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
WITNESS my hand and official seal.
_____________________________
Signature
Affiant: _____Known _____Unknown
ID Produced: __________________________
[Seal]
THIS QUITCLAIM DEED, Executed this ____ day of __________________, 20____, by first party_________________________________________________ whose post office address is___________________________________________ to second party,_______________________________________________________ whose post office address is___________________________________________.
WITNESSETH, That the said first party, for good consideration and for the sum of $_______________ paid by the said second party, the receipt whereof is hereby acknowledged, does hereby remise, release and quitclaim unto the said second party forever, all the right, title, interest and claim which the said first party has in and to the following described parcel of land, and improvements and appurtenances thereto in the County of_____________________, State of_______________, to wit:
IN WITNESS WHEREOF, The said first party has signed and sealed these presents the day and year first above written.
Signed, sealed and delivered in presence of:
____________________________ ______________________________
Witness First Party
____________________________ ______________________________
Witness Second Party
STATE OF }
COUNTY OF }
On________________________________before me,__________________________, personally appeared___________________________________________________, personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
WITNESS my hand and official seal.
_____________________________
Signature
Affiant: _____Known _____Unknown
ID Produced: __________________________
[Seal]
Form: QUITCLAIM BILL OF SALE
BE IT KNOWN, for good consideration, and in consideration of the payment of _____________________________, the receipt and sufficiency of which is acknowledged, the undersigned _____________________(Seller) hereby sells, transfers, assigns and conveys unto _____________________ and its successors and assigns forever with quitclaim covenants only, the following described property:
Seller hereby sells and transfers only such right, title and interest as it may hold and that said chattels sold herein are sold subject to such prior liens, encumbrances and adverse claims, if any, that may exist, and Seller disclaims any and all warranties thereto.
Said assets are further sold in "AS IS" condition and where presently located.
Signed this _____ day of __________________, 20____.
In the presence of:
______________________________
Seller
_______________________________
Witness
Seller hereby sells and transfers only such right, title and interest as it may hold and that said chattels sold herein are sold subject to such prior liens, encumbrances and adverse claims, if any, that may exist, and Seller disclaims any and all warranties thereto.
Said assets are further sold in "AS IS" condition and where presently located.
Signed this _____ day of __________________, 20____.
In the presence of:
______________________________
Seller
_______________________________
Witness
Form: OPEN LISTING REALTY AGREEMENT
1. This agreement signed on the ____day of________________ 20____, by and between _________________________(Owner) and _____________________(Real Estate Broker) who agree as follows:
2. Listing term. Owner lists the property described in Paragraph 3, with the Real Estate Broker for a period of _____days, from date hereof.
3. Description of Property. The property listed is located at:
4. Commission. The Owner agrees to pay the Real Estate Broker a commission of _____% of the sale price should the Broker find a purchaser ready, willing, and able to pay at least $___________ for the property or such other sum as may be accepted by Owner. Said commissions are payable upon closing.
5. Non-Exclusive. The Owner retains the right to sell the property directly on his or her own behalf with no sales commission to broker, so long as the Broker did not find this purchaser. The Owner further has the right to list the property with other brokers. If a sale is made within months after this agreement terminates to parties found by the Real Estate Agent during the term of this agreement, and wherein the buyer has been disclosed to the Owner, the Owner shall pay the commission specified above.
6. Forfeit of Deposit. If a deposit of money is forfeited by a purchaser produced by Broker, one half shall be retained by the Broker, providing that this amount does not exceed the commission, and one half shall be paid to the Owner.
Witnessed:
_______________________________ ______________________________
Witness Owner
_______________________________ ______________________________
Witness Broker
2. Listing term. Owner lists the property described in Paragraph 3, with the Real Estate Broker for a period of _____days, from date hereof.
3. Description of Property. The property listed is located at:
4. Commission. The Owner agrees to pay the Real Estate Broker a commission of _____% of the sale price should the Broker find a purchaser ready, willing, and able to pay at least $___________ for the property or such other sum as may be accepted by Owner. Said commissions are payable upon closing.
5. Non-Exclusive. The Owner retains the right to sell the property directly on his or her own behalf with no sales commission to broker, so long as the Broker did not find this purchaser. The Owner further has the right to list the property with other brokers. If a sale is made within months after this agreement terminates to parties found by the Real Estate Agent during the term of this agreement, and wherein the buyer has been disclosed to the Owner, the Owner shall pay the commission specified above.
6. Forfeit of Deposit. If a deposit of money is forfeited by a purchaser produced by Broker, one half shall be retained by the Broker, providing that this amount does not exceed the commission, and one half shall be paid to the Owner.
Witnessed:
_______________________________ ______________________________
Witness Owner
_______________________________ ______________________________
Witness Broker
Form: Installment Sale and Security Agreement
This contract is made this _________[date] between the seller and the buyer, designated below by their signatures and seals.
1. Payment. Seller sells buyer the articles described above (goods) upon the terms set forth below. Buyer, given the choice of paying the net price set forth below or the time price in any installments as set forth below, agrees to pay same to seller or its assigns at its offices at the address shown above or at any other address which seller may direct in writing delivered to buyer. It is agreed that the contracts, whether one or more, existing between seller and buyer, having an unpaid balance of $_____(old balance), shall remain in full force and effect, that seller's security interest in the goods sold under them shall remain perfected, and that as to the contract evidenced by this instrument, buyer shall make payments in the amount and for the period set forth below until the total time balance as set forth has been paid. Upon a default in the contract evidenced by this instrument, the existing contract shall also be deemed to be in default:
Payable in _________ consecutive installments of $_____ each, except the last installment shall be the balance due.
First installment due _________[date].
2. Warranties. No representation or statements have been made by seller concerning the goods except as stated in this agreement, and no warranty, express or implied, by seller, arises apart from this writing. Buyer warrants that any property offered in trade for the goods is free from any lien, claim, incumbrance or security interest.
3. Fees. Buyer will pay all costs of filing this contract or any financing or termination statement with respect to the goods, and appoints seller buyer's attorney-in-fact to do whatever seller may deem necessary to perfect or continue perfected its security interest in the goods.
4. Retention of security interest. Until all installment payments, and all other amounts due under this agreement, have been paid, seller shall retain a security interest in the goods and any and all equipment, parts, accessories, attachments, additions and other goods, and all replacements of them, installed in, affixed to or used in connection with the goods and, if buyer sells or otherwise disposes of the goods in violation of the terms of this agreement, in the proceeds of such sale or disposition.
5. Insurance. Buyer will insure the goods against all hazards in form and amounts and with an insurer satisfactory to seller. If buyer fails to obtain insurance seller shall have the right to obtain it at buyer's expense (without waiver of any other remedy) and buyer assigns to seller all right to receive proceeds of insurance not exceeding the unpaid balance (including any costs of collection, attorney's fees or other costs actually incurred in connection with it) and directs any insurer to pay all proceeds directly to seller and authorizes seller to endorse any draft for proceeds. In the event of damage to the goods and payment of insurance, seller shall have the option of replacing the goods or applying the proceeds on any obligation secured by this agreement. Seller may upon default under this agreement, or default in the payment or performance of any obligation secured by this agreement, cancel any insurance on goods after repossession of them, or on that portion of the goods repossessed if less than all.
6. Maintenance. Buyer will keep the goods in good condition and free from liens and other security interests, will pay promptly all taxes and assessments upon them or with respect to their use, will not use the goods illegally or dispose of or incumber them, will not remove the goods from the premises to which they are delivered as stated on the face of this contract, without the prior written consent of seller and will not permit the goods to be fixtures, or to become accessions to other goods unless on the front page of this agreement it is indicated that the goods are to be attached to real estate in which case buyer agrees to furnish seller with a disclaimer or disclaimers, in form satisfactory to seller, signed by all persons having an interest in the real estate, of any interest in the goods which is prior to seller's interest.
7. Events of default. The occurrence of any of the following shall constitute a default under this agreement: (1) failure of buyer to perform any obligation or agreement specified in this agreement, or if any warranty or representation made under this agreement by buyer should prove to be materially incorrect; (2) the death of buyer, any cosigner or guarantor on any obligation secured by this agreement, or the dissolution, merger, consolidation or reorganization of any corporate buyer or corporate obligor on such obligation; (3) the institution of any proceeding in bankruptcy, receivership or insolvency against buyer; or against any obligor on any secured obligation or the institution by any party of action for attachment or similar process; (4) the issuance of execution process against any property of buyer or any such coobligor, or the entry of any judgment against buyer or any such coobligor, or any assignment for benefit of creditors or similar action adversely involving any such party; (5) any condemnation, levy, forfeiture or similar action against the goods or any part of them; (6) when seller shall in good faith and upon reasonable grounds believe that the prospect of performance of any obligation of buyer under this agreement, or of performance or payment of any obligation secured by this agreement, by buyer or any other obligor on them, is materially diminished; (7) the default by buyer under any other contract obligations, or installment sale security agreement between the parties to this security agreement.
8. Remedies on default. In the event of a default, or if seller or seller's assignee shall consider the payment of the balance of the installment payments insecure, seller shall have the right to: (1) obtain judgment for the amount of the installments delinquent under the contract plus interest at six % on such delinquent payments from due date and reasonable attorney's fees without prejudicing seller's right to subsequently obtain judgment for additional, or the balance of, the installments or to exercise other rights contained in this agreement or at its option, declare all unpaid installments and other moneys due or to become due under this contract immediately due and payable and to obtain judgment for the total amount of unpaid installments due plus interest of 6% on delinquent payments from due date and reasonable attorney's fees; (2) enter any premises and without breach of the peace take possession of the goods; and (3) exercise the rights on default of a secured party under the Uniform Commercial Code. Seller may require buyer to assemble the goods and make them available to seller at a place to be designated by seller which is reasonably convenient to seller and buyer. Seller shall have the right to take immediate possession of the goods wherever found, with or without legal process, and to sell or otherwise dispose of the goods. Unless the goods are perishable or threaten to decline speedily in value or are of a type customarily sold on a recognized market, seller will give buyer reasonable notice of the time and place of any public sale of the goods or the time after which any private sale or other intended disposition is to be made. The requirements of reasonable notice shall be met if such notice is mailed, postage prepaid, to the address of the buyer shown at the beginning of this contract or such other address of buyer as may from time to time be shown on seller's records, at least five days prior to such action. Buyer will pay any deficiency that may remain after exercise of such rights plus expenses of retaking, holding, preparing for sale, selling or the like, including seller's reasonable attorney's fees. All of seller's rights under this agreement are cumulative and no waiver of any default shall affect any later default.
9. Miscellaneous terms and provisions. (1) Loss or damage to the goods will not release buyer. (2) Repairs to the goods and equipment or accessories placed on the goods shall be at buyer's expense and shall constitute component parts of the goods, subject to the terms of this contract. (3) If any part of this contract is adjudged invalid, the remainder will not be invalidated by this. (4) Seller may assign this contract but buyer shall not. Seller's assignee shall have all of the rights, powers and remedies of seller but shall be subject to none of seller's obligations, and any right, remedy or authority conferred upon seller under this agreement shall upon assignment be deemed to be conferred upon seller's assignee, even though the term "seller" only is used in this agreement, and any notice to which seller is entitled shall be given to seller's assignee if buyer has notice of an assignment. (5) Buyer will not assert against any assignee of this contract any defense which buyer may have against seller. (6) If there be more than one signer of this contract, their obligations shall be joint and several and each specifically waive presentment or demand and agree that any extension or extensions of time of payment of this contract or any installment or part installment may be made before, at or after maturity by agreement with any one or more of the parties, and they waive any right which they may have to require the holder to proceed against any person. (7) This agreement will be governed by the laws of the State of _________, and all obligations of buyer shall bind h� heirs, executor, administrator or successors.
10. Warranty as to use. Buyer warrants that the goods are purchased for use primarily for personal, family or household purposes. If any of the goods described are now or are to become fixtures, the same are or will be affixed to the following described real estate: _________.
11. Exclusive statement of contract. This writing contains the full, final and exclusive statement of the contract between the parties and no agreement or warranty shall be binding on the seller unless expressly contained in it.
Executed in triplicate by buyer on the date written above, until the seller executes this contract it shall be considered an offer binding on buyer but not on seller. Upon execution of this contract by the seller by signature of the seller or seller's authorized representative this contract will be considered accepted by the seller. Buyer acknowledges receipt of a copy of this contract.
Witness the following signatures and seals:
Buyer _________
Buyer _________
Witness my hand and seal: _________ Company
By ________
1. Payment. Seller sells buyer the articles described above (goods) upon the terms set forth below. Buyer, given the choice of paying the net price set forth below or the time price in any installments as set forth below, agrees to pay same to seller or its assigns at its offices at the address shown above or at any other address which seller may direct in writing delivered to buyer. It is agreed that the contracts, whether one or more, existing between seller and buyer, having an unpaid balance of $_____(old balance), shall remain in full force and effect, that seller's security interest in the goods sold under them shall remain perfected, and that as to the contract evidenced by this instrument, buyer shall make payments in the amount and for the period set forth below until the total time balance as set forth has been paid. Upon a default in the contract evidenced by this instrument, the existing contract shall also be deemed to be in default:
Payable in _________ consecutive installments of $_____ each, except the last installment shall be the balance due.
First installment due _________[date].
2. Warranties. No representation or statements have been made by seller concerning the goods except as stated in this agreement, and no warranty, express or implied, by seller, arises apart from this writing. Buyer warrants that any property offered in trade for the goods is free from any lien, claim, incumbrance or security interest.
3. Fees. Buyer will pay all costs of filing this contract or any financing or termination statement with respect to the goods, and appoints seller buyer's attorney-in-fact to do whatever seller may deem necessary to perfect or continue perfected its security interest in the goods.
