San Diego Business Contracts: Using Cost-Adjustment Clauses to Reduce Risks If your San Diego business is contemplating a long-term contract that involves materials and supplies, you might consider adding a "cost-adjustment" clause to the contract to reduce risks from market price fluctuations. With a long-term contract — one that [...]
How California Courts Interpret Contracts It can be said that all San Diego and California businesses "run on contracts." This article discusses the way(s) in which California courts interpret contracts if there is a dispute between the parties. This is important because, when drafting a contract, it is crucial [...]
San Diego Employee Non-Disclosure Agreements: What Should They Contain? The purpose of San Diego and California non-disclosure agreements ("NDA") is to protect your business and its commercially valuable trade secrets. Trade secrets and confidential information are often the key to keeping and expanding your company's market share. We have [...]
Non-Solicitation and Non-Acceptance of Business Clauses are Not Enforceable in San Diego As many San Diego and California businesses know, non-compete agreements are not enforceable in California. That is, except for a few limited circumstances, you cannot enforce any agreement by which an employee agrees not to compete against [...]
What is an Integrated or Partially-Integrated Contract? Merger Clauses Part II When dealing with complex San Diego business contracts like business purchase agreements, it is not uncommon for there to be several drafts and re-drafts of the final contract. As we discussed previously on this blog, a well-drafted business [...]
How Insurance Can Make a Buy-Sell Agreement "Easy" for Death or Disability For small San Diego and California businesses, it is important that the owners agree early in the process to a buy-sell agreement. This applies whether you are running your business as a general partnership, a corporation, a [...]
Can I Still be Liable for Rent if I Vacate My San Diego Commercial Space Early? Under California law, a commercial tenant who breaks a commercial lease by vacating the space early can be held liable by the landlord for unpaid rent. Commercial tenants should remember that commercial leases [...]
Confidentiality Clauses in San Diego Business Contracts (Part I) It is not uncommon to find confidentiality clauses in business contracts. Such clauses come in two varieties - confidentiality with respect the agreement itself and/or the contents of the agreement, and confidentiality with respect to commercial information and trade secrets [...]
Non-Compete Agreements in San Diego: When are They Valid? In general, under California law, a current employer cannot restrict an employee from leaving and taking another job, even with a competitor. In many states, employers are allowed use so-called "Restrictive Covenants" or a "Non-Compete Agreements" to prevent an employee [...]
What are "Liquidated Damages" in San Diego? A provision for liquidated damages is a way to specify damages in the absence or inability of actually calculating damages, or when such damages would be difficult to calculate. The advice and counsel of a good corporate lawyer is needed if you [...]
What is a UCC Lien Filing? If your San Diego business is contemplating a small business loan or a business line of credit or some similar form of general financing, then your lender will require some sort of collateral. In a residential housing example, when you take out a [...]
San Diego Businesses: Tips for Avoiding Litigation Litigation is expensive and time-consuming. It is costly in terms of legal bills, litigation costs, and lost productivity. Furthermore, if there is an adverse result, then there are the costs of paying the judgment. Litigation can kill a startup and seriously undermine [...]
New IRS Audit Regime in Effect: Reviewing Your Partnership/LLC Agreement Effective January 1, 2018, new guidelines went into effect with respect to partnership audits by the Internal Revenue Service. See Forbes article here. While no partnership or LLC that has chosen to be taxed as a partnership wants to [...]
Every Business Needs a Good Contract Management Method Even if you are just starting your new San Diego business, you are already beginning to accumulate contracts. Contracts are anything whereby you and your business agree to obligations that can be enforced in a court of law or court of [...]
E-Commerce Means Needing a Terms of Service Agreement for Your Website If you are running a San Diego business, you need a Terms of Service, sometimes called a Terms of Use, Agreement for your website. This is essential for two broad reasons - controlling how users access and use [...]
