Business Law

While litigation may sometimes be your only recourse, many times it is a result of signing a bad contract or not fully examining the contract you have signed.  Here are ten things to know before entering into an agreement in New York that can help protect your business and your assets:

1.      Know the Other Party

Be sure that the business you are contracting with is registered to do business in the state in which you operate your business.  Should there be a problem later on, it will be much easier to institute a lawsuit as the states maintain addresses for service of process on registered corporations.  In addition, if the business is not properly registered in the state, there could be legal issues with your contract.  The business should also be licensed in the specific type of business it conducts, if this is required.

2.       Pricing Issues

If you are a buyer or a seller, know what you are paying or getting paid, when the money is due, how it is to be paid, where it is being paid to.


3.      What is the Exact Product or Service

While this may seem obvious there are thousands of lawsuits on just this issue.  Be sure you and the other party are on the same page, literally and figuratively.

4.      Delivery of the Goods or Services

Specify exact time frames for delivery of the product or service and when payment is due in relation to this time frame.

5.      Condition of the Product or Service

Are the items new or used?  If used, how much?  If new, in original packaging or repackaged?  If a service contract, specify who will be doing the service and his or her credentials?

6.      Warranties

What are the guaranties on the product or service?  What period of time do they cover?  What is the procedure for repairing or replacing an item or correcting a service mistake?

7.      Getting out of the Contract

While most contracts are made to avoid getting out of them, you can sometimes negotiate an “out” clause for poor performance or lack of proper delivery or other essential things.

8.      Renewal of the Contract

Is there an automatic renewal?  Is there any option to renew?

9.      Default

There are several ways to default on a contract. Two prevalent ways are non-payment and non-performance.  Non-payment can include not getting paid in full, on time or at all.  Non-performance can be not doing the job properly, in full, or not how you expected it to be done.  All of these can be combated with remedies in the contract.

10.  Remedies

Make sure the contract has a section dealing with remedies for defaults.  Remedies are compensation to the injured party for such defaults.  Outside of the contract there are other ways to be compensated for default in contracts, including state statutes, federal statutes like the UCC, fraud actions and illegality of the contract, dealing with minors, duress, undue influences, etc.

If you have any questions regarding contract law, contact me at the Law Office of Frederic R. Abramson at 212-233-0666

You are sitting in your office on the busiest day of the year, and just when you think nothing else could go wrong, a person walks in and utters the fateful words “You’ve been served”, while handing you a stack of papers.   Your business is a party to a New York civil litigation lawsuit. Your business has  just been sued.  What is the best course of action you can take, and how can you protect yourself as well as your business?

Who?

Read the papers that are given to you to find out the party that is suing you and the type of civil litigation you are involved in.  Is it a corporation, a partnership, or an individual?  Are they a customer or a supplier of your business? Who is the lawyer representing the party that is suing you?  This information will help your attorney obtain a more favorable result for you by researching the other party and its counsel. (Do they settle often?  Are they a big company?  What are their financial resources?  Do they have a reputation to maintain and therefore may want to settle quickly?).

What?

What exactly are you being sued about?  Is it a breach of contract claim? Is it a non-payment claim, or a non-performance claim?  Those are many reasons why a business may be sued.

When?

In Civil Litigation, timing is critical in a lawsuit.  Responses must be filed within a set period, which in New York is  usually within 30 days.  While an extension can be granted, don’t wait until the last minute to contact your attorney.  It takes time to prepare an appropriate answer to the papers.  If you do not respond in a timely fashion, you will be considered in default, and a judgment may be taken against you.  This means you may lose the case without the opportunity to provide a defense.

Also, don’t assume you are judgment proof, because judgments can be collected from future earnings as well as assets.  In addition, do not assume that your insurance covers everything, although it may be wise to notify your insurance carrier as well as your attorney.

Where?

What court are you being sued in?   What county?  State or Federal Court? You may be sued in a state far away if, for instance, you have done business in that state.  In that case, your New York attorney will have to obtain local counsel for your small business in the other state, and this takes time.

Why?

Why did the party resort to a lawsuit?  Is it something you can fix by having your attorney talk to the other side and negotiate a settlement?  Is there a running animosity between your company and the other party, in which case settlement will be difficult?  Do you need to file a counterclaim against the other party?