4. Retention of security interest. Until all installment payments, and all other amounts due under this agreement, have been paid, seller shall retain a security interest in the goods and any and all equipment, parts, accessories, attachments, additions and other goods, and all replacements of them, installed in, affixed to or used in connection with the goods and, if buyer sells or otherwise disposes of the goods in violation of the terms of this agreement, in the proceeds of such sale or disposition.
5. Insurance. Buyer will insure the goods against all hazards in form and amounts and with an insurer satisfactory to seller. If buyer fails to obtain insurance seller shall have the right to obtain it at buyer's expense (without waiver of any other remedy) and buyer assigns to seller all right to receive proceeds of insurance not exceeding the unpaid balance (including any costs of collection, attorney's fees or other costs actually incurred in connection with it) and directs any insurer to pay all proceeds directly to seller and authorizes seller to endorse any draft for proceeds. In the event of damage to the goods and payment of insurance, seller shall have the option of replacing the goods or applying the proceeds on any obligation secured by this agreement. Seller may upon default under this agreement, or default in the payment or performance of any obligation secured by this agreement, cancel any insurance on goods after repossession of them, or on that portion of the goods repossessed if less than all.
6. Maintenance. Buyer will keep the goods in good condition and free from liens and other security interests, will pay promptly all taxes and assessments upon them or with respect to their use, will not use the goods illegally or dispose of or incumber them, will not remove the goods from the premises to which they are delivered as stated on the face of this contract, without the prior written consent of seller and will not permit the goods to be fixtures, or to become accessions to other goods unless on the front page of this agreement it is indicated that the goods are to be attached to real estate in which case buyer agrees to furnish seller with a disclaimer or disclaimers, in form satisfactory to seller, signed by all persons having an interest in the real estate, of any interest in the goods which is prior to seller's interest.
7. Events of default. The occurrence of any of the following shall constitute a default under this agreement: (1) failure of buyer to perform any obligation or agreement specified in this agreement, or if any warranty or representation made under this agreement by buyer should prove to be materially incorrect; (2) the death of buyer, any cosigner or guarantor on any obligation secured by this agreement, or the dissolution, merger, consolidation or reorganization of any corporate buyer or corporate obligor on such obligation; (3) the institution of any proceeding in bankruptcy, receivership or insolvency against buyer; or against any obligor on any secured obligation or the institution by any party of action for attachment or similar process; (4) the issuance of execution process against any property of buyer or any such coobligor, or the entry of any judgment against buyer or any such coobligor, or any assignment for benefit of creditors or similar action adversely involving any such party; (5) any condemnation, levy, forfeiture or similar action against the goods or any part of them; (6) when seller shall in good faith and upon reasonable grounds believe that the prospect of performance of any obligation of buyer under this agreement, or of performance or payment of any obligation secured by this agreement, by buyer or any other obligor on them, is materially diminished; (7) the default by buyer under any other contract obligations, or installment sale security agreement between the parties to this security agreement.
8. Remedies on default. In the event of a default, or if seller or seller's assignee shall consider the payment of the balance of the installment payments insecure, seller shall have the right to: (1) obtain judgment for the amount of the installments delinquent under the contract plus interest at six % on such delinquent payments from due date and reasonable attorney's fees without prejudicing seller's right to subsequently obtain judgment for additional, or the balance of, the installments or to exercise other rights contained in this agreement or at its option, declare all unpaid installments and other moneys due or to become due under this contract immediately due and payable and to obtain judgment for the total amount of unpaid installments due plus interest of 6% on delinquent payments from due date and reasonable attorney's fees; (2) enter any premises and without breach of the peace take possession of the goods; and (3) exercise the rights on default of a secured party under the Uniform Commercial Code. Seller may require buyer to assemble the goods and make them available to seller at a place to be designated by seller which is reasonably convenient to seller and buyer. Seller shall have the right to take immediate possession of the goods wherever found, with or without legal process, and to sell or otherwise dispose of the goods. Unless the goods are perishable or threaten to decline speedily in value or are of a type customarily sold on a recognized market, seller will give buyer reasonable notice of the time and place of any public sale of the goods or the time after which any private sale or other intended disposition is to be made. The requirements of reasonable notice shall be met if such notice is mailed, postage prepaid, to the address of the buyer shown at the beginning of this contract or such other address of buyer as may from time to time be shown on seller's records, at least five days prior to such action. Buyer will pay any deficiency that may remain after exercise of such rights plus expenses of retaking, holding, preparing for sale, selling or the like, including seller's reasonable attorney's fees. All of seller's rights under this agreement are cumulative and no waiver of any default shall affect any later default.
9. Miscellaneous terms and provisions. (1) Loss or damage to the goods will not release buyer. (2) Repairs to the goods and equipment or accessories placed on the goods shall be at buyer's expense and shall constitute component parts of the goods, subject to the terms of this contract. (3) If any part of this contract is adjudged invalid, the remainder will not be invalidated by this. (4) Seller may assign this contract but buyer shall not. Seller's assignee shall have all of the rights, powers and remedies of seller but shall be subject to none of seller's obligations, and any right, remedy or authority conferred upon seller under this agreement shall upon assignment be deemed to be conferred upon seller's assignee, even though the term "seller" only is used in this agreement, and any notice to which seller is entitled shall be given to seller's assignee if buyer has notice of an assignment. (5) Buyer will not assert against any assignee of this contract any defense which buyer may have against seller. (6) If there be more than one signer of this contract, their obligations shall be joint and several and each specifically waive presentment or demand and agree that any extension or extensions of time of payment of this contract or any installment or part installment may be made before, at or after maturity by agreement with any one or more of the parties, and they waive any right which they may have to require the holder to proceed against any person. (7) This agreement will be governed by the laws of the State of _________, and all obligations of buyer shall bind h� heirs, executor, administrator or successors.
10. Warranty as to use. Buyer warrants that the goods are purchased for use primarily for personal, family or household purposes. If any of the goods described are now or are to become fixtures, the same are or will be affixed to the following described real estate: _________.
11. Exclusive statement of contract. This writing contains the full, final and exclusive statement of the contract between the parties and no agreement or warranty shall be binding on the seller unless expressly contained in it.
Executed in triplicate by buyer on the date written above, until the seller executes this contract it shall be considered an offer binding on buyer but not on seller. Upon execution of this contract by the seller by signature of the seller or seller's authorized representative this contract will be considered accepted by the seller. Buyer acknowledges receipt of a copy of this contract.
Witness the following signatures and seals:
Buyer _________
Buyer _________
Witness my hand and seal: _________ Company
By ________
Form: EXCLUSIVE RIGHT TO SELL
For and in consideration of your services to be rendered in listing for sale and in
undertaking to sell or find a purchaser for the property hereinafter described, the parties
understand and agree that this is an exclusive listing to sell the real estate located at:
_______________________________________________________________
_______________________________________________________________
_______________________________________________________________
together with the following improvements and fixtures:
_______________________________________________________________
_______________________________________________________________
_______________________________________________________________
The minimum selling price of the property shall be________________
dollars ($_______), to be payable on the following terms:
_______________________________________________________________
_______________________________________________________________
You are authorized to accept and hold a deposit in the amount of
______________________________________ dollars ($_______) as a deposit and to apply such deposit on the purchase price.
If said property is sold, traded or in any other way disposed of either by us or by
anyone else within the time specified in this listing, it is agreed to and understood that
you shall receive from the sale or trade of said property as your commission
____________________________ percent ( %) of the purchase price. Should said property be sold or traded within____ days
after expiration of this listing agreement to a purchaser with whom you have been
negotiating for the sale or trade of the property, the said commission shall be due and
payable on demand.
We agree to furnish a certificate of title showing a good and merchantable title of
record, and further agree to convey by good and sufficient warranty deed or guaranteed
title on payment in full.
The listing contract shall continue until midnight of ___________,
20____.
Date:___________________________________
_______________________________
Owner
_______________________________
Owner
I accept this listing and agree to act promptly and diligently to procure a buyer for
said property.
Date:________________________
_______________________________
Agent/Broker
undertaking to sell or find a purchaser for the property hereinafter described, the parties
understand and agree that this is an exclusive listing to sell the real estate located at:
_______________________________________________________________
_______________________________________________________________
_______________________________________________________________
together with the following improvements and fixtures:
_______________________________________________________________
_______________________________________________________________
_______________________________________________________________
The minimum selling price of the property shall be________________
dollars ($_______), to be payable on the following terms:
_______________________________________________________________
_______________________________________________________________
You are authorized to accept and hold a deposit in the amount of
______________________________________ dollars ($_______) as a deposit and to apply such deposit on the purchase price.
If said property is sold, traded or in any other way disposed of either by us or by
anyone else within the time specified in this listing, it is agreed to and understood that
you shall receive from the sale or trade of said property as your commission
____________________________ percent ( %) of the purchase price. Should said property be sold or traded within____ days
after expiration of this listing agreement to a purchaser with whom you have been
negotiating for the sale or trade of the property, the said commission shall be due and
payable on demand.
We agree to furnish a certificate of title showing a good and merchantable title of
record, and further agree to convey by good and sufficient warranty deed or guaranteed
title on payment in full.
The listing contract shall continue until midnight of ___________,
20____.
Date:___________________________________
_______________________________
Owner
_______________________________
Owner
I accept this listing and agree to act promptly and diligently to procure a buyer for
said property.
Date:________________________
_______________________________
Agent/Broker
Form: BILL OF SALE OF BUSINESS
For good and sufficient consideration, receipt of which is hereby acknowledged, the undersigned ___________________________ ("Seller") hereby sells, transfers and conveys to ___________________________("Buyer"):
1. All and singular, the goods and chattels, property and effects, listed in Schedule A annexed hereto, which is incorporated herein and made a part hereof; and
2. The whole of the good will of the ______________ business formerly operated by the undersigned which is the subject of this sale.
The undersigned warrants that said goods and chattels are free and clear of all encumbrances, that it has full right and title to sell the same, and that it will warrant and defend the same against the claims and demands of all persons. The undersigned hereby warrants and covenants that I shall not within _______ years of the date of this instrument engage in the business of ________________ within __________________.
Dated: ____________________________
_______________________________
Witness
_______________________________
Seller
1. All and singular, the goods and chattels, property and effects, listed in Schedule A annexed hereto, which is incorporated herein and made a part hereof; and
2. The whole of the good will of the ______________ business formerly operated by the undersigned which is the subject of this sale.
The undersigned warrants that said goods and chattels are free and clear of all encumbrances, that it has full right and title to sell the same, and that it will warrant and defend the same against the claims and demands of all persons. The undersigned hereby warrants and covenants that I shall not within _______ years of the date of this instrument engage in the business of ________________ within __________________.
Dated: ____________________________
_______________________________
Witness
_______________________________
Seller
Form: AGREEMENT TO SELL PERSONAL PROPERTY
AGREEMENT TO SELL PERSONAL PROPERTY
Purchase and Sell Agreement made by and between __________________ of _______________________(Seller), and _______________________________ of _______________________(Buyer).
Whereas, for good consideration the parties mutually agree that:
1. Seller agrees to sell, and Buyer agrees to buy the following described property:
2. Buyer agrees to pay to Seller and Seller agrees to accept as total purchase price the sum of $__________, payable as follows:
$________deposit herewith paid
$________balance payable on delivery by cash
$________bank per certified check
3. Seller warrants it has good and legal title to said property, full authority to sell said property, and that said property shall be sold by warranty bill of sale free and clear of all liens, encumbrances, liabilities and adverse claims of every nature and description whatsoever.
4. Said property is sold in "AS IS" condition, Seller disclaiming any warranty of merchantability, fitness or working order or condition of the property except that it shall be sold in its present condition, reasonable wear and tear expected.
5. The parties agree to transfer title on________________, 20____, at the address of the Seller.
6. This agreement shall be binding upon and inure to the benefit of the parties, their successors, assigns and personal representatives.
Signed this ______day of____________________, 20 ____.
______________________________ ______________________________
Witness Buyer
______________________________ ______________________________
Witness Seller
Purchase and Sell Agreement made by and between __________________ of _______________________(Seller), and _______________________________ of _______________________(Buyer).
Whereas, for good consideration the parties mutually agree that:
1. Seller agrees to sell, and Buyer agrees to buy the following described property:
2. Buyer agrees to pay to Seller and Seller agrees to accept as total purchase price the sum of $__________, payable as follows:
$________deposit herewith paid
$________balance payable on delivery by cash
$________bank per certified check
3. Seller warrants it has good and legal title to said property, full authority to sell said property, and that said property shall be sold by warranty bill of sale free and clear of all liens, encumbrances, liabilities and adverse claims of every nature and description whatsoever.
4. Said property is sold in "AS IS" condition, Seller disclaiming any warranty of merchantability, fitness or working order or condition of the property except that it shall be sold in its present condition, reasonable wear and tear expected.
5. The parties agree to transfer title on________________, 20____, at the address of the Seller.
6. This agreement shall be binding upon and inure to the benefit of the parties, their successors, assigns and personal representatives.
Signed this ______day of____________________, 20 ____.
______________________________ ______________________________
Witness Buyer
______________________________ ______________________________
Witness Seller
Form: Agreement to Sell Works of Art
Agreement to Sell Works of Art
The following constitutes the entire agreement with respect to the sale by ________________________________ [Buyer's full name] ("Buyer") of sculptures, drawings and graphics created by ________________________________ [Artist's full name] ("Artist"):
1. For a period of _________ years commencing on the date of this agreement, Buyer shall have the exclusive right, in any part of the world, to offer for sale and to authorize others to offer for sale, all items of art works created and owned by Artist. Artist shall initially deliver each such item of his work to Buyer at such location as may be designated by Buyer.