Buying or Selling San Diego Business Assets? California’s Bulk Sales Act If you are planning on selling your San Diego business or if you are in the market to purchase one, you should be aware of the California Bulk Sales Act (hereinafter "CBSA"). See Cal. Comm. Code, §6101(a)(3). The [...]
Five Ways to Avoid a Nasty Business Divorce You start up a new business here in San Diego with some friends and colleagues. Everything seems great at the beginning, but despite everyone's best efforts, it is just not working out because of different visions of where the business should [...]
Buying a San Diego Business: How to Avoid Successor Liability If you are thinking of buying a business in San Diego or elsewhere in California, it is important to know what liabilities and debts of the seller you are agreeing to pay and what liabilities and debts you are [...]
Tips on Winning an Independent Contractors/Consultant Tax Audit If your San Diego or California business has independent contractors and/or consultants, you may be subject to an audit by taxing authorities to determine whether you have purposely or inadvertently misclassified your employees as independent contractors/consultants. This is NOT an audit [...]
Buying or Selling a San Diego Business: Dealing With the Commercial Lease If you are buying or selling a business in San Diego, one of the most important aspects of the transaction is often handling the transfer/assignment of the commercial lease. Many businesses in San Diego and California rent [...]
San Diego Business Law: Using an "Account Stated" to Ensure You Get Paid We wrote recently about how San Diego and California businesses can use written contracts to help them get paid fully and paid in a timely fashion. In this article, we address how your business can create [...]
San Diego Corporate Law: Revisiting What is a Security and Securities Fraud Offerings and sales of securities in California are governed by both federal and California securities laws -- the Corporate Securities Law of 1968 (Corp. Code, §§ 25000-25707) and the federal Securities Act of 1933 (15 U.S.C. § 77b). If you are offering [...]
San Diego Closely Held Companies: 10 Must-Have Provisions in Your Buy-Sell Agreement A buy-sell agreement is a contract made among the owners of a business or company that governs how, under what circumstances, and at what price a given owner's interest in the business/company may be purchased by the [...]
What is a Pre-Incorporation Agreement? If you are thinking about starting up a new business in San Diego with some friends, or maybe you have decided it is time to move from a partnership into a more formal corporate entity, it is often wise and useful to have a [...]
What Should be in Your Severance Pay Agreement? Many San Diego and California businesses have employees. Occasionally, despite the best wishes and efforts of the business owners, employee layoffs and terminations are necessary. This happens for many reasons. Sales were just not high enough, changes in consumer preferences and [...]
California and San Diego Businesses: What is a Statute of Limitations? For San Diego and California businesses, there are laws that limit the amount of time that any person has the right to file a lawsuit. Such laws are called statutes of limitations. The time periods vary depending on [...]
San Diego Business Law: What is the Joint Employer Doctrine? Let's say you are running a pharmacy in San Diego. Let's call it San Diego's Best Drug Store. Like many businesses, San Diego's Best Drug Store has customers who want over-the-phone, on-demand, and speedy delivery of their products. Many [...]
San Diego Business Law: Preventing Raids on Your Employees (Part II) We wrote earlier about steps to take to prevent raids on your employees when a high-level, managerial employee is departing. See here. A recent case out of Wisconsin gives us an opportunity to review, update, and provide additional [...]
San Diego Businesses: Finding Workers in the "Gig" Economy Most San Diego and California businesses know about the so-called "gig" economy. Maybe you have hired a few "gig" workers here and there. In general, a "gig" worker is a short-term independent contractor. Given certain structural elements in the national [...]
San Diego Corporate Law: Keeping Biometric Data Private and Secure We wrote recently about how all San Diego and California businesses must ensure the privacy and security of customer data. See our discussion here. As we noted, your computers and networks are prime targets for criminals seeking to hack [...]
San Diego Business Law: What is a Breach of Warranty? All San Diego and California businesses want to "do good" by their customers, want to provide products and services that meet their customers' needs and keep them happy. This is the basic method of running a successful business and [...]
New California Labor Law: Impacts on Selling/Buying Your San Diego Business As the calendar turned to 2018, many new California laws went into effect. See LA Times news report here. Among the new laws was a provision that now prohibits private and public employers from seeking information on a [...]
