Contracts

New York Independent Contractor and Consulting Agreements

by Fred Abramson

New York Independent Contractor and Consulting AgreementsAs an inde­pen­dant con­trac­tor, there is no employer-employee rela­tion­ship with the per­son or com­pany that you are doing busi­ness with.  The inde­pe­dent 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 ind­pen­dent con­trac­tor can have dire tax consequences.

In your inde­pe­dent 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.

Why You Need to be Clear About The Subject Matter When Drafting Contracts

by Fred Abramson

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.

What to do if a Former Employee Solicits Customers?

by Fred Abramson

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.

How are goods delivered if someone else has possession of them?

by Fred Abramson

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.

Sample Multimedia Agreements

by Fred Abramson

Look­ing for the right mul­ti­me­dia agree­ment for your business. Here is a list of some of the Agree­ments that my office can draft for you.

  • Copy­right Assignment
  • Work for Hire Agreement
  • Moral Rights Waiver
  • Copy­right Per­mis­sion letters
  • Fram­ing Agreement
  • Cease-and-Desist Let­ter for Trademarks
  • Nondis­clo­sure Agreements
  • Sub­mis­sion Agreement
  • Mutual Non-Disclosure Agreement
  • Right of Pub­lic­ity Agreement
  • Model Release
  • Employ­ment Agreement
  • Employee Nondis­clo­sure Agreement
  • Web­site Pri­vacy Agreement
  • Con­sult­ing Agreement
  • New Employer Letters
  • Soft­ware Devel­op­ment and Pub­lish­ing Agreements
  • Title Devel­op­ment and Pub­lish­ing Agreements
  • Ghost­writer Agreements
  • Beta Site Test Agreement
  • Pro­to­type License Agreement
  • Web­site Devel­op­ment Agreement
  • Online Pub­lish­ing Agreement
  • Inter­na­tional Dis­tri­b­u­tion Agreement
  • Co-Branding Agree­ment
  • Web­site Terms of Use Agreement
  • Video Clip License Agreement
  • Music Video License Agreement
  • Music Sam­ple Agreement
  • Soft­ware Acqui­si­tion Agreement
  • Soft­ware Licens­ing Agreements
  • Shrink-Wrap Licenses
  • Videogame Pro­fes­sional Ser­vices Agreements
  • Videogame Con­fi­den­tial­ity Agreements.

What Can You Sue For? Basic Contract Damages

by Fred Abramson

What Can You Sue For? Basic Contract DamagesIf you are suing for a breach of con­tract you are prob­a­bly won­der­ing what money can you col­lect.  You could also be won­der­ing if there is any other relief that you can obtain from the court. Listed below are the basics of what you can sue for in a breach of con­tract case:

  1. Com­pen­satory Damages.
  2. Con­se­quen­tial Damages;
  3. Liq­ui­dated Damages;
  4. Injunc­tions and other Equi­table Relief.

COMPENSATORY DAMAGES:

If you can prove your breach of con­tract claim, then the judge usu­ally awards com­pen­satory dam­ages.  The pur­pose of com­pen­satory dam­ages it make the plain­tiff be in the same place as if the con­tract had been performed.

CONSEQUENTIAL DAMAGES:

If you can prove that the other party knew or could have fore­seen when the agree­ment was made, you can recover con­se­quen­tial damages.

One com­mon issue in a breach of con­tract case regard­ing con­se­quen­tial dam­ages is whether you can recover for lost prof­its.  The gen­eral rule is that you can only recover for lost prof­its if this issue was rea­son­ably fore­see­able when you signed the con­tract and the other party knew of your cir­cum­stances or if it is expressly writ­ten in the con­tract. For exam­ple, if you plan on open­ing a restau­rant, and the party that you con­tracted with failed to install a stove, you may be able to recover con­se­quen­tial damages.

LIQUIDATED DAMAGES

When dam­ages will be dif­fi­cult to assess if a con­tract is breached, you can agree to a liq­ui­dated dam­ages clause in your con­tract. A liq­ui­dated dam­ages clause will state the amount of dam­ages that will be paid if there is a breach.

INJUNCTIONS:

If mon­e­tary dam­ages are insuf­fi­cient, the judge has the power to order an injunc­tion, attach­ment, spe­cific per­for­mance and rescission.