2. During the period of _________ years, Buyer shall have the exclusive right to arrange, and to authorize others to arrange, for the publication and/or sale, in any part of the world, of books and catalogues containing illustrated reproductions of the art work of Artist.
3. During the period of _________ years, Buyer shall arrange for exhibitions of Artist's works in the Cities of __________________, __________________ and such other places as the parties shall jointly determine. Buyer shall be responsible for all of the expenses of such exhibitions, including advertising and catalogue costs and insurance, and shall bear the entire cost of storing all items of Artist's work delivered to Buyer pursuant to this agreement.
4. The parties acknowledge that Artist has furnished to Buyer photographs of each item of Artist's works owned by Artist on the date of this agreement. The price at which Buyer shall offer each such item for sale shall not be less than the price set forth on the back of such photograph. The parties shall jointly determine the minimum sales price to be charged as to those art works to be created by Artist during the term of this agreement. Minimum prices may be changed from time to time in such manner as shall jointly be determined by the parties.
5. Upon the sale of any of the art works covered by this agreement, Buyer shall be reimbursed, from the actual net proceeds of sale, for any initial shipping cost advanced with respect to such item. In addition and as compensation for Buyer's services in effecting the sale of a particular work, Buyer shall be entitled to retain _____% of the balance of the net proceeds of the particular sale, as and for Buyer's commission for having effected such sale, with the remaining _________ percent of such balance, less any amounts otherwise due to Buyer under this agreement, to be paid to Artist on a quarterly basis.
6. This agreement shall be governed by and construed in accordance with the laws of the State of _________ and shall be binding upon and inure to the benefit of the respective executors, administrators, successors and assigns of the parties.
Dated _________.
Buyer:
________________________________
[Buyer's Signature]
________________________________
[Buyer's Printed Name]
Artist:
________________________________
[Artist's Signature]
________________________________
[Artist's Printed Name]
The following constitutes the entire agreement with respect to the sale by ________________________________ [Buyer's full name] ("Buyer") of sculptures, drawings and graphics created by ________________________________ [Artist's full name] ("Artist"):
1. For a period of _________ years commencing on the date of this agreement, Buyer shall have the exclusive right, in any part of the world, to offer for sale and to authorize others to offer for sale, all items of art works created and owned by Artist. Artist shall initially deliver each such item of his work to Buyer at such location as may be designated by Buyer.
2. During the period of _________ years, Buyer shall have the exclusive right to arrange, and to authorize others to arrange, for the publication and/or sale, in any part of the world, of books and catalogues containing illustrated reproductions of the art work of Artist.
3. During the period of _________ years, Buyer shall arrange for exhibitions of Artist's works in the Cities of __________________, __________________ and such other places as the parties shall jointly determine. Buyer shall be responsible for all of the expenses of such exhibitions, including advertising and catalogue costs and insurance, and shall bear the entire cost of storing all items of Artist's work delivered to Buyer pursuant to this agreement.
4. The parties acknowledge that Artist has furnished to Buyer photographs of each item of Artist's works owned by Artist on the date of this agreement. The price at which Buyer shall offer each such item for sale shall not be less than the price set forth on the back of such photograph. The parties shall jointly determine the minimum sales price to be charged as to those art works to be created by Artist during the term of this agreement. Minimum prices may be changed from time to time in such manner as shall jointly be determined by the parties.
5. Upon the sale of any of the art works covered by this agreement, Buyer shall be reimbursed, from the actual net proceeds of sale, for any initial shipping cost advanced with respect to such item. In addition and as compensation for Buyer's services in effecting the sale of a particular work, Buyer shall be entitled to retain _____% of the balance of the net proceeds of the particular sale, as and for Buyer's commission for having effected such sale, with the remaining _________ percent of such balance, less any amounts otherwise due to Buyer under this agreement, to be paid to Artist on a quarterly basis.
6. This agreement shall be governed by and construed in accordance with the laws of the State of _________ and shall be binding upon and inure to the benefit of the respective executors, administrators, successors and assigns of the parties.
Dated _________.
Buyer:
________________________________
[Buyer's Signature]
________________________________
[Buyer's Printed Name]
Artist:
________________________________
[Artist's Signature]
________________________________
[Artist's Printed Name]
Form: AGREEMENT TO SELL BUSINESS
AGREEMENT TO SELL BUSINESS
Agreement made this _________day of _________, 20__ by and between ____________________ and _____________________ (doing business as _____________________) of ________________________ ____________________ (hereinafter referred to as "Seller") and _________________________________ (hereinafter referred to as the "Buyer").
Whereas the Seller desires to sell and the Buyer desires to buy the business of a certain _______________________ now being operated at ____________________________ and known as ______________________ and all assets thereof as contained in Schedule "A" attached hereto, the parties hereto agree and covenant as follows:
1. The total purchase price for all fixtures, furnishings and equipment is $___________ Dollars payable as follows: (a) $____________ paid in cash; certified or bank checks, as a deposit upon execution of this Agreement, to be held by ________________________. (b) $___________ additional to be paid in cash, certified or bank checks, at the time of passing papers. (c) $_________ to be paid by a note of the Buyer to the Seller, bearing interest at the rate of _____ percent per annum with an option of the Buyer to prepay the entire outstanding obligation without penalty. Said note shall be secured by a chattel mortgage and financing statement covering the property to be sold hereunder, together with any and all other property acquired during the term of said note and placed in or within the premises known as __________________________ ____________________.
2. The property to be sold hereunder shall be conveyed by a standard form Bill of Sale, duly executed by the Seller.
3. The Seller promises and agrees to convey good, clear, and marketable title to all the property to be sold hereunder, the same to be free and clear of all liens and encumbrances. Full possession of said property will be delivered in the same condition that it is now, reasonable wear and tear expected.
4. Consummation of the sale, with payment by the Buyer of the balance of the down payment and the delivery by the Seller of a Bill of Sale, will take place on or before ______________, 20__.
5. The Seller may use the purchase money, or any portion thereof, to clear any encumbrances on the property transferred and in the event that documents reflecting discharge of said encumbrances are not available at the time of sale, the money needed to effectuate such discharges shall be held by the attorneys of the Buyer and Seller in escrow pending the discharges.
6. Until the delivery of the Bill of Sale, the Seller shall maintain insurance on said property in the amount that is presently insured.
7. Operating expenses of _____________________ including but not limited to rent, taxes, payroll and water shall be apportioned as of the date of the passing of papers and the net amount thereof shall be added to or deducted from, as the case may be, the proceeds due from the Buyer at the time of delivery of the Bill of Sale.
8. If the Buyer fails to fulfill his obligations herein, all deposits made hereunder by the Buyer shall be retained by the Seller as liquidated damages.
9. The Seller promises and agrees not to engage in the same type of business as the one being sold for_______ years from the time of passing, within a __________ radius of ___________________________.
10. A Broker's fee for professional services in the amount of _________________($________) Dollars is due from the Seller to_________, provided and on the conditions that papers pass.
11. The Seller agrees that this Agreement is contingent upon the following conditions: (a) Buyer obtaining a Lease on the said premises or that the existing Lease be assigned in writing to the Buyer. (b) Buyer obtaining the approval from the proper authorities (Town and State) of the transfer of all necessary licenses to the Buyer. (c) The premises shall be in the same condition, reasonable wear and tear expected, on the date of passing as they are currently in.
12. All of the terms, representations and warranties shall survive the closing. This Agreement shall bind and inure to the benefit of the Seller and Buyer and their respective heirs, executors, administrators, successors and assigns.
13. If this Agreement shall contain any term or provision which shall be invalid or against public policy or if the application of same is invalid or against public policy, then, the remainder of this Agreement shall not be affected thereby and shall remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be executed in triplicate on the day and year first above written.
SELLER:
________________________________________________________
BUYER:
________________________________________________________
BROKER:
________________________________________________________
Agreement made this _________day of _________, 20__ by and between ____________________ and _____________________ (doing business as _____________________) of ________________________ ____________________ (hereinafter referred to as "Seller") and _________________________________ (hereinafter referred to as the "Buyer").
Whereas the Seller desires to sell and the Buyer desires to buy the business of a certain _______________________ now being operated at ____________________________ and known as ______________________ and all assets thereof as contained in Schedule "A" attached hereto, the parties hereto agree and covenant as follows:
1. The total purchase price for all fixtures, furnishings and equipment is $___________ Dollars payable as follows: (a) $____________ paid in cash; certified or bank checks, as a deposit upon execution of this Agreement, to be held by ________________________. (b) $___________ additional to be paid in cash, certified or bank checks, at the time of passing papers. (c) $_________ to be paid by a note of the Buyer to the Seller, bearing interest at the rate of _____ percent per annum with an option of the Buyer to prepay the entire outstanding obligation without penalty. Said note shall be secured by a chattel mortgage and financing statement covering the property to be sold hereunder, together with any and all other property acquired during the term of said note and placed in or within the premises known as __________________________ ____________________.
2. The property to be sold hereunder shall be conveyed by a standard form Bill of Sale, duly executed by the Seller.
3. The Seller promises and agrees to convey good, clear, and marketable title to all the property to be sold hereunder, the same to be free and clear of all liens and encumbrances. Full possession of said property will be delivered in the same condition that it is now, reasonable wear and tear expected.
4. Consummation of the sale, with payment by the Buyer of the balance of the down payment and the delivery by the Seller of a Bill of Sale, will take place on or before ______________, 20__.
5. The Seller may use the purchase money, or any portion thereof, to clear any encumbrances on the property transferred and in the event that documents reflecting discharge of said encumbrances are not available at the time of sale, the money needed to effectuate such discharges shall be held by the attorneys of the Buyer and Seller in escrow pending the discharges.
6. Until the delivery of the Bill of Sale, the Seller shall maintain insurance on said property in the amount that is presently insured.
7. Operating expenses of _____________________ including but not limited to rent, taxes, payroll and water shall be apportioned as of the date of the passing of papers and the net amount thereof shall be added to or deducted from, as the case may be, the proceeds due from the Buyer at the time of delivery of the Bill of Sale.
8. If the Buyer fails to fulfill his obligations herein, all deposits made hereunder by the Buyer shall be retained by the Seller as liquidated damages.
9. The Seller promises and agrees not to engage in the same type of business as the one being sold for_______ years from the time of passing, within a __________ radius of ___________________________.
10. A Broker's fee for professional services in the amount of _________________($________) Dollars is due from the Seller to_________, provided and on the conditions that papers pass.
11. The Seller agrees that this Agreement is contingent upon the following conditions: (a) Buyer obtaining a Lease on the said premises or that the existing Lease be assigned in writing to the Buyer. (b) Buyer obtaining the approval from the proper authorities (Town and State) of the transfer of all necessary licenses to the Buyer. (c) The premises shall be in the same condition, reasonable wear and tear expected, on the date of passing as they are currently in.
12. All of the terms, representations and warranties shall survive the closing. This Agreement shall bind and inure to the benefit of the Seller and Buyer and their respective heirs, executors, administrators, successors and assigns.
13. If this Agreement shall contain any term or provision which shall be invalid or against public policy or if the application of same is invalid or against public policy, then, the remainder of this Agreement shall not be affected thereby and shall remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be executed in triplicate on the day and year first above written.
SELLER:
________________________________________________________
BUYER:
________________________________________________________
BROKER:
________________________________________________________
Living Will Declaration
LIVING WILL OF
_____________________________________
I, __________________________________________________, a resident of the City of ___________________, ________________ County, State of _____________, being of sound and disposing mind, memory and understanding, do hereby willfully and voluntarily make, publish and declare this to be my LIVING WILL, making known my desire that my life shall not be artificially prolonged under the circumstances set forth below, and do hereby declare:
l. This instrument is directed to my family, my physician(s), my attorney, my clergyman, any medical facility in whose care I happen to be, and to any individual who may become responsible for my health, welfare or affairs.
2. Death is as much a reality as birth, growth, maturity and old age. It is the one certainty of life. Let this statement stand as an expression of my wishes now that I am still of sound mind, for the time when I may no longer take part in decisions for my own future.
3. If at any time I should have a terminal condition and my attending physician has determined that there can be no recovery from such condition and my death is imminent, where the application of life-prolonging procedures and "heroic measures" would serve only to artificially prolong the dying process, I direct that such procedures be withheld or withdrawn, and that I be permitted to die naturally. I do not fear death itself as much as the indignities of deterioration, dependence and hopeless pain. I therefore ask that medication be mercifully administered to me and that any medical procedures be performed on me which are deemed necessary to provide me with comfort, care or to alleviate pain.
4. In the absence of my ability to give directions regarding the use of such life-prolonging procedures, it is my intention that this declaration shall be honored by my family and physician as the final expression of my legal right to refuse medical or surgical treatment and accept the consequences for such refusal.
5. In the event that I am diagnosed as comatose, incompetent, or otherwise mentally or physically incapable of communication, I appoint ______________________________ to make binding decisions concerning my medical treatment.
6. If I have been diagnosed as pregnant and that diagnosis is known to my physician, this declaration shall have no force or effect during the course of my pregnancy.
7. I understand the full import of this declaration and I am emotionally and mentally competent to make this declaration. I hope you, who care for me, will feel morally bound to follow its mandate. I recognize that this appears to place a heavy responsibility upon you, but it is with the intention of relieving you of such responsibility and of placing it upon myself, in accordance with my strong convictions, that this statement is made.
IN WITNESS WHEREOF, I have hereunto subscribed my name and affixed my seal at _______________, _______________, this _____ day of ____________, 20____, in the presence of the subscribing witnesses whom I have requested to become attesting witnesses hereto.