How?

Immediately notify and supply the civil litigation  lawsuit papers to your attorney.  Make sure you retain a photocopy for yourself.  Inform your attorney of all the facts relevant to the case.  Your attorney will decide what is important and what is not.
Organize your documents pertaining to the case so that you can minimize the time the attorney must spend going through them.  This will save your attorney ’s time, and therefore save you legal fees.  Do not talk to the other party’s attorney.  He works for the other party, just as your attorney works for you.  Let your attorney do this for you.  In addition, remember that in law, just as in any profession or business, there are rules and procedures  your attorney knows and you may not.  To stay out of trouble, leave the legal work to your attorney.

A trial can take several weeks in New York, including preparation time.  Therefore, it may be in your best interest in certain cases to settle.  However, be realistic in your settlement expectations.

Conclusion

Having an ongoing attorney-client relationship will help protect you in the event of a civil litigation lawsuit.  The more your attorney knows about your business, the better the attorney will be able to help you.  In addition, discussing business options and problems with your attorney ahead of time could help prevent a lawsuit from ever starting.  Either way, it will save you money in the long run.

CALL TODAY FOR A CONSULTATION AT 212-233-0666

 

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If you are a small-business owner, contacting a lawyer is often a scary proposition. It appears to be costly and only a little bit comes back in return. Legal advice and guidance in varied forms is vital to any small business. It is true that you will get a bill. However, hiring an attorney doesn’t have to break the bank.

Here are five business reasons why your company may benefit from the involvement of an attorney:

1. You’re starting a business.

Most businesses decide to start running their business before ever calling a lawyer for legal advice. Don’t make the same mistake. Before you receive a penny, contact a lawyer to review your business structure, legal ramifications and other elements designed to protect your business and help it flourish.  Remember that a lawyer isn’t someone you go to just when you have a trouble.

2. Check your contracts.

Make sure that any contracts that you have are in writing. Oral contracts often mean an unpleasant lawsuit later.  It is important for an attorney to review every contract you use in your business, both with customers as well as suppliers – or draw up suitable contracts if none are in place.

3. Check if any money is owed.

An attorney can help by devising a course of action to collect any funds.  In the alternative, if you any money a lawyer can often provide defenses and negotiate on your behalf.

4. Plan for your retirement.

You probably want your business to continue when your retire. A business attorney can address succession.

5. Resolve a business dispute.

Just hiring an attorney will signal that you mean business. Litigation could be expensive.  Hiring a lawyer early may help you avoid lengthy and costly court action.

Don’t fear the cost.

Legal advice costs money. But it doesn’t need to be as prohibitively expensive as you might fear. Some matters can be handled on as-needed basis and you may not need a large retainer.

Call me at 212-233-0666.

Fred Abramson

Frederic R. Abramson

Law Office of Frederic R. Abramson
160 Broadway, Ste. 500
New York, NY 10038
212-233-0666
About Fred Abramson

Fred helps clients resolve their business disputes using whatever adversarial and non-adversarial strategies necessary to accomplish the client’s objective most efficiently. By using both settlement negotiations and litigation techniques, wherever necessary, Fred assists clients in achieving the best possible outcomes for themselves and their companies while controlling their legal costs. Fred also assists in business and family related immigration.

 

Social Media such as Twitter, Facebook and Blogs are an easy way for employees to communicate with the world.  This can cause far reaching legal risks for employers. What can be done to prevent social networking sites from being used as a sounding board for an unhappy employee, a place to disclose trade secrets, or a means to defame bosses and co-w orkers? How can you protect your company from the possible legal problems due to social networking? I can help by advising you how to:

  • Monitor employee use of blogs by telling you what’s legal & what’s not
  • Draft workable blogging policies
  • Assess your liability risks from your employees use of social networking site and blogs
  • To minimize your risk for unnecessary and expensive litigation
  • Comply with the New FTC regulations effective December 1, 2010 about blogging.