For more reading:

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What Can You Sue For? Basic Contract Damages

What To Do If An Owner of A Business wants to Transfer its Interests

by Fred Abramson

What To Do If An Owner of A Business wants to Transfer its InterestsNew Yorker\‘s are a mobile bunch. Espe­cially New York busi­ness own­ers. Busi­ness open and close every day.  It is risky to believe that your co-owners will still be with you five years down the line. It is likely that there will come a time when of your co-owners will want to sell his shares or inter­ests in the com­pany to some­one else.  One of the most com­mon ways that a small busi­ness can get dis­rupted is when an owner desires to sell or trans­fer his inter­ests in a com­pany. So, what should you do?  You should cre­ate in advance a method for the own­ers to review and block any that is not in the best inter­ests of the com­pany.  Here are some things you should think about:

  1. Right of First Refusal. This is the most com­mon pro­vi­sion in a buy-sell agree­ment. The owner who wishes to sell his inter­ests first offers it to his co-owners before any­one else.
  2. Decide the Price of the Own­er­ship Inter­ests in Advance. Often the price will be set at the price a pro­posed out­side buyer has bid.  I do not rec­om­mend this option because a fraud­u­lent offer is pos­si­ble. Another method is to set a pre-determined price at the time a buy-sell agree­ment is drafted.  Another option is to set a high down pay­ment price which would show good faith.
  3. Make clear the effect of any sale on Minor­ity Own­ers. Often a right of first refusal pro­vi­sion may freeze out a minor­ity owner from sell­ing his inter­ests.  As a result, it may be impor­tant to include a \“Right to a Forced Sale\” clause.
  4. Decide who can buy the inter­est. Should the com­pany have the right to pur­chase shares or the indi­vid­ual owners?
  5. Should an owner be able to give away his inter­est? Often own­ers wish to grant their inter­ests in a com­pany to a trust for estate plan­ning rea­sons. This could be prob­lem­atic because tech­ni­cally the trust would own the shares of the busi­ness. Often these issues are addressed when draft­ing a buy sell agreement.
  6. No Trans­fer Restric­tions. Refus­ing to trans­fer any own­er­ship inter­est is another pos­si­bil­ity. This can lim­ited in a few dif­fer­ent ways, such a no trans­fers to cer­tain per­sons and no trans­fers with­out writ­ten con­sent of the other owners.

You should decide in advance what to do if an owner of a busi­ness wants to trans­fer its inter­ests through a buy sell agree­ment to avoid unnec­es­sary prob­lems and poten­tial litigation.

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What To Do If An Owner of A Business wants to Transfer its Interests

Checklist for sale of a business

by Fred Abramson

If you are plan­ning to sell or buy the assets of a cor­po­ra­tion, before you go to your lawyers office you should pro­vide the answers to the  fol­low­ing questions:

  • Names and addresses of every­one involved in the sale
  • All assets and prop­erty that will be in part of the sale
  • What monies are being paid?
  • What are the debts and lia­bil­i­ties of the company?
  • Will the con­sid­er­a­tion be paid in install­ments or a lump sum?
  • When will pay­ment be due?
  • Have all due dili­gence doc­u­ments been obtained?  For exam­ple, have you inspected the books, prop­erty or busi­ness records?
  • Agree on a clos­ing date
  • Are there any warranties?
  • Any intel­lec­tual prop­erty, such as the use of the com­pany name be transferred?
  • Who pays any poten­tial taxes?
  • Are there any employee agreements?
  • Are there any leases?
  • What hap­pens if one party defaults?
Checklist for sale of a business

What happens if there is an ambiguous term in a contract?

by Fred Abramson

Q:   What hap­pens if you enter into an Agree­ment and there is ambigu­ous language? What happens if there is an ambiguous term in a contract?

A:   If the per­son mak­ing the offer means one thing and the per­son accept­ing the offer rea­son­ably means another, then there is no con­tract.  Be aware that just because you failed to put some­thing into a con­tract or there was a mis­take, does not mean it the con­tract is ambiguous.

The court looks at the con­tract as a whole to deter­mine whether a con­tract is ambiguous.

Remem­ber, courts only enforce con­tracts, they will not re-write them.

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What is a void or voidable contract?

by Fred Abramson

In New York, a void con­tract is sim­ply no con­tract at all. It binds nei­ther party.  If you enter into a void con­tract, noth­ing more has to be accom­plished on your part.  It is bind­ing by nei­ther party and can­not be ratified.

Con­tracts that are usu­ally con­sid­ered void­able when one of the par­ties has the abil­ity either to avoid or val­i­date the agreement.

Once you per­form the duties and oblig­a­tions of a con­tract, it can­not be con­sid­ered voidable.

For more infor­ma­tion on void or void­able con­tracts, con­tact me at 212–233-0666.

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What is a void or voidable contract?

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