___________________________
Declarant
The declarant is known to me and I believe him/her to be of sound mind.
____________________________ _____________________________
Witness Address
____________________________ _____________________________
Witness Address
Subscribed and acknowledged, before me by___________________ __________________________, and subscribed and sworn to before the witnesses, on the _______day of ____________________, 20___.
____________________________ (SEAL) NOTARY PUBLIC
State of ___________________
My Commission Expires: ____________________________
Copies of this instrument have been given to:
Receipt and acknowledged & date:
_____________________________________
I, __________________________________________________, a resident of the City of ___________________, ________________ County, State of _____________, being of sound and disposing mind, memory and understanding, do hereby willfully and voluntarily make, publish and declare this to be my LIVING WILL, making known my desire that my life shall not be artificially prolonged under the circumstances set forth below, and do hereby declare:
l. This instrument is directed to my family, my physician(s), my attorney, my clergyman, any medical facility in whose care I happen to be, and to any individual who may become responsible for my health, welfare or affairs.
2. Death is as much a reality as birth, growth, maturity and old age. It is the one certainty of life. Let this statement stand as an expression of my wishes now that I am still of sound mind, for the time when I may no longer take part in decisions for my own future.
3. If at any time I should have a terminal condition and my attending physician has determined that there can be no recovery from such condition and my death is imminent, where the application of life-prolonging procedures and "heroic measures" would serve only to artificially prolong the dying process, I direct that such procedures be withheld or withdrawn, and that I be permitted to die naturally. I do not fear death itself as much as the indignities of deterioration, dependence and hopeless pain. I therefore ask that medication be mercifully administered to me and that any medical procedures be performed on me which are deemed necessary to provide me with comfort, care or to alleviate pain.
4. In the absence of my ability to give directions regarding the use of such life-prolonging procedures, it is my intention that this declaration shall be honored by my family and physician as the final expression of my legal right to refuse medical or surgical treatment and accept the consequences for such refusal.
5. In the event that I am diagnosed as comatose, incompetent, or otherwise mentally or physically incapable of communication, I appoint ______________________________ to make binding decisions concerning my medical treatment.
6. If I have been diagnosed as pregnant and that diagnosis is known to my physician, this declaration shall have no force or effect during the course of my pregnancy.
7. I understand the full import of this declaration and I am emotionally and mentally competent to make this declaration. I hope you, who care for me, will feel morally bound to follow its mandate. I recognize that this appears to place a heavy responsibility upon you, but it is with the intention of relieving you of such responsibility and of placing it upon myself, in accordance with my strong convictions, that this statement is made.
IN WITNESS WHEREOF, I have hereunto subscribed my name and affixed my seal at _______________, _______________, this _____ day of ____________, 20____, in the presence of the subscribing witnesses whom I have requested to become attesting witnesses hereto.
___________________________
Declarant
The declarant is known to me and I believe him/her to be of sound mind.
____________________________ _____________________________
Witness Address
____________________________ _____________________________
Witness Address
Subscribed and acknowledged, before me by___________________ __________________________, and subscribed and sworn to before the witnesses, on the _______day of ____________________, 20___.
____________________________ (SEAL) NOTARY PUBLIC
State of ___________________
My Commission Expires: ____________________________
Copies of this instrument have been given to:
Receipt and acknowledged & date:
Tuesday, December 12, 2006
How Backdating Helped Executives Cut Taxes
New evidence suggests that corporate executives may have found another way to manipulate their stock options, this time to cheat on their income taxes.
In a paper that began circulating in recent days, a Securities and Exchange Commission economist concludes there is strong statistical evidence that executives manipulated the exercise dates of their options as part of a tax dodge. And a review of corporate filings turns up some companies with startling options-exercise patterns.
The new information could open another front in the options-backdating scandal. Backdating already has sparked the broadest corporate-fraud probe in decades, with more than 130 companies under investigation by federal authorities. So far, attention has focused on the practice of retroactively selecting favorable dates to grant options. The new wrinkle involves rigging the dates on which options are exercised, sometimes years after they're granted.
The tax dodge related to options, however, almost certainly involves fewer executives than are caught up in the furor over the backdating of grants.
The reason it can be tempting to backdate the exercise of options lies in the way the Internal Revenue Service treats different types of income for tax purposes. Options, a common part of executive pay packages, give the recipient the right to buy a company's stock at a fixed price in the future. That price, known as the strike price, is usually the stock's market price on the day the options were granted.
About three-quarters of the time, executives immediately sell the shares they buy when they exercise options. Under IRS rules that typically apply, those executives must pay ordinary income tax, as well as payroll taxes, on the difference between the stock's value on the date the option was exercised and the option's strike price. The highest federal marginal income tax rate is 35%.
But for a variety of reasons, including corporate rules that require top managers to own a certain amount of stock, some executives don't sell immediately. Those who hold the shares for at least a year pay a much lower capital-gains tax -- currently 15% -- on any profit between the time they exercise and when they eventually dispose of the shares. That lower rate gives the executive an incentive to exercise the options at a relative low point for the stock: The move reduces the amount of money that would be owed at the ordinary income tax rate, and shifts the difference so it is potentially taxed at the much-lower capital gains rate.
Consider an executive who holds options on 100,000 shares with a strike price of $10. If he exercises and sells when the price is $20, he realizes $1 million in income and must pay $350,000 in income taxes.
If he instead can claim an exercise price of $16, he lowers his income tax to $210,000. If he then sells a year later and the stock is at the same price of $20, he pays $60,000 in capital-gains levies, for a total tax bite of $270,000. In other words, he has the same $1 million gain but saves $80,000 in taxes. The problem arises if the executive misrepresents when the exercise occurred to claim a lower exercise price.
Determining which executives or companies might be involved is difficult, and it's impossible to know what information they may have included in their tax returns. But some executives have exhibited unusual timing in their options exercises.
At Maxim Integrated Products Inc., a Sunnyvale, Calif., chip maker, chief executive John F. Gifford exercised options and held shares seven times between 1997 and 2002, according to regulatory filings and insider-trading data from Thomson Financial. In all but one case, Mr. Gifford's reported exercise date was the very day the stock reached its lowest closing price of the month. After the Sarbanes-Oxley corporate-reform law took effect in 2002, drastically reducing the opportunity to backdate by tightening reporting requirements, his fortunate timing vanished.
Maxim is facing investigations by the SEC and federal prosecutors in California over its option-granting practices. A special committee of directors is also probing the matter.
Chuck Rigg, a Maxim vice president, said the company is "looking into" questions about Mr. Gifford's options exercises, but said initial data don't indicate any problems. Mr. Rigg added that the company used an outside broker to handle options exercises. "There's not a way you can backdate that," he said. Mr. Gifford didn't respond to requests for comment.
At Royal Gold Inc., a Denver-based mining concern, Chairman Stanley Dempsey exercised options and held shares 12 times between 1997 and 2001, according to regulatory filings and Thomson data. Ten of those trades ostensibly came on a day when the stock was equal to its monthly low. The stock was thinly traded, and in some cases, there were several days each month when the stock closed at the same low price.
Academics have looked before at the issue of option-exercise timing, but studies were largely inconclusive. However, new research by SEC economist David Cicero suggests that some executives may have cut their income-tax burden by pretending their options were exercised on a prior day, when the company's stock was trading at a lower price. That would likely be a fraud under federal tax laws.
"The Cicero paper appears to be very well done," said David Yermack, a finance professor at New York University's Stern School of Business who has studied options issues. "It's strong evidence that executives were manipulating their exercise dates, similar to the way they were manipulating their award dates."
Mr. Cicero, who is also a doctoral candidate at the University of Georgia, examined more than 40,000 transactions between 1996 and 2005, and zeroed in on the subset of exercises in which the executive exercised and held on to the resulting shares.
The patterns he found in that subset are stark: Before the tightening of reporting requirements in 2002, shares on average fell 1.3% in the 20 trading days prior to the reported exercise date. In the next 20 days, they rose 4.8%. In other words, on average, executives were exercising options during a noticeable trough in the market price. After Sarbanes-Oxley, the phenomenon vanished.
Mr. Cicero wrote that the "striking stock price pattern" is "highly suggestive" of some type of timing, and said "backdating is difficult to rule out." Mr. Cicero didn't name any individual executives or companies.
He stressed in the paper, which is in draft form, that the views were his own, not those of the SEC.
An SEC spokesman, John Heine, declined to comment on the Cicero study. But he noted that the agency's enforcement director, Linda Thomsen, testified in a U.S. Senate hearing in September that the SEC is investigating exercise backdating as well as backdating of option grants.
Mr. Yermack said he also has been studying the issue, along with Erik Lie of the University of Iowa and Randall Heron, of the University of Indiana. Messrs. Lie and Heron are widely credited with the first academic research that suggested backdating of option grants could be widespread.
Although preliminary, their new research found that 13% of the exercises by CEOs who followed an "exercise-and-hold" strategy and didn't immediately report the actions to the SEC came at their stock's lowest price of the month. That percentage is nearly three times as great as would be expected if CEOs were exercising on random dates, Mr. Yermack said, and is highly suggestive that some were backdating exercises to avoid taxes.
The team of three professors also found that the phenomenon greatly diminished after Sarbanes-Oxley, which required executives to report option exercises to the SEC within two days. Before that, they had until the 10th day of the next month to report, which critics say provided a wide enough window to allow backdating to occur. The findings of a potential new options-fraud maneuver come even as Sarbanes-Oxley is coming under attack as being too harsh.
The phenomenon of option-exercise manipulation isn't new. An executive of Symbol Technologies Inc. pleaded guilty to tax-fraud charges in 2004 in connection with the practice, and Mercury Interactive Corp. has said former executives engaged in it. But it has largely remained under the radar as the scandal over option-grant backdating has snared headlines.
Alan L. Dye, a securities attorney at Hogan & Hartson LLP in Washington, said there are scant external checks to prevent backdating if an executive exercises an option and doesn't immediately sell the stock in the open market. "All the documentation is internal paperwork," he said. "Like any internal paperwork, unless good controls are in place, they can be misdated."
Michael D. Webb, the former CEO of EPIX Pharmaceuticals Inc., exercised options and held shares on 11 occasions between 1997 and 2002, according to filings and Thomson data. On six of those occasions -- including the last five in a row -- his reported exercise date corresponded to the lowest closing price of the month. The other five dates were also relatively favorable: Two on the second-lowest closing price of the month, and none any worse than the seventh-lowest.
Mr. Webb left EPIX, which is based in Cambridge, Mass., last year. In an interview, he said he wouldn't be able to answer any questions about his options timing without consulting transaction records, which he said he didn't have available. He declined to discuss how EPIX handled option exercises. A spokeswoman for EPIX declined to comment, citing "significant changes in management" that made it difficult to research past events.
In a paper that began circulating in recent days, a Securities and Exchange Commission economist concludes there is strong statistical evidence that executives manipulated the exercise dates of their options as part of a tax dodge. And a review of corporate filings turns up some companies with startling options-exercise patterns.
The new information could open another front in the options-backdating scandal. Backdating already has sparked the broadest corporate-fraud probe in decades, with more than 130 companies under investigation by federal authorities. So far, attention has focused on the practice of retroactively selecting favorable dates to grant options. The new wrinkle involves rigging the dates on which options are exercised, sometimes years after they're granted.
The tax dodge related to options, however, almost certainly involves fewer executives than are caught up in the furor over the backdating of grants.
The reason it can be tempting to backdate the exercise of options lies in the way the Internal Revenue Service treats different types of income for tax purposes. Options, a common part of executive pay packages, give the recipient the right to buy a company's stock at a fixed price in the future. That price, known as the strike price, is usually the stock's market price on the day the options were granted.
About three-quarters of the time, executives immediately sell the shares they buy when they exercise options. Under IRS rules that typically apply, those executives must pay ordinary income tax, as well as payroll taxes, on the difference between the stock's value on the date the option was exercised and the option's strike price. The highest federal marginal income tax rate is 35%.
But for a variety of reasons, including corporate rules that require top managers to own a certain amount of stock, some executives don't sell immediately. Those who hold the shares for at least a year pay a much lower capital-gains tax -- currently 15% -- on any profit between the time they exercise and when they eventually dispose of the shares. That lower rate gives the executive an incentive to exercise the options at a relative low point for the stock: The move reduces the amount of money that would be owed at the ordinary income tax rate, and shifts the difference so it is potentially taxed at the much-lower capital gains rate.
Consider an executive who holds options on 100,000 shares with a strike price of $10. If he exercises and sells when the price is $20, he realizes $1 million in income and must pay $350,000 in income taxes.
If he instead can claim an exercise price of $16, he lowers his income tax to $210,000. If he then sells a year later and the stock is at the same price of $20, he pays $60,000 in capital-gains levies, for a total tax bite of $270,000. In other words, he has the same $1 million gain but saves $80,000 in taxes. The problem arises if the executive misrepresents when the exercise occurred to claim a lower exercise price.
Determining which executives or companies might be involved is difficult, and it's impossible to know what information they may have included in their tax returns. But some executives have exhibited unusual timing in their options exercises.
At Maxim Integrated Products Inc., a Sunnyvale, Calif., chip maker, chief executive John F. Gifford exercised options and held shares seven times between 1997 and 2002, according to regulatory filings and insider-trading data from Thomson Financial. In all but one case, Mr. Gifford's reported exercise date was the very day the stock reached its lowest closing price of the month. After the Sarbanes-Oxley corporate-reform law took effect in 2002, drastically reducing the opportunity to backdate by tightening reporting requirements, his fortunate timing vanished.
Maxim is facing investigations by the SEC and federal prosecutors in California over its option-granting practices. A special committee of directors is also probing the matter.