Checklist for Limiting Personal Liability When Running Your San Diego Business When you are in business, there are many steps that you can take to limit your personal liability and your family's liability for business debts and obligations. We here at San Diego Corporate Law can help you with [...]
Selling or Buying a Business? Valuation Methods When you want to sell your San Diego small business or professional practice, or if you are in the market to purchase, at some point, everyone will have to decide how much the business is worth. This is obviously important for the [...]
Top Reasons Partnerships Fail Surely everyone can agree that starting a business or being in a San Diego business with friends as partners can be rewarding at a personal or emotional level as well as an economic level. You and your friends enjoy each other’s company, share common visions [...]
What is the Legal Doctrine of "Surviving The Closing?" When you are buying or selling a San Diego business, there will be a sales contract. Among the provisions of sales contract will be various “representations and warranties” made by the various parties. A “representation” is a factual statement. A [...]
Buying a San Diego Business? Four Must-Have Seller Representations and Warranties When you are buying a San Diego business, there will be a sales contract that sets out all of the covenants and conditions of the sale. In the sales contract, your trusted and experienced California corporate attorney has [...]
San Diego Corporations: What are Shareholder Rights? When you become a shareholder of a San Diego corporation or any corporation in California, you become an owner of some interest in the company. As an "owner," you have certain rights, just like the owner of land has certain rights, like [...]
San Diego Business Law: What is an Unpaid Internship? Unpaid internships can be beneficial to both the young intern and to the San Diego business "hiring" the intern. But businesses must be careful because under some circumstances, the "intern" might be considered an "employee" who must be paid for [...]
What is a Buy-Sell Agreement for a San Diego Business? For small businesses with only several owners, a buy-sell agreement establishes up front the terms and conditions under which owners can be bought out, and at what price and under what conditions. Buy-sell agreements are essential for closely-held and [...]
Doing Your Due Diligence When Buying a San Diego Business Doing Your Due Diligence When Buying a San Diego Business When contemplating buying a San Diego business, as the buyer, you must always engage in what is called "due diligence" before finalizing the purchase. Basically, due diligence is research [...]
California Mergers and Acquisitions: Reasons to Assume the Target's Debt In the news recently is the announcement by fast-food chain Arby's Restaurant Group that it will acquire Buffalo Wild Wings for $2.4 billion in cash. The deal calls for Arby's to pay $157 per share in Buffalo Wild Wings [...]
San Diego Business: Using Attorneys' Fees Clauses to Your Advantage We here at San Diego Corporate Law believe that, when possible, every San Diego business should use their business contracts to their advantage. That includes the use of attorneys' fees clauses with teeth. California Corporate Law: What is an [...]
Contract Law: Can You Shift a Burden of Proof Via Contractual Provision? Contracts are essential to San Diego and California businesses. Generally, contracts are intended to simply facilitate operations such as purchasing supplies and services, making sales, and locking in employees. Sometimes contracts can be used -- and should [...]
What are Estoppel Certificates? When you are running a business in San Diego or anywhere in California, your business likely has many contracts and agreements. These include leases that you might have for retail or office space and might include vendor and supplier contracts. Likewise, any sort of financing [...]
What to Expect When Selling Your San Diego Business When selling your San Diego or any other California business, there are basically three stages in the process -- sometimes a fourth stage if you have agreed to provide post-sale training or have agreed to other post-sale obligations. Here is [...]
San Diego Business Contracts: The Importance of Including Severability Clauses Sometimes, despite the best efforts of your talented business attorney, a court examines a contract and determines that some provision in the contract is void or unenforceable. This happens sometimes because of a change or clarification in the law [...]
California Business Contracts: What is the Merger Doctrine? San Diego and California businesses largely operate on the basis of contract law. Often, the contracts are simple and pre-printed; other times the contracts are lengthy and complicated. Likely, the longer contracts went through several versions and had many revisions. If [...]
