legaldental

The key is enforceability!

The language of an associateship contract must be clear as to who is responsible for what (duties), and what the consideration (compensation/salary/percentage of production) is for each party, the host dentist and the associate, in the performance of those duties. If it comes down to a jury question as to either aspect, juries can not read handshakes. Oral agreements and promises, although theoretically enforceable, do not memorialize the agreement as well as a written document.

The written agreement is to state the terms of the relationship, and ultimately should protect both parties. Who you are dealing with will generally dictate what you are likely to end up with if you do not take measures to protect yourself. Individual dentists may pay a higher percentage of production (up to 40%), but generally try to reach a handshake agreement. They do not want to take the time necessary to get a written agreement, or do not want anything in writing which may be used against them later, or all of the above. Additionally, the potential associate dentist is in a hurry to get started in the practice of dentistry, is excited about the new opportunity, and most of all, wants to makes some money, and for these reasons will jump right in on nothing more than a handshake.

What kind of language protects the independent contractor dentist? It varies from situation to situation, and that is why it is a good idea to have a contract reviewed by an attorney who will then explain it paragraph by paragraph, and then make recommendations on negotiating the insertion of specific language, as well as the deletion of unreasonable terms. Also, depending on the circumstances, it may be advisable to get an attorney involved in the negotiation process.

The following are the minimum of areas which should be covered in any associateship contract:

Length of Association and Renewability

Termination Procedure and Notice Procedure

Exclusive Employee vs. Independent Contractor

Compensation, Frequency of Pay, Example Computation, Draw, & Accounts Receivable

Host/Employer Obligations as to Expenses and Support

Vacations and Sick Pay

Business Records/Collections

Patients/Patient Records

Covenant Not to Compete

Death or Disability Option

Right of First Refusal

State Law Enforcement

Claim Fees and Costs

Associate Duties and Rules/Regulations of Conduct/Practice/Services to be Provided

Indemnity Agreement & Insurance

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In a nutshell, informed consent is a legal condition whereby a person can be said to have given consent based upon an appreciation and understanding of the facts and implications of any actions. The individual needs to be in possession of all of his faculties, such as not mentally retarded or mentally ill, without an impairment of judgment at the time of consenting. Impairments include sleep, illness, intoxication, drunkenness, using drugs or other health problems. Some acts cannot legally take place because of a lack of informed consent. In other cases, consent of someone on behalf of a person, not considered able to have informed consent, is valid. Examples of this include the parents or legal guardians of a child and caregivers for the mentally ill.

Rule 108.7 of the Rules & Regulations of the Texas State Board of Dental Examiners requires Texas dentists to maintain a written informed consent signed by the patient, or a parent or legal guardian of the patient if the patient is a minor, or a legal guardian of the patient if the patient has been adjudicated incompetent to manage the patient's personal affairs. Such consent is required for all treatment plans and procedures where a reasonable possibility of complications from the treatment planned or a procedure exists, and such consent should disclose risks or hazards that could influence a reasonable person in making a decision to give or withhold consent.

Therefore, under TSBDE Rule 108.7, Informed Consent:

- must be signed (and dated) by the patient, or a parent or legal guardian

- Is required for all treatment plans and procedures where a reasonable possibility of complications from the treatment or procedure exists

- Such consent should (must) disclose risks or hazards that could influence a reasonable person in making a decision to give or withhold consent.

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Question:  If a dentist signs the commercial lease in the name of their P.C. (Professional Corporation, or other legal entity), will the doctor still be "personally guaranteeing" the lease?  What is a "Personal Guarantee," and why is it important to either sign it or not to sign it?

Answer: Typically, for first time business owners, the landlord will insist on the Personal Guarantee to secure the payment of rent, and this is usually not negotiable for first time commercial tenants.  The reason that you sign in the name of your P.C. is to legally support the position that your business is run in its entirety as a P.C., or legal entity, including as the tenant on the lease.  The main things to remember and do are (a) have the lease and guarantee reviewed by legal counsel, and (b) do not allow, agree, or accept that the lease guarantee also be signed by a spouse or parent.  Listen to the legaldental.com Podcast below to learn more:

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