Chuck Rigg, a Maxim vice president, said the company is "looking into" questions about Mr. Gifford's options exercises, but said initial data don't indicate any problems. Mr. Rigg added that the company used an outside broker to handle options exercises. "There's not a way you can backdate that," he said. Mr. Gifford didn't respond to requests for comment.
At Royal Gold Inc., a Denver-based mining concern, Chairman Stanley Dempsey exercised options and held shares 12 times between 1997 and 2001, according to regulatory filings and Thomson data. Ten of those trades ostensibly came on a day when the stock was equal to its monthly low. The stock was thinly traded, and in some cases, there were several days each month when the stock closed at the same low price.
Academics have looked before at the issue of option-exercise timing, but studies were largely inconclusive. However, new research by SEC economist David Cicero suggests that some executives may have cut their income-tax burden by pretending their options were exercised on a prior day, when the company's stock was trading at a lower price. That would likely be a fraud under federal tax laws.
"The Cicero paper appears to be very well done," said David Yermack, a finance professor at New York University's Stern School of Business who has studied options issues. "It's strong evidence that executives were manipulating their exercise dates, similar to the way they were manipulating their award dates."
Mr. Cicero, who is also a doctoral candidate at the University of Georgia, examined more than 40,000 transactions between 1996 and 2005, and zeroed in on the subset of exercises in which the executive exercised and held on to the resulting shares.
The patterns he found in that subset are stark: Before the tightening of reporting requirements in 2002, shares on average fell 1.3% in the 20 trading days prior to the reported exercise date. In the next 20 days, they rose 4.8%. In other words, on average, executives were exercising options during a noticeable trough in the market price. After Sarbanes-Oxley, the phenomenon vanished.
Mr. Cicero wrote that the "striking stock price pattern" is "highly suggestive" of some type of timing, and said "backdating is difficult to rule out." Mr. Cicero didn't name any individual executives or companies.
He stressed in the paper, which is in draft form, that the views were his own, not those of the SEC.
An SEC spokesman, John Heine, declined to comment on the Cicero study. But he noted that the agency's enforcement director, Linda Thomsen, testified in a U.S. Senate hearing in September that the SEC is investigating exercise backdating as well as backdating of option grants.
Mr. Yermack said he also has been studying the issue, along with Erik Lie of the University of Iowa and Randall Heron, of the University of Indiana. Messrs. Lie and Heron are widely credited with the first academic research that suggested backdating of option grants could be widespread.
Although preliminary, their new research found that 13% of the exercises by CEOs who followed an "exercise-and-hold" strategy and didn't immediately report the actions to the SEC came at their stock's lowest price of the month. That percentage is nearly three times as great as would be expected if CEOs were exercising on random dates, Mr. Yermack said, and is highly suggestive that some were backdating exercises to avoid taxes.
The team of three professors also found that the phenomenon greatly diminished after Sarbanes-Oxley, which required executives to report option exercises to the SEC within two days. Before that, they had until the 10th day of the next month to report, which critics say provided a wide enough window to allow backdating to occur. The findings of a potential new options-fraud maneuver come even as Sarbanes-Oxley is coming under attack as being too harsh.
The phenomenon of option-exercise manipulation isn't new. An executive of Symbol Technologies Inc. pleaded guilty to tax-fraud charges in 2004 in connection with the practice, and Mercury Interactive Corp. has said former executives engaged in it. But it has largely remained under the radar as the scandal over option-grant backdating has snared headlines.
Alan L. Dye, a securities attorney at Hogan & Hartson LLP in Washington, said there are scant external checks to prevent backdating if an executive exercises an option and doesn't immediately sell the stock in the open market. "All the documentation is internal paperwork," he said. "Like any internal paperwork, unless good controls are in place, they can be misdated."
Michael D. Webb, the former CEO of EPIX Pharmaceuticals Inc., exercised options and held shares on 11 occasions between 1997 and 2002, according to filings and Thomson data. On six of those occasions -- including the last five in a row -- his reported exercise date corresponded to the lowest closing price of the month. The other five dates were also relatively favorable: Two on the second-lowest closing price of the month, and none any worse than the seventh-lowest.
Mr. Webb left EPIX, which is based in Cambridge, Mass., last year. In an interview, he said he wouldn't be able to answer any questions about his options timing without consulting transaction records, which he said he didn't have available. He declined to discuss how EPIX handled option exercises. A spokeswoman for EPIX declined to comment, citing "significant changes in management" that made it difficult to research past events.
Monday, December 11, 2006
Medical Malpractice basics
Medical malpractice insurance covers doctors and other professionals in the medical field for liability claims arising from their treatment of patients.
The cost of medical malpractice insurance began to rise at the beginning of this decade, after a period of essentially flat prices. Rate increases were precipitated in part by the growing size of claims, particularly in urban areas. Among the other factors driving up prices was a reduced supply of available coverage as several major insurers exited the medical malpractice business because of the difficulty of making a profit.
New research suggests that premium increases may be moderating but for any turnaround to take root significant reforms in the delivery of medical care and in the liability system need to occur, industry observers say.
Cost of Claims: Fewer medical malpractice claims are being filed but the dollar amount of each claim is steadily increasing. Aon, a major insurance broker, has released its Hospital Professional Liability and Physician Liability 2006 Benchmark Analysis. The major finding of this year’s analysis, which measured over 47,700 claims representing more than $4.4 billion of incurred losses, was that the overall frequency of medical malpractice claims has not increased for the second consecutive year. While claim frequency is stabilizing, according to the study, the average size (severity) of malpractice claims continues to increase at a rate of 6 percent. However, the average amount paid to indemnify claimants is increasing at a rate of only 3 percent, while amounts paid to defend against liability claims are growing at 17 percent as hospitals invest in claims management.
A recent Conning Research & Consulting Inc. study, "New Opportunities Emerging? Or the Eye of the Hurricane?" predicts that the medical malpractice insurance sector may become profitable in 2006 for the first time in several years. The expected turnaround of the situation is due to a series of rate increases over the past four years that have allowed insurers to catch up with losses, the study says. Tort reform, particularly caps on noneconomic damages at the state level, is also playing a role in the turnaround.
The financial results of medical malpractice insurers show the crisis in medical malpractice insurance is lessening as premiums reach acceptable levels relative to costs. According to the National Underwriter Data Services, the medical malpractice combined ratio, a measure of profitability, was 100.1 in 2005. This means that in 2005 for every medical malpractice premium dollar collected, insurers payed out a little over one dollar in claims and expenses. This represents a significant drop from 2003, when the combined ratio was 138.8, and from the five previous years.
Medical Errors: Confirming the importance of reducing medical errors as part of an overall strategy for lowering medical malpractice claims costs, a study by the Missouri Insurance Department found that the leading grounds for malpractice awards in the state in 2004 were medical errors in diagnoses and surgery. At the end of July 2005, Congress passed legislation that would create a network for reporting and analyzing medical errors. Reporting of mistakes by hospitals would be voluntary, the information would be confidential and information could not be used in medical malpractice cases. There are currently 23 similar state programs, all of them but one with mandatory reporting.
In January 2005 experts commissioned by the Bush Administration to study medical malpractice litigation said state authorities should do a better job disciplining incompetent doctors. They said the public needed to be protected against substandard practice by physicians and that improved policing of medical treatment would decrease the number of malpractice lawsuits, adding that state medical boards often have insufficient resources to handle the thousands of complaints they receive each year and that the process of removing the license of an incompetent doctor is often long and costly.
Conning says in its recent study that for any improvement to take root, reforms on several levels must take place, including judicial reform that would more clearly link compensation with avoidable errors, government support for a national response to the cost of medical errors, state and local support for more uniform model laws and regulations, and the development by the health care and health insurance industries of incentives to reduce avoidable errors.
Tort Reform Initiatives: On May 8, 2006 Congress voted against two measures to limit jury awards in medical malpractice lawsuits sponsored by Senate Republicans. The major bill was based on a Texas law passed a few years ago that supporters say has improved the medical malpractice environment greatly in that state. Proponents of the Texas reform claim it has caused insurance premiums to decline significantly and brought new doctors to the state. S.22 would have set a $250,000 cap on noneconomic damages for individual health care providers involved in malpractice claims, a $500,000 cap when more than one provider is involved and a $750,000 total cap. The vote represents the fourth time in the past three years that the Senate has rejected Republican-sponsored legislation involving medical malpractice.
The President has been urging Congress to pass a more restrictive and comprehensive medical malpractice reform bill that was approved by the House but defeated by the Senate last year. That bill would have limited noneconomic damage awards to $250,000, limited punitive damage awards, placed limits on the time allowed to injured patients to file a lawsuit and established a fee schedule for lawyers' contingency fees. A provision would also have provided liability protection for pharmaceutical firms.
An April 2006 poll conducted by Quorum for the Health Coalition on Liability and Access found that 75 percent of Americans want their elected representatives to pass comprehensive medical liability reform and 76 percent of the people surveyed favor placing reasonable limits on noneconomic damages.
In late March 2006 Wisconsin Governor Jim Doyle signed into law a medical malpractice liability bill that caps noneconomic damage awards at $750,000. The state supreme court struck down an earlier cap in July 2005, finding that those caps were arbitrary and unconstitutional.
In early March 2006 Washington State Gov. Chris Gregoire signed into law a measure that, among other things, will allow doctors to apologize for medical mistakes they have made without allowing the admission to be used against them in court. It gives patients eight years to sue health care providers for malpractice. The measure also requires prior approval for medical malpractice insurance rates and stricter reporting of closed claim data and underwriting standards. The bill does not address caps on noneconomic damages or joint and several liability issues.
In 2005 three states — Georgia, Illinois and South Carolina — passed laws capping medical malpractice noneconomic damage awards and now some 25 states have such legislation on the books. However, also last year the Supreme Court of Wisconsin ruled that the state’s 10-year old law limiting noneconomic awards was unconstitutional. Other challenges are underway or being considered in Florida, Ohio and Illinois.
In New Jersey a program intended to address the escalating cost and lack of availability of medical malpractice insurance is being implemented. In October 2005 the New Jersey Medical Malpractice Insurance Premium Assistance Fund began to distribute subsidies to doctors in specialties with the highest medical malpractice insurance premiums. About 1,200 neurosurgeons, obstetricians and radiologists who read mammograms in the state will each receive about $11,000.
The American Medical Association (AMA) maintains a list of states it considers to be in a medical malpractice liability crisis. In May 2005 the AMA removed Texas from the list. The association pointed to a decline in medical malpractice claims and improved physician recruitment and retention in the wake of the state's 2003 medical malpractice tort reform as reasons for the action. At the same time, the AMA added Rhode Island to the list. It cited soaring jury verdicts that are driving medical liability insurance premiums out of the reach of many doctors. State surveys show that as a result of increasing medical liability costs, 49 percent of doctors in Rhode Island have discontinued or are considering discontinuing certain services and 48 percent are considering leaving the state or giving up clinical practice. With the one subtraction and one addition, the AMA's list continues to include 20 states.
Jury Awards and Settlements: The most recent research from Jury Verdict Research shows that after two years of median medical malpractice jury awards holding steady at about $1,000,000, in 2004 the median rose slightly to $1,045,000. The average award in 2004 rose from about $4.1 million in 2003 to $4.8 million in 2004. Settlements too have shown a steady increase, from a median of $300,000 in 1998 to $1,000,000 in 2004.
Costs to the Public: In March 2006 Towers Perrin released its U.S. Tort Costs: 2005 Update. The study found that over the 29 years since 1975, when medical malpractice insurance data were first separated out from other types of liability, medical malpractice cost increases have outpaced other tort areas, rising at an average of 11.7 percent a year, compared with 9.0 percent for all other tort costs. In 2004 medical malpractice costs totaled over $28.7 billion, up from about $26.5 billion the previous year.
A February 2006 study, prepared by PricewaterhouseCoopers for America’s Health Insurance Plans, examined the factors contributing to rising health care costs and analyzed where the health care dollar goes. It found that medical liability costs and defensive medicine account for 10 percent of medical care costs. Defensive medicine is when doctors order more tests, prescribe more medication and make more referrals than they believe are necessary to protect themselves from being accused of negligence. The study, “The Factors Fueling Rising Healthcare Costs 2006,” also estimates that health insurance premiums rose 8.8 percent between 2004 and 2005.
Proposals to Make Medical Malpractice Liability Insurance More Affordable: Aside from more effective disciplining of incompetent doctors by state authorities, a host of other solutions to reduce the cost of medical malpractice liability insurance have been suggested. Here is an overview of some of them:
(1) Continue efforts to expand the number of states that have pretrial screening panels: Currently about 30 states have such panels.
(2) Emphasize risk management: The effectiveness of risk management measures such as developing practice standards is exemplified by the success of steps taken by anesthesiologists. After identifying the cause of most claims and establishing standards to avoid them in the 1980s, the specialty saw a significant drop in medical malpractice claims and awards and a corresponding drop in the cost of medical malpractice insurance. Other risk management proposals include requiring doctors to study medical malpractice prevention as part of their licensing requirements (Massachusetts has such a program in force); increasing the number of states that require mandatory reporting of medical errors by health care facilities; and helping doctors invest in new health information technology such as electronic health records, electronic prescribing and experimental safety software.
(3) Take action against the small proportion of doctors with multiple judgments against them and who drive up the cost of insurance for all: In Florida, where a constitutional amendment that that would take away medical licenses from those with three or more medical malpractice judgments against them has been proposed, a study found that about 7 percent of the state's practicing doctors would be affected.