San Diego Businesses: Using On-Time Payment and Interest Clauses With any contract in which payment is not due on delivery -- typical vendor and service contracts, for example -- it is essential to communicate in the contract the expectation that payment will be made on time; monthly interest provisions [...]
The Value of Mediation as an Alternative to Litigation As we have said in the past, every San Diego and California business can expect to have business-related legal disputes at some point. Disputes arise not necessarily because someone is behaving badly, but often are because mistakes happen or circumstances [...]
California Contract Drafting: Employee vs Independent Contractor Many San Diego and California businesses have employees and many have independent contractors, and some have both. Whether a worker is considered an "employee" or an "independent contractor" has important implications for many aspects of a business including: Labor laws Taxation -- [...]
How Talented Legal Counsel Can Help Your Business Grow Every business needs a talented and experienced business lawyer. Aside from providing good advice, a talented and dedicated business lawyer is actually "good for business" and can help your business grow. Here are the ways that we here at San [...]
YouTube and Specific Performance in California (Part II) With respect to business contracts in California, if there is a breach of contract, sometimes the remedy of "specific performance" is available. Cal. Civ. Code, § 3384 provides that "[e]xcept as otherwise provided in this Article, the specific performance of an [...]
What is Specific Performance in San Diego? (Part I) With respect to business contracts in California, "specific performance" is one of several remedies that a San Diego business can seek for breach of contract. For this part I on specific performance in California, here are a few basic legal [...]
California Businesses: Yes, You Can Limit the Right to Sue Generally speaking, business contracts serve two purposes - one, to effectuate your deal and, two, to limit your risks and legal liability as much as possible. One of the best ways to limit your legal liability is to obtain [...]
Breach of Contract in San Diego: The Types of Damages Available If you are running a business in San Diego or in any other part of California, you are constantly dealing with contracts. Hopefully it is rare, but at some point, you may end up in a contract dispute. [...]
Six Mistakes to Avoid When Running the Family Business A family-owned and family-run business in San Diego should be treated as seriously as any other business. In San Diego County, California, there are six mistakes to avoid when running your family business. Failure to Get Permits, Licenses, and Registrations [...]
When is a San Diego Contract Voidable Because of Mistake? There are many defenses to a breach of contract lawsuits in California. One of them is mistake. A mistake can be unilateral, made by only one party to the contract, or bilateral, made by both parties. Excellent and trusted [...]
What is the Parol Evidence Rule? If your San Diego business has signed a contract for, say, exploration and development of natural gas and oil on certain lands, but a dispute arises over the contract, then you will likely end up in court. The parol evidence rule is a [...]
Who can Sign Contracts for My San Diego Business? Most business contracts are made in writing and, occasionally, the question arises: Who can sign contracts for my business? In short, the answer is owners and anyone who the owners authorize to sign contracts on behalf of the business. In [...]
Can a San Diego Business Really Accept an Offer by Silence? As we have recently discussed here, the basics of contract formation are offer, acceptance, and consideration which creates a meeting of the minds. Generally speaking, "acceptance" is saying or writing or acting in some way that expresses agreement [...]
San Diego Business Contracts: What is a "Time is of the Essence" Clause? You sometimes see a clause in a California business contract that simply says: "Time is of the essence." You may ask yourself: What does that mean? In basic terms, a contract provision stating "Time is of [...]
San Diego Businesses Trading With Mexico? What is The Convention for the International Sale of Goods? Many San Diego businesses are familiar with basic California business law and business contracts. Many are familiar with the Uniform Commercial Code. But what is CISG? That is an acronym that stands for [...]
Expelling a Member of a San Diego LLC: You Should Revise Your Operating Agreement When you start your new business, everything seems perfect. But times change and now you have this troublesome member of your LLC. You ask yourself: How do I expel a member of my LLC? As [...]
How are Government Contracts Different? Recently, we here at San Diego Corporate Law have written about various aspects of corporate and business law including the need for and importance of having written contracts. We occasionally get questions from clients about government contracts and how those contracts are different. Because [...]