Here are some key issues that you need to be aware of:

  • Blogs in the Workplace: Legal Risks & Liability You Need to Know
    • How to legally monitor your employee’s use of social media sites without infringing on their legal rights.
    • Does the employee or company own the blogs or social networking account?
    • If an employee posts something on a blog, or a social media site, can the employers be held liable?
    • Strategies to protect confidential and business information
  • What is legal for your Employees to Blog about
    • What to do about bad comments of your employees in their personal blogs
    • What can you do to limit blogging by your employees when they are not working
    • What is the difference between bad behavior and the first amendment right to freedom of speech?
  • Drafting Social Media Policies:
    • How to draft a social networking  policy to protect your company while balancing your employees right to privacy
    • Why you may not want to restrict from your employees from engaging in social media
    • How you can enforce the restrictions placed in your social media policy.
    • Assessing your employees rights  under the  National Labor Relations Act

Sole proprietorships, such as computer consultants using a name other than the owner\’s name should file a Business Certificate with the County Clerk\’s Office in the county where the business is located.

General partnerships, which are operating a business under an assumed name should file a Business Certificate for Partners with the County Clerk\’s Office in the county where the business is located.

Corporations, LLCs, LLPs, and limited partnerships register an assume name as part of their required business filings with the New York Department of State.

As an independent contractor, there is no employer-employee relationship with the person or company that you are doing business with.  The independent contract is a consultant who performs specific duties that the consultant is capable of performing.

At the start of the relationship, it is absolutely vital to have an independent contract agreement (also known as a consulting agreement) drafted to protect both parties.  The consequences of failing to establish a consultant as an independent contractor can have dire tax consequences.

In your independent contractor agreement, it is important to establish that the consultant performing the services is is not under the control of the employer.  In addition, the employer may not directly supervise the consultant.

When it comes time to draft an independent contractor agreement, you should focus on the fee for services rendered and provide a complete description of the services that are to be provided.

One of the most basic parts of a contract is describing its subject matter.   The subject matter is the part of the contract where you, the client, has the most imput. Generally, the subject describes the services that are to be perfomed, the goods that need to be sold, the property that needs to be assigned. 

When describing the subject matter of your contract be aware of the following:

  • What are the basic facts of the contract?  A well-drafted contract requires an awareness that words have implications.  For example, during negotiations you may have agreed to purchased gold.  When you receive the contract, the seller may have changed the subject to metals.  This would have serious implications if the seller ships you silver instead of gold.
  • What do common terms really mean?  A common term may change its meaning over time, so it is best to define it in the subject section of the contract.

You have been negotiating for months with a supplier.  A competitor becomes aware of your negotiations and derails the deal.  Can you recover for your damages?  Under the Tort of Inteference with a Business Opportunity you may.

Generally, the types of opportunities that can be subject to such a claim include:

  • Sale or Purchase of a Business
  • Sale or Purchase of Property
  • Employment Opportunities
  • Sale of Goods
  • Construction Contracts
  • Professional Relationships

In order to prove the tort of Interference with a Business Opportunity, you must show:

  • That there is an opportunity in existence that is definate and specific in scope and capable of being acted upon
  • The other party had knowledge of the opportunity
  • The other party with intent intefered with the opportunity
  • They actually caused damage to your interests
  • Actual Damages

More Reading:

Your star salesperson has decided to jump ship to a competitor.  She has taken your customer list and has started soliciting for business. What can you do to stop her?

Under New York Contract Law, you may be able to obtain a permanent  injunction against her where she would be prohibited from soliciting your clients. 

A preliminary injunction can be granted in the early stages of a lawsuit. For example, a preliminary injunction may be appropriate to stop a former employee from doing business or soliciting any customers of the corporation who where customers of the company when she was employed by the company.

Generally the company needs to show that there was a written contract between the employer and employee and that the non-solicit clause was reasonable in terms of time and scope.

It is not unusual where you may be purchasing goods that a third party has possession of, such as a warehouse or a bailee.  In such an instance, you should be clear in the contract where the delivery should be made.

Under the UCC, which covers the sale of goods, if the contract is one for goods that are identifiable and are known by both parties to be in a location that is not in possession of either party, then delivery is where the goods are located.   If you agree to purchase a car, and the car is located in warehouse owned by someone else, then the buyer has to pick up the car at the warehouse.

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