(4) Form a Captive or Risk Retention Group (RRG): Captives and RRGs are part of what is known as the alternative insurance market. Captives are a special type of insurance company set up by a parent company, trade association or group of companies to insure the risks of its owner or owners. RRGs are groups in which entities in a common industry join together to provide members with liability insurance.
(5) Create special courts of law to handle medical malpractice cases: Several states are weighing this option, including Illinois, Maryland, Massachusetts and Pennsylvania. A federal bill, the Medical Liability Procedural Reform Act of 2005, authorizing funding to states creating a pilot program of health courts, has also been introduced.
BACKGROUND
Brief History: The insurance industry tends to be cyclical. The medical malpractice insurance segment experienced a period of crisis in the early 1970s, when several private insurers left the market because of rising claims and inadequate rates. The exodus of capacity resulted in an availability crisis. Over the next 15 years, various attempts were made to ease the explosion in claims costs — tort reform, increased diagnostic testing, improved peer review, and increased communication between doctors and patients. These efforts appear to have had a positive impact. The number of claims dropped. However, the size of claims — the dollar amount — has continued to grow, although initially not at the fast pace reported earlier in the decade.
Aggressive campaigns to reform state laws governing medical liability lawsuits began in the 1970s. Every state except West Virginia passed reforms. New Hampshire's entire reform act was subsequently struck down as unconstitutional by its Supreme Court, but Indiana's, which was the most comprehensive in the nation when it went into effect in 1975, has been found constitutional in all challenges and has helped to keep physicians' premiums down in that state. California's Medical Injury Compensation Reform Act (MICRA), also enacted in 1975, which caps noneconomic damages and modifies the collateral source rule, is also considered a model law, see below.
Responding to the problem of availability, physicians formed doctor-owned malpractice insurance companies to provide coverage. These companies now write about half of all the medical malpractice insurance in the nation. Since these new companies had not experienced any losses, they could initially charge much lower rates. Later they suffered the fate of their private insurer predecessors, having to pay claims of increasing frequency and size as the patients of the doctors insured filed malpractice claims. This, in turn, necessitated charging higher insurance rates.
Reasons for the increased incidence of malpractice claims are not entirely clear, but several contributing factors have been suggested. In addition to the fact that people became more litigious than in the past, the crisis of the 1970s, which was extensively reported by the media, may have made people more aware of the possibility of suing for damages. Other factors were the loss of an intimate relationship between families and their doctors and the use of medical experts to testify in malpractice cases. Physicians have also accused lawyers of being excessively eager to bring malpractice suits because of the high fees the lawyers can collect when their clients win.
More recently, there has been a rise in public distrust of the medical profession and publicity about the number of medical errors which has led the public to believe standards are declining when in fact the reverse is true. In addition, changes in the judicial environment are increasing costs. It is easier to litigate, to find counsel and build a case using information on the Internet, for example. Some industry observers say that juries have become desensitized to large numbers. While awards do get reduced, the results of appeals are not publicized, which leads to higher claim demands and settlements. Others cite a growing resentment to large for-profit health care firms, the caliber and strength of the plaintiffs’ bar and a greater willingness on the part of physicians to testify against another physician.
Prevalence of Medical Malpractice: A study (generally known as the Harvard study) commissioned by New York State in 1986, and released in 1990, showed that actual malpractice is relatively rare. Of the New York hospital cases examined, the incidence of adverse events, or injuries resulting from medical "interventions" or treatment, was 3.7 percent. The percentage of adverse events due to what the physician team characterized as "negligence" (not necessarily a legal definition) was 1 percent. However, only one in eight who suffered from an adverse event due to negligence filed a medical malpractice claim, and only one in 15 received compensation. Most adverse events resulted in only minimal and transient disability and most of the patients' medical care expenses were paid for by health insurance. This helps to explain why only a small percentage of patients who are injured as a result of negligence file medical malpractice claims. However, a significant portion (22 percent) of patients who did not file medical malpractice claims suffered moderate or greater incapacity. In a second phase of the study, researchers confirmed that some of the tort claims filed provided little or no evidence of medical malpractice or even an adverse event, suggesting that the tort system is "very error-prone," at least in its initial stages.
Effects of Tort Reform Between February 1986 and May 1987 the General Accounting Office issued five reports on medical malpractice. The third, published in December 1986, "Medical Malpractice: Six State Case Studies Show Claims and Insurance Costs Still Rise Despite Reforms," singled out the reforms enacted in California in 1975 as among the most effective in moderating increases in the cost of malpractice insurance and the size of awards.
A 2004 study conducted by the RAND Corp.’s Institute of Civil Justice in Santa Monica, California, confirmed the success of California’s tort reform initiative. It found that the 1975 California Medical Injury Compensation Reform Act (MICRA) has reduced the damages that doctors and their insurers are ordered to pay in medical malpractice lawsuits by 30 percent. MICRA limits jury awards for pain and suffering to $250,000 and also limits attorney fees. The study, which reviewed 257 plaintiff verdicts, also showed that compensation to injured patients declined by 15 percent while the fees for plaintiffs’ attorneys fell by 60 percent. Caps on noneconomic damages were imposed in 45 percent of trials that ended in a victory for plaintiffs. Those with the highest percentage loss as a result of caps on noneconomic awards were often those with injuries that caused relatively little economic loss but a significantly lower quality of life, according to the study. A major effect of the law was to make plaintiffs’ lawyers accept more of the cost of the litigation. The law, which was enacted when California was facing an insurance crisis, is being considered as a model for medical malpractice reform in other states.
The cost of medical malpractice insurance began to rise at the beginning of this decade, after a period of essentially flat prices. Rate increases were precipitated in part by the growing size of claims, particularly in urban areas. Among the other factors driving up prices was a reduced supply of available coverage as several major insurers exited the medical malpractice business because of the difficulty of making a profit.
New research suggests that premium increases may be moderating but for any turnaround to take root significant reforms in the delivery of medical care and in the liability system need to occur, industry observers say.
Cost of Claims: Fewer medical malpractice claims are being filed but the dollar amount of each claim is steadily increasing. Aon, a major insurance broker, has released its Hospital Professional Liability and Physician Liability 2006 Benchmark Analysis. The major finding of this year’s analysis, which measured over 47,700 claims representing more than $4.4 billion of incurred losses, was that the overall frequency of medical malpractice claims has not increased for the second consecutive year. While claim frequency is stabilizing, according to the study, the average size (severity) of malpractice claims continues to increase at a rate of 6 percent. However, the average amount paid to indemnify claimants is increasing at a rate of only 3 percent, while amounts paid to defend against liability claims are growing at 17 percent as hospitals invest in claims management.
A recent Conning Research & Consulting Inc. study, "New Opportunities Emerging? Or the Eye of the Hurricane?" predicts that the medical malpractice insurance sector may become profitable in 2006 for the first time in several years. The expected turnaround of the situation is due to a series of rate increases over the past four years that have allowed insurers to catch up with losses, the study says. Tort reform, particularly caps on noneconomic damages at the state level, is also playing a role in the turnaround.
The financial results of medical malpractice insurers show the crisis in medical malpractice insurance is lessening as premiums reach acceptable levels relative to costs. According to the National Underwriter Data Services, the medical malpractice combined ratio, a measure of profitability, was 100.1 in 2005. This means that in 2005 for every medical malpractice premium dollar collected, insurers payed out a little over one dollar in claims and expenses. This represents a significant drop from 2003, when the combined ratio was 138.8, and from the five previous years.
Medical Errors: Confirming the importance of reducing medical errors as part of an overall strategy for lowering medical malpractice claims costs, a study by the Missouri Insurance Department found that the leading grounds for malpractice awards in the state in 2004 were medical errors in diagnoses and surgery. At the end of July 2005, Congress passed legislation that would create a network for reporting and analyzing medical errors. Reporting of mistakes by hospitals would be voluntary, the information would be confidential and information could not be used in medical malpractice cases. There are currently 23 similar state programs, all of them but one with mandatory reporting.
In January 2005 experts commissioned by the Bush Administration to study medical malpractice litigation said state authorities should do a better job disciplining incompetent doctors. They said the public needed to be protected against substandard practice by physicians and that improved policing of medical treatment would decrease the number of malpractice lawsuits, adding that state medical boards often have insufficient resources to handle the thousands of complaints they receive each year and that the process of removing the license of an incompetent doctor is often long and costly.
Conning says in its recent study that for any improvement to take root, reforms on several levels must take place, including judicial reform that would more clearly link compensation with avoidable errors, government support for a national response to the cost of medical errors, state and local support for more uniform model laws and regulations, and the development by the health care and health insurance industries of incentives to reduce avoidable errors.
Tort Reform Initiatives: On May 8, 2006 Congress voted against two measures to limit jury awards in medical malpractice lawsuits sponsored by Senate Republicans. The major bill was based on a Texas law passed a few years ago that supporters say has improved the medical malpractice environment greatly in that state. Proponents of the Texas reform claim it has caused insurance premiums to decline significantly and brought new doctors to the state. S.22 would have set a $250,000 cap on noneconomic damages for individual health care providers involved in malpractice claims, a $500,000 cap when more than one provider is involved and a $750,000 total cap. The vote represents the fourth time in the past three years that the Senate has rejected Republican-sponsored legislation involving medical malpractice.
The President has been urging Congress to pass a more restrictive and comprehensive medical malpractice reform bill that was approved by the House but defeated by the Senate last year. That bill would have limited noneconomic damage awards to $250,000, limited punitive damage awards, placed limits on the time allowed to injured patients to file a lawsuit and established a fee schedule for lawyers' contingency fees. A provision would also have provided liability protection for pharmaceutical firms.
An April 2006 poll conducted by Quorum for the Health Coalition on Liability and Access found that 75 percent of Americans want their elected representatives to pass comprehensive medical liability reform and 76 percent of the people surveyed favor placing reasonable limits on noneconomic damages.
In late March 2006 Wisconsin Governor Jim Doyle signed into law a medical malpractice liability bill that caps noneconomic damage awards at $750,000. The state supreme court struck down an earlier cap in July 2005, finding that those caps were arbitrary and unconstitutional.
In early March 2006 Washington State Gov. Chris Gregoire signed into law a measure that, among other things, will allow doctors to apologize for medical mistakes they have made without allowing the admission to be used against them in court. It gives patients eight years to sue health care providers for malpractice. The measure also requires prior approval for medical malpractice insurance rates and stricter reporting of closed claim data and underwriting standards. The bill does not address caps on noneconomic damages or joint and several liability issues.
In 2005 three states — Georgia, Illinois and South Carolina — passed laws capping medical malpractice noneconomic damage awards and now some 25 states have such legislation on the books. However, also last year the Supreme Court of Wisconsin ruled that the state’s 10-year old law limiting noneconomic awards was unconstitutional. Other challenges are underway or being considered in Florida, Ohio and Illinois.
In New Jersey a program intended to address the escalating cost and lack of availability of medical malpractice insurance is being implemented. In October 2005 the New Jersey Medical Malpractice Insurance Premium Assistance Fund began to distribute subsidies to doctors in specialties with the highest medical malpractice insurance premiums. About 1,200 neurosurgeons, obstetricians and radiologists who read mammograms in the state will each receive about $11,000.
The American Medical Association (AMA) maintains a list of states it considers to be in a medical malpractice liability crisis. In May 2005 the AMA removed Texas from the list. The association pointed to a decline in medical malpractice claims and improved physician recruitment and retention in the wake of the state's 2003 medical malpractice tort reform as reasons for the action. At the same time, the AMA added Rhode Island to the list. It cited soaring jury verdicts that are driving medical liability insurance premiums out of the reach of many doctors. State surveys show that as a result of increasing medical liability costs, 49 percent of doctors in Rhode Island have discontinued or are considering discontinuing certain services and 48 percent are considering leaving the state or giving up clinical practice. With the one subtraction and one addition, the AMA's list continues to include 20 states.
Jury Awards and Settlements: The most recent research from Jury Verdict Research shows that after two years of median medical malpractice jury awards holding steady at about $1,000,000, in 2004 the median rose slightly to $1,045,000. The average award in 2004 rose from about $4.1 million in 2003 to $4.8 million in 2004. Settlements too have shown a steady increase, from a median of $300,000 in 1998 to $1,000,000 in 2004.
Costs to the Public: In March 2006 Towers Perrin released its U.S. Tort Costs: 2005 Update. The study found that over the 29 years since 1975, when medical malpractice insurance data were first separated out from other types of liability, medical malpractice cost increases have outpaced other tort areas, rising at an average of 11.7 percent a year, compared with 9.0 percent for all other tort costs. In 2004 medical malpractice costs totaled over $28.7 billion, up from about $26.5 billion the previous year.
A February 2006 study, prepared by PricewaterhouseCoopers for America’s Health Insurance Plans, examined the factors contributing to rising health care costs and analyzed where the health care dollar goes. It found that medical liability costs and defensive medicine account for 10 percent of medical care costs. Defensive medicine is when doctors order more tests, prescribe more medication and make more referrals than they believe are necessary to protect themselves from being accused of negligence. The study, “The Factors Fueling Rising Healthcare Costs 2006,” also estimates that health insurance premiums rose 8.8 percent between 2004 and 2005.
Proposals to Make Medical Malpractice Liability Insurance More Affordable: Aside from more effective disciplining of incompetent doctors by state authorities, a host of other solutions to reduce the cost of medical malpractice liability insurance have been suggested. Here is an overview of some of them:
(1) Continue efforts to expand the number of states that have pretrial screening panels: Currently about 30 states have such panels.
