Dentists and dental practices rely on various legal agreements to govern relationships such as partnerships, practice-associate relationships, service provider relationships, or the purchase and sale of dental practices. Dental contracts can involve complex legal issues. An oversight or mistake in negotiating or drafting a dental contract can have serious legal or financial repercussions for a dental or dental practice.
As a result, dentists need experienced legal support to guide them through the process of negotiating, drafting, and reviewing contractual agreements. When you or your business face legal questions involving your written agreements, contact Mahan Law today for a free initial case evaluation with a knowledgeable dental lawyer to discuss your or your practice’s contractual matters and obtain the legal counsel you need to protect your professional or business interests in your agreements.
Common Kinds of Dental Contracts
At Mahan Law, our legal team has extensive experience advising dentists and dental practices on all kinds of agreements.
Associate Employment Agreements
Dental practices need agreements with the dental practitioners who work as associates with the practice. Associate employment agreements may create an employer-employee relationship between a practice and an associate dentist, or an associate may work in a practice as an independent contractor. Associate employment agreements should address matters such as:
- Compensation structure, which may take the form of salary, production-based pay, or collections-based pay
- Bonuses and other benefits (e.g., health insurance, retirement account contributions)
- Job responsibilities
- Work schedules
- Malpractice insurance coverage
- Termination provisions (e.g., grounds for termination, notice requirements)
Partnership Agreements
Dental practices owned by multiple dentists will need agreements to govern ownership and management structures, such as partnership agreements, operating agreements, bylaws, or shareholders’ agreements. An agreement governing a dental practice partnership will cover issues like ownership percentages, management roles, decision-making procedures and authority, allocation of profits and losses, admission procedures for new partners, and exit or buyout rules. Dental partnership agreements should also include amendment procedures that allow practice owners to update their agreements as needed.
Service Agreements
Practices may enter into agreements with service providers, such as electronic records management systems and billing programs. A practice may also join a dental services organization (DSO), which handles operational matters so the owners can focus on clinical decision-making. Service agreements, especially those with DSOs, typically address matters such as:
- Payment structure (e.g., service charges, subscription fees, production- or collection-based fees)
- Trademark/brand name licensing rights
- Agreement duration and renewal rights
- Termination procedures
- Ownership of patient lists and records
- Liability and indemnification provisions
- Protections for clinical decision-making authority
Purchase and Sale Agreements
Dentists will need purchase and sale contracts when buying and selling dental practices. Agreements can facilitate an ownership transfer through an asset or equity purchase. Purchase and sale agreements need to cover critical terms such as:
- Purchase price, including allocation of the price among the practice’s assets for tax purposes
- Payment terms (e.g., payment schedules, seller financing, or post-closing earnout provisions)
- Allocation of preexisting liabilities
- Excluded assets
- Transition procedures, including those for patient records and staff
- Continued employment for sellers
- Non-solicitation and other restrictive covenants on sellers
Common Issues in Dental Contracts
Dental contracts can lead to serious legal problems for dentists and practice owners, especially when parties negotiate and draft agreements without legal counsel. Some of the most frequent issues with dental contracts include:
- Vague Language – Agreements with unclear or confusing language may lead to disputes between parties when they develop differing interpretations of their rights and obligations under those provisions. For example, associate contracts or partnership agreements may have unclear formulas for calculating compensation or profit distributions based on production or collections.
- Overly Broad Restrictive Covenants – Conflicts can arise between dentists and dental practices regarding restrictive covenants when dentists contend that non-compete or non-solicitation provisions have unenforceable broad scopes.
- Lack of Exit Procedures – Dental partnerships can face significant legal disputes due to the absence of comprehensive exit policies when a partner leaves the practice or retires. Parties may have conflicts over issues such as the valuation of partnership stakes or a departing partner’s right to take their patients with them.
- Unclear Ownership Rights – Employment or partnership agreements may lead to issues due to a failure to include provisions addressing ownership rights in assets such as equipment or patient lists.
How a Dental Attorney Can Help with Contractual Matters
The dental lawyers at Mahan Law can assist dentists and dental practices with complex contractual issues through comprehensive legal representation that includes:
- Reviewing business circumstances, legal needs, and contractual objectives
- Identifying critical issues for contracts to cover
- Drafting customized agreements to protect clients’ interests and goals
- Experienced negotiation of contract terms
- Ensuring that agreements comply with regulatory requirements
- Auditing ongoing contracts periodically and as needed
- Resolving disagreements or misunderstandings over contract terms
Reviewing Existing Dental Contracts
The legal team at Mahan Law also supports dental practices through reviewing existing contracts. Common scenarios where contract review should occur include:
- Hiring a new associate
- Admitting a new partner to the practice
- Preparing to sell a practice
- Leaving a practice to join or start another practice
- Renegotiating compensation packages
Periodic review of contracts can also help dental practices proactively identify potential legal risks arising from changing business circumstances that cause contract provisions to become outdated.
Contact a Dental Attorney Today for Advice and Support with Your Contractual Needs
Do you need help negotiating or drafting an agreement for an employment or business relationship in your dental practice? If so, get seasoned legal counsel who can explain complex issues and assist you with making informed choices about your business or professional interests. Contact Mahan Law for a free, confidential consultation with an experienced dental law firm. We’ll discuss the details of a proposed or existing dental contract and show you how we can help you protect your legal and financial interests in your agreement.
