legal corner
The Saddest Call I Get From Young Dentists
by Joseph McGregor
W hat is the most heartbreaking call I get ? I get many , so it can be difficult to narrow them down , but a primary ingredient of dental tragedies is preventability , so the calls that hurt the most are the ones that could have been avoided with legal help on the front end rather than on the back end . Accordingly , the saddest call I get is from an associate dentist who just invested a few years into a practice under the promise that they would get to buy into or buy out the practice , only to find out that the seller sold to corporate dental , or the seller wanted an outstanding price , or the seller no longer wanted to sell . Whatever the roadblock , the result is the same : you cannot move forward at this practice .
Here ’ s how a typical purchase option comes about : you are working at a dental practice and someone ( a mentor , friend , family member , colleague , etc .) solicits you to work for them and they promise that after you work for a while , they will allow you to purchase the practice , or part of it . It sounds great , especially because you ’ ve dreamed of owning your own practice . But this promise either does not find its way into the contract , or does not get included in a manner that would make it binding .
Purchase options are easily drafted in vague or precatory language , and that vagueness creates the deception of an enforceable purchase option . A good rule of thumb is if the purchase option is only a few sentences long , then it probably isn ’ t strong enough . In general , there are four things that make a purchase option enforceable :
Consideration . This means that you are giving something up or paying for the purchase option . Consideration can take the form of an upfront fee for the purchase option . In many states , consideration can be as simple as leaving a current job or giving up higher wages for the option to purchase part of the practice . For example , going from Practice A where you earn 35 % of collections with no purchase option and going to Practice B where you earn 30 % of collections and have a purchase option .
Price . This requires you to specify either a stated price for your buy-in or a method for calculating a price in the future . We always encourage our clients to negotiate the price upfront and not leave items like the price to the unknown future . Not only does having a price help you enforce your option if the owner refuses to sell , it also will reduce the headache of negotiating when you ’ re ready to exercise your option . Furthermore , if you negotiate a price that relates to the time at which you start working , you will not be buying into your own goodwill in the future .
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