(2) Emphasize risk management: The effectiveness of risk management measures such as developing practice standards is exemplified by the success of steps taken by anesthesiologists. After identifying the cause of most claims and establishing standards to avoid them in the 1980s, the specialty saw a significant drop in medical malpractice claims and awards and a corresponding drop in the cost of medical malpractice insurance. Other risk management proposals include requiring doctors to study medical malpractice prevention as part of their licensing requirements (Massachusetts has such a program in force); increasing the number of states that require mandatory reporting of medical errors by health care facilities; and helping doctors invest in new health information technology such as electronic health records, electronic prescribing and experimental safety software.
(3) Take action against the small proportion of doctors with multiple judgments against them and who drive up the cost of insurance for all: In Florida, where a constitutional amendment that that would take away medical licenses from those with three or more medical malpractice judgments against them has been proposed, a study found that about 7 percent of the state's practicing doctors would be affected.
(4) Form a Captive or Risk Retention Group (RRG): Captives and RRGs are part of what is known as the alternative insurance market. Captives are a special type of insurance company set up by a parent company, trade association or group of companies to insure the risks of its owner or owners. RRGs are groups in which entities in a common industry join together to provide members with liability insurance.
(5) Create special courts of law to handle medical malpractice cases: Several states are weighing this option, including Illinois, Maryland, Massachusetts and Pennsylvania. A federal bill, the Medical Liability Procedural Reform Act of 2005, authorizing funding to states creating a pilot program of health courts, has also been introduced.
BACKGROUND
Brief History: The insurance industry tends to be cyclical. The medical malpractice insurance segment experienced a period of crisis in the early 1970s, when several private insurers left the market because of rising claims and inadequate rates. The exodus of capacity resulted in an availability crisis. Over the next 15 years, various attempts were made to ease the explosion in claims costs — tort reform, increased diagnostic testing, improved peer review, and increased communication between doctors and patients. These efforts appear to have had a positive impact. The number of claims dropped. However, the size of claims — the dollar amount — has continued to grow, although initially not at the fast pace reported earlier in the decade.
Aggressive campaigns to reform state laws governing medical liability lawsuits began in the 1970s. Every state except West Virginia passed reforms. New Hampshire's entire reform act was subsequently struck down as unconstitutional by its Supreme Court, but Indiana's, which was the most comprehensive in the nation when it went into effect in 1975, has been found constitutional in all challenges and has helped to keep physicians' premiums down in that state. California's Medical Injury Compensation Reform Act (MICRA), also enacted in 1975, which caps noneconomic damages and modifies the collateral source rule, is also considered a model law, see below.
Responding to the problem of availability, physicians formed doctor-owned malpractice insurance companies to provide coverage. These companies now write about half of all the medical malpractice insurance in the nation. Since these new companies had not experienced any losses, they could initially charge much lower rates. Later they suffered the fate of their private insurer predecessors, having to pay claims of increasing frequency and size as the patients of the doctors insured filed malpractice claims. This, in turn, necessitated charging higher insurance rates.
Reasons for the increased incidence of malpractice claims are not entirely clear, but several contributing factors have been suggested. In addition to the fact that people became more litigious than in the past, the crisis of the 1970s, which was extensively reported by the media, may have made people more aware of the possibility of suing for damages. Other factors were the loss of an intimate relationship between families and their doctors and the use of medical experts to testify in malpractice cases. Physicians have also accused lawyers of being excessively eager to bring malpractice suits because of the high fees the lawyers can collect when their clients win.
More recently, there has been a rise in public distrust of the medical profession and publicity about the number of medical errors which has led the public to believe standards are declining when in fact the reverse is true. In addition, changes in the judicial environment are increasing costs. It is easier to litigate, to find counsel and build a case using information on the Internet, for example. Some industry observers say that juries have become desensitized to large numbers. While awards do get reduced, the results of appeals are not publicized, which leads to higher claim demands and settlements. Others cite a growing resentment to large for-profit health care firms, the caliber and strength of the plaintiffs’ bar and a greater willingness on the part of physicians to testify against another physician.
Prevalence of Medical Malpractice: A study (generally known as the Harvard study) commissioned by New York State in 1986, and released in 1990, showed that actual malpractice is relatively rare. Of the New York hospital cases examined, the incidence of adverse events, or injuries resulting from medical "interventions" or treatment, was 3.7 percent. The percentage of adverse events due to what the physician team characterized as "negligence" (not necessarily a legal definition) was 1 percent. However, only one in eight who suffered from an adverse event due to negligence filed a medical malpractice claim, and only one in 15 received compensation. Most adverse events resulted in only minimal and transient disability and most of the patients' medical care expenses were paid for by health insurance. This helps to explain why only a small percentage of patients who are injured as a result of negligence file medical malpractice claims. However, a significant portion (22 percent) of patients who did not file medical malpractice claims suffered moderate or greater incapacity. In a second phase of the study, researchers confirmed that some of the tort claims filed provided little or no evidence of medical malpractice or even an adverse event, suggesting that the tort system is "very error-prone," at least in its initial stages.
Effects of Tort Reform Between February 1986 and May 1987 the General Accounting Office issued five reports on medical malpractice. The third, published in December 1986, "Medical Malpractice: Six State Case Studies Show Claims and Insurance Costs Still Rise Despite Reforms," singled out the reforms enacted in California in 1975 as among the most effective in moderating increases in the cost of malpractice insurance and the size of awards.
A 2004 study conducted by the RAND Corp.’s Institute of Civil Justice in Santa Monica, California, confirmed the success of California’s tort reform initiative. It found that the 1975 California Medical Injury Compensation Reform Act (MICRA) has reduced the damages that doctors and their insurers are ordered to pay in medical malpractice lawsuits by 30 percent. MICRA limits jury awards for pain and suffering to $250,000 and also limits attorney fees. The study, which reviewed 257 plaintiff verdicts, also showed that compensation to injured patients declined by 15 percent while the fees for plaintiffs’ attorneys fell by 60 percent. Caps on noneconomic damages were imposed in 45 percent of trials that ended in a victory for plaintiffs. Those with the highest percentage loss as a result of caps on noneconomic awards were often those with injuries that caused relatively little economic loss but a significantly lower quality of life, according to the study. A major effect of the law was to make plaintiffs’ lawyers accept more of the cost of the litigation. The law, which was enacted when California was facing an insurance crisis, is being considered as a model for medical malpractice reform in other states.
Health Care & Hospitalization
Health care and hospitalization law are federal and state laws that encompass public health, mental health, private health insurance matters, contracts, administrative law, financing, torts, corporation, antitrust, and ethics. Health care law's wide foundation can be attributed to the wide range of issues it encompasses. From genetic testing and the rising cost of health insurance to bioterrorism and malpractice, health care law covers it all.
Federal health law focuses on the activity of the Department of Health and Human Services (HHS). It administers a wide variety of agencies and programs, like providing financial assistance to needy individuals; conducting medical and scientific research; providing health care and advocacy services; and enforcing laws and regulations related to human services. An important part of the HHS are the Centers for Medicare and Medicaid Services, which oversee the Medicare and Medicaid Programs, State Children's Health Insurance Program (SCHIP), Health Insurance Portability and Accountability Act of 1996 (HIPAA), and Clinical Laboratory Improvement Amendments (CLIA). Their goal is to ensure that elderly and needy individuals receive proper medical care.
Individual states also have laws pertaining to public health. Check with a qualified health law attorney in your area for more information. In addition to public health issues, both the federal government and state governments also regulate private health insurance.
What is private health insurance?
Private health insurance originated with the Blue Cross system in 1929. The underlying principle was to spread the risk of high hospitalization bills between all individuals. Typical private insurance plans include health maintenance organizations (HMO's), Preferred Provider Organizations (PPO's) and fee-for-service plans.
What is an HMO?
An HMO provides health services through a network of doctors, hospitals, laboratories, etc. The health care providers may either be HMO employees or have some other contract arrangement with the HMO. HMO plans typically pay providers a monthly set amount regardless of the amount of services performed. When you enroll in an HMO, you choose one of the doctors as your primary care provider (PCP) to manage your health care. Whenever you need health care, you first consult your primary care provider; he or she then may refer you to an HMO-approved specialist.
HMO's are governed by federal and state laws. The main federal law that governs HMO's is the Health Maintenance Organization Act of 1973, and each state has its own set of laws.
What is a Preferred Provider Organization (PPO)?
Preferred Provider Organizations (PPO) are not insurance carriers but groups of providers who sell their services by contract to carriers.
What are fee-for-service plans?
Fee-for-service plans allow subscribers to select their own providers and receive direct reimbursement of valid health-care costs. Although these plans are less common today, they may be offered by either HCSCs or commercial carriers.
What are point-of-service plans?
Point-of-service plans allow their subscribers to go to providers outside the network, but usually do not reimburse costs at the same level as network providers.
Federal health law focuses on the activity of the Department of Health and Human Services (HHS). It administers a wide variety of agencies and programs, like providing financial assistance to needy individuals; conducting medical and scientific research; providing health care and advocacy services; and enforcing laws and regulations related to human services. An important part of the HHS are the Centers for Medicare and Medicaid Services, which oversee the Medicare and Medicaid Programs, State Children's Health Insurance Program (SCHIP), Health Insurance Portability and Accountability Act of 1996 (HIPAA), and Clinical Laboratory Improvement Amendments (CLIA). Their goal is to ensure that elderly and needy individuals receive proper medical care.
Individual states also have laws pertaining to public health. Check with a qualified health law attorney in your area for more information. In addition to public health issues, both the federal government and state governments also regulate private health insurance.
What is private health insurance?
Private health insurance originated with the Blue Cross system in 1929. The underlying principle was to spread the risk of high hospitalization bills between all individuals. Typical private insurance plans include health maintenance organizations (HMO's), Preferred Provider Organizations (PPO's) and fee-for-service plans.
What is an HMO?
An HMO provides health services through a network of doctors, hospitals, laboratories, etc. The health care providers may either be HMO employees or have some other contract arrangement with the HMO. HMO plans typically pay providers a monthly set amount regardless of the amount of services performed. When you enroll in an HMO, you choose one of the doctors as your primary care provider (PCP) to manage your health care. Whenever you need health care, you first consult your primary care provider; he or she then may refer you to an HMO-approved specialist.
HMO's are governed by federal and state laws. The main federal law that governs HMO's is the Health Maintenance Organization Act of 1973, and each state has its own set of laws.
What is a Preferred Provider Organization (PPO)?
Preferred Provider Organizations (PPO) are not insurance carriers but groups of providers who sell their services by contract to carriers.
What are fee-for-service plans?
Fee-for-service plans allow subscribers to select their own providers and receive direct reimbursement of valid health-care costs. Although these plans are less common today, they may be offered by either HCSCs or commercial carriers.
What are point-of-service plans?
Point-of-service plans allow their subscribers to go to providers outside the network, but usually do not reimburse costs at the same level as network providers.
CBP Announces FY06 Enforcement Actions at California’s Land Border
U.S. Customs and Border Protection officers conducting security operations at California’s land border ports of entry performed over 83 million inspections of people, seized almost 213,000 pounds of illegal narcotics and apprehended over 67,500 immigration violators during federal fiscal year 2006, officials announced today.
The CBP San Diego field office manages the work of over 1,300 front-line federal officers at border stations at San Ysidro, Otay Mesa, Tecate, Calexico, Andrade and the San Diego air and sea ports of entry.
Of the total enforcement actions, CBP officers at passenger ports in San Diego and Imperial counties inspected almost 69 million people in 34.5 million passenger cars and 14.5 million pedestrians during the fiscal year, which ended September 30. During these examinations, officers seized 193,733 pounds of narcotics, an increase of over two percent from the previous year when 189,183 pounds were confiscated.
Marijuana seizures at passenger facilities increased slightly to 182,763 pounds; cocaine seizures increased about 60 percent to 8,038 pounds; heroin seizures increased 29 percent to 209 pounds; and methamphetamine confiscations increased 69 percent to 2,723 pounds.
CBP officers at commercial cargo facilities processed over 1.1 million cargo trucks during the fiscal year, up almost three percent over FY2005. Narcotic apprehensions, composed mainly of marijuana, decreased 71 percent to 19,212 pounds compared to 65,585 pounds during the previous year, officials said. CBP officials credited enhanced enforcement and screening methods involving examinations and gamma ray inspections for this reduction.
Total immigration violations processed at the ports fell 10 percent to 67,534. Apprehension of undocumented migrants being smuggled in vehicles fell 54 percent to 22,758 and the apprehension of aliens using fraudulent documents decreased about 15.5 percent to 29,781. The successful detection of undocumented false claims of U.S. citizenship increased over 44 percent, indicating a possible shift in smuggler strategy from hiding migrants in vehicle compartments to coaching them to present themselves as U.S. citizens, officials said.
The apprehension of minors involved in immigration infractions increased eight percent to 6,835 during the year, raising continued concerns by CBP about the physical dangers associated with smuggling of children.
CBP enforcement officers prosecuted 559 migrant smugglers during the fiscal year, an increase of 31 percent over the previous year. Working closely with Mexican authorities, CBP forwarded 53 migrant smuggling cases involving Mexican smugglers to be prosecuted in Mexican courts.
The apprehensions of individuals with outstanding felony warrants for such crimes as homicide, robbery and assault by local, state or national police agencies increased about 16 percent to 1,771 compared to 1,532 arrests during the same period last year. Officials cited good basic police work and increased use at the ports of document scanning and fingerprint technology that compares traveler information against various law enforcement databases as reasons for the change.
The amount of unreported currency seized by CBP officers during the year increased 254 percent to $2.6 million compared to $744,000 the previous year.
Trusted traveler programs advanced during FY2006 with increases in both the Secure Network for Travelers Rapid Inspection (SENTRI) for passenger vehicles and the Free And Secure Trade (FAST) program for commercial truck drivers.
The number of participants enrolled in SENTRI on both sides of the California border increased 19 percent to 78,238 and the number of vehicles processed in San Ysidro, Otay Mesa and Calexico SENTRI lanes increased over nine percent to 3.9 million inspections during the period.
CBP and the Mexican government inaugurated Imperial County’s first SENTRI lane at the downtown Calexico facility in December 2005. The lane became an immediate hit during its first year of use when 6,300 people on both sides of the border enrolled in the program and made over 218,000 entries into the U.S.
FAST participation by registered cargo truck drivers increased 17 percent to 2,532 drivers who made 135,215 entries into the U.S., up 130 percent over the previous year.
The number of interceptions of reportable or actionable agricultural pests in the passenger environment increased from 275 in FY2005 to 858 last year and the number of violations detected increased 117 percent. CBP officials credit the change to increasing effectiveness in recognizing and preventing the accidental or intentional introduction of potentially injurious pests and effective partnerships with such agencies as the U.S. Food and Drug Administration, U.S. Department of Agriculture, California Department of Food and Agriculture, and the San Diego County Sheriff ‘s and Agriculture offices.
“Sustained rigorous border security by CBP officers and agriculture specialists whose priority mission is to detect possible terrorists or terrorist weapons continues to produce benefits in terms of narcotics seizures, human smuggling apprehensions, capture of wanted individuals and detection of pests and diseases,” said Adele Fasano, field operations director for CBP in San Diego. “Our challenge continues to be to better facilitate the efficient processing of legitimate vehicle, pedestrian and cargo traffic to minimize any delays. We are working hard to expand our trusted traveler programs, use of technology and layered enforcement strategies to minimize these delays.”
U.S. Customs and Border Protection is the unified border agency within the Department of Homeland Security charged with the management, control and protection of the nation’s borders at and between the official ports of entry. CBP is charged with keeping terrorists and terrorist weapons out of the country while enforcing hundreds of U.S. laws.
The CBP San Diego field office manages the work of over 1,300 front-line federal officers at border stations at San Ysidro, Otay Mesa, Tecate, Calexico, Andrade and the San Diego air and sea ports of entry.
Of the total enforcement actions, CBP officers at passenger ports in San Diego and Imperial counties inspected almost 69 million people in 34.5 million passenger cars and 14.5 million pedestrians during the fiscal year, which ended September 30. During these examinations, officers seized 193,733 pounds of narcotics, an increase of over two percent from the previous year when 189,183 pounds were confiscated.
Marijuana seizures at passenger facilities increased slightly to 182,763 pounds; cocaine seizures increased about 60 percent to 8,038 pounds; heroin seizures increased 29 percent to 209 pounds; and methamphetamine confiscations increased 69 percent to 2,723 pounds.
CBP officers at commercial cargo facilities processed over 1.1 million cargo trucks during the fiscal year, up almost three percent over FY2005. Narcotic apprehensions, composed mainly of marijuana, decreased 71 percent to 19,212 pounds compared to 65,585 pounds during the previous year, officials said. CBP officials credited enhanced enforcement and screening methods involving examinations and gamma ray inspections for this reduction.
Total immigration violations processed at the ports fell 10 percent to 67,534. Apprehension of undocumented migrants being smuggled in vehicles fell 54 percent to 22,758 and the apprehension of aliens using fraudulent documents decreased about 15.5 percent to 29,781. The successful detection of undocumented false claims of U.S. citizenship increased over 44 percent, indicating a possible shift in smuggler strategy from hiding migrants in vehicle compartments to coaching them to present themselves as U.S. citizens, officials said.
The apprehension of minors involved in immigration infractions increased eight percent to 6,835 during the year, raising continued concerns by CBP about the physical dangers associated with smuggling of children.
CBP enforcement officers prosecuted 559 migrant smugglers during the fiscal year, an increase of 31 percent over the previous year. Working closely with Mexican authorities, CBP forwarded 53 migrant smuggling cases involving Mexican smugglers to be prosecuted in Mexican courts.
The apprehensions of individuals with outstanding felony warrants for such crimes as homicide, robbery and assault by local, state or national police agencies increased about 16 percent to 1,771 compared to 1,532 arrests during the same period last year. Officials cited good basic police work and increased use at the ports of document scanning and fingerprint technology that compares traveler information against various law enforcement databases as reasons for the change.
The amount of unreported currency seized by CBP officers during the year increased 254 percent to $2.6 million compared to $744,000 the previous year.
Trusted traveler programs advanced during FY2006 with increases in both the Secure Network for Travelers Rapid Inspection (SENTRI) for passenger vehicles and the Free And Secure Trade (FAST) program for commercial truck drivers.
The number of participants enrolled in SENTRI on both sides of the California border increased 19 percent to 78,238 and the number of vehicles processed in San Ysidro, Otay Mesa and Calexico SENTRI lanes increased over nine percent to 3.9 million inspections during the period.
CBP and the Mexican government inaugurated Imperial County’s first SENTRI lane at the downtown Calexico facility in December 2005. The lane became an immediate hit during its first year of use when 6,300 people on both sides of the border enrolled in the program and made over 218,000 entries into the U.S.
FAST participation by registered cargo truck drivers increased 17 percent to 2,532 drivers who made 135,215 entries into the U.S., up 130 percent over the previous year.
The number of interceptions of reportable or actionable agricultural pests in the passenger environment increased from 275 in FY2005 to 858 last year and the number of violations detected increased 117 percent. CBP officials credit the change to increasing effectiveness in recognizing and preventing the accidental or intentional introduction of potentially injurious pests and effective partnerships with such agencies as the U.S. Food and Drug Administration, U.S. Department of Agriculture, California Department of Food and Agriculture, and the San Diego County Sheriff ‘s and Agriculture offices.
“Sustained rigorous border security by CBP officers and agriculture specialists whose priority mission is to detect possible terrorists or terrorist weapons continues to produce benefits in terms of narcotics seizures, human smuggling apprehensions, capture of wanted individuals and detection of pests and diseases,” said Adele Fasano, field operations director for CBP in San Diego. “Our challenge continues to be to better facilitate the efficient processing of legitimate vehicle, pedestrian and cargo traffic to minimize any delays. We are working hard to expand our trusted traveler programs, use of technology and layered enforcement strategies to minimize these delays.”
U.S. Customs and Border Protection is the unified border agency within the Department of Homeland Security charged with the management, control and protection of the nation’s borders at and between the official ports of entry. CBP is charged with keeping terrorists and terrorist weapons out of the country while enforcing hundreds of U.S. laws.
Sunday, December 10, 2006
Message To Mexico: Privatize Pemex
MEXICANS LIKE TO think of Petroleos Mexicanos as a national treasure to be guarded and never sold. In reality, Pemex is no more than a largish oil company -- the world's 11th-biggest -- that is unprofitable and inefficiently run. President Felipe Calderon should privatize it -- not for the revenue a sale would generate but for the powerful message it would send about Mexico's embrace of free markets.
Source: American Attorney
Selling a chunk of Pemex wouldn't provide a windfall for the government. Even though Pemex has more reserves than most quoted oil majors, it also has more problems. And its big tax burden is one reason it is unprofitable. A Pemex sale would require a reasonable long-term tax deal with the Mexican government. With such an arrangement, and $85 billion in revenue, it is probably valued at upward of $80 billion. Subtract $42 billion in debt, and a complete privatization would bring the state less than $50 billion, equivalent to just a year of Pemex's tax payments.
So why should President Calderon sell it? If done right, a Pemex privatization might help break the grip of Mexican economic failure. Productivity has increased by less than 0.5% per annum since 1990. Every year, 500,000 productive workers cross the border to find jobs in the U.S. Pemex both symbolizes this failure and is part of it. In fact, Pemex provides a striking case of political featherbedding -- its revenue per employee in 2005 was just $610,000 compared with Exxon Mobil's $4.1 million. Conversely, while it has just a quarter of Exxon Mobil's revenue, it has 50% more proven reserves than the U.S. oil major.
As Vicente Fox showed in his recently ended six-year tenure as president, even a conservative who follows consensus Mexican economic policy while avoiding tough questions can achieve little. It would be much better to break with consensus and strike out for the free market. That is the revolution Margaret Thatcher inaugurated when she started flogging government-owned businesses in Britain more than two decades ago. Turning Pemex into a modern, efficient operation could bolster Mexico's oil exports and kick-start growth. Because President Calderon owes nothing to Pemex's politically powerful unions, there has never been a better time to act than the present.
Hedge-Fund Policing
A MILLION BUCKS isn't what it used to be. But that is all you need to be an eligible hedge-fund investor. The Securities and Exchange Commission is preparing to raise that to at least $1.5 million. Unfortunately, this won't protect small investors.
The blue-chip funds of the industry don't really want money from the little guy. And the SEC lacks the resources to enforce the higher threshold. The danger here is that raising the threshold leaves investors with a false sense of protection.
There is nothing wrong with trying to protect small investors or probing infractions like insider trading more aggressively. But the systemic risk posed by the rapid, leveraged growth of the hedge-fund industry deserves more attention and serious consideration by regulators. The hedge-fund industry's increased role in lending activities, without the kind of reserve requirements applied to banks, demands it.
Also, leveraged strategies employed by hedge funds in a bull market are unlikely to work the same way if credit tightens amid bearish forces. That could lead to cascaded selling by funds trying to dump slumping securities simultaneously. The SEC would better serve investors and financial markets by addressing these systemic threats instead of merely tinkering around the edges of hedge funds.
Biotech Bounces
THERE ARE TWO WAYS to invest successfully in biotech. One takes scientific knowledge and a lab coat. The other simply requires a calendar.
Over the past 18 years, biotech stocks have produced annual returns of 17%. However, the bulk of that has come between August and the year end. The American Stock Exchange Biotech index returned only 5% over the rest of the year.
Owning biotech over the last five months of the year looks even better on a risk-reward basis. It would have lost money only once over nearly two decades. Investing in biotech from January to July would have resulted in losses on 10 separate occasions.
So what explains this curious seasonal effect? Biotech stocks are driven by news. Demand for drugs isn't economically cyclical -- the most important facts for investors are how effective a new drug is in relation to its side effects, and whether it will be approved by regulators.
While negative data are likely to be presented at any time during the year, good news tends to arrive during the autumn. Biotech firms prefer to present findings at conferences heavily attended by doctors. The most important of these meetings, such as this weekend's American Society of Hematology conference in Orlando, Fla., take place toward the year end. Successful trials are given greater prominence at such powwows.
Furthermore, good news for biotech firms from regulators normally comes later in the year. Many companies rush to file with the Food and Drug Administration by the end of December or shortly after -- it looks better in the annual reports to say a drug is awaiting approval. The FDA gives itself more than six to 10 months to decide. So the majority of biotech approvals come toward the end of the year.
Source: American Attorney
Appeals Court Upholds Injunction Halting Generic Plavix
A federal appeals court handed a legal victory to Bristol-Myers Squibb Co. (BMY) and Sanofi-Aventis (SNY) Friday by upholding a lower court injunction in August that halted sales of a generic version of the blockbuster heart drug Plavix.
The appellate court ruling means that Apotex Inc. of Canada may not resume selling a cheaper, copycat version of Plavix in the U.S. pending the outcome of a patent-rights trial set to begin in January.
Apotex began selling generic Plavix in August despite the existence of a Sanofi U.S. patent for Plavix that doesn't expire until 2011. Apotex argues that the patent is invalid and unenforceable, a contention disputed by Bristol-Myers and Sanofi, which co-market the drug. Plavix generated global sales of $5.9 billion in 2005, according to IMS Health.
In late August, U.S. District Judge Sidney Stein in New York issued a preliminary injunction halting sales of Apotex's generic Plavix. Apotex appealed the injunction to the U.S. Court of Appeals for the Federal Circuit in Washington, leading to Friday's ruling.
Three of the court's judges upheld Stein's injunction, writing "we conclude that the district court did not abuse its discretion in granting the preliminary injunction."
A trial in underlying patent dispute is set to begin Jan. 22 in federal court in New York.
Sanofi Sees Acomplia Verdict In April 07
p> Sanofi-Aventis SA (SNY) Friday said it expects a final response from U.S. regulators on its application to market obesity drug Acomplia by April 26, 2007, after a six-month review.
The Paris-based pharmaceutical company resubmitted on Oct. 26 a complete response to the conditional approval granted by the Food and Drug Administration in February.
The world's second biggest drug maker measured by prescription sales said the FDA considered Sanofi's resubmission to be a so-called "class two" response, which requires around six months to review.
If the regulator had opted to consider the resubmission as a "class one" response, which requires only a two-month review, Acomplia would have received a final verdict by Dec. 26, 2006.
Navid Malik, an analyst with London-based brokerage Collins Stewart, said the news was unsurprising, as several analysts had already begun questioning earlier forecasts by Sanofi management that a U.S. launch would be possible by the end of 2006.
A company spokeswoman declined to comment on the nature of the FDA's review, or on when Sanofi-Aventis plans to launch the drug in the U.S.
Malik noted that the FDA's six-month review is likely to focus on Acomplia's side-effects, such as nausea and depressed mood, which were also highlighted in a study presented earlier this week.
"It can't be labeling, because it wouldn't take so long. It obviously has to do with the side effects profile."
The study, which was presented Tuesday at an international diabetes congress in South Africa, showed Acomplia controls blood sugar and body weight in diabetic patients, boosting its potential to be used beyond obesity treatment.
Vontobel analyst Karl-Heinz Koch said he expects Sanofi-Aventis to reposition the drug, aiming to sell it for the treatment of diabetes.
Acomplia is approved in Europe for the treatment of obese or overweight patients and is sold in the U.K., Germany, Denmark, Sweden, Finland, Norway, Ireland, Argentina and Austria.
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