Executive Employment Agreements Require Special Attention With San Diego employment contracts for regular employees, there are the standard provisions regarding job duties, dress code, anti-harassment and discrimination provisions, etc. However, with executive level employees, a well-drafted and well-considered employment agreement is essential both to protect your business and the [...]
What is a Letter of Intent? In general, a letter of intent is a shortened version of a longer contract that is expected to be written covering all the aspects of a complex deal. Sometimes, the letter of intent can become the actual final contract and, if all the [...]
Tips for Starting Your Own San Diego Holiday Pop-Up Shop The holiday season is upon us. Along with everything else cheery and bright, the holiday season brings an infusion of pop-up shops. Some San Diego bars are converting to themes for the winter holiday and New Year’s and national [...]
The Duty to Mitigate Damages The duty to mitigate requires a party suffering a breach of contract to take reasonable steps to mitigate those damages. In general, if you or your business suffers a loss or is damaged because a third party has breached a contract, you have the [...]
When is "Lack of Consideration" a Defense to Breach of Contract? As we wrote more fully here, a legally enforceable contract requires three main ingredients: offer, acceptance, and consideration. "Consideration" is something of value exchanged to make a contract legally binding. "Lack of consideration" is a valid defense to [...]
What is a Release? As the name would imply, a "release" is a legal document, or sometimes a paragraph in a contract, that releases or gives up some legal claim or right. Releases are used in many areas of the law: Litigation: settlements and release of claims Property law: [...]
Impossibility as a Defense to Breach of Contract Sometimes events happen that make it impossible for a business to meet its obligations under a contract. In true situations of impossibility, impossibility becomes a defense to a claim for breach of contract; that is, the courts will say that [...]
The Implied Covenant of Good Faith and Fair Dealing Every business contract -- indeed, every contract -- contains an implied covenant of good faith and fair dealing. Breaching this implied covenant can subject your business to litigation and to damages. A good business lawyer can help. What is the [...]
The Importance of Written Contracts: Avoiding Vague and Uncertain Terms Any good business lawyer will counsel a business owner on the need for written contracts. One important reason for reducing your agreements to writing is to avoid vague and uncertain terms that will not or cannot be enforced [...]
What is the Difference Between the Duty to Indemnify and the Duty to Defend? Many business contracts include duty to indemnify and duty to defend provisions. The question arises: What is the differences between the two duties? This article delineates important differences. In short, the two duties are [...]
What is a Breach of Contract? In every aspect of running your business, you are constantly dealing with contracts. So, what is a “breach of contract?” In theory, the legal concept is common-sense: You have breached the contract if you fail to do what you agreed to do. [...]
Advantages for California Businesses Using Arbitration Clauses As a mechanism for alternative dispute resolution, arbitration has many advantages for California businesses. Serious consideration should be given to including arbitration clauses in all California contracts. What is Arbitration? Arbitration is an out-of-court process for settling disputes that might commonly [...]
Examples of Biotechnology Agreements and Why They are Important The growing biotechnology industry can be a minefield of legal issues for scientists and the companies they start, seeking to protect their investments and grow their business. One common topic that every biotech founder should consider is how to prevent [...]
Beginning a Business Relationship with a Vendor In the rush to court a new vendor, companies may be tempted to quickly sign a standard form agreement and begin work immediately. If you find yourself caught up in the rush, take a step back, properly investigate, and negotiate your relationship [...]
What Are the Most Important Contract Terms for Tech Companies? Technology companies, especially those with active websites or e-retail portals, will want to have a well-drafted set of contracts in place to keep their business running smoothly from a legal perspective. These contracts cover a variety of topics: terms [...]
Can I Use Electronic Signatures on a Contract? Whether you can use electronic signatures to bind parties to a legally enforceable contract in California depends on the parties’ agreement and the method of signature. Be careful to fulfill the below requirements, or a court might find that the agreement [...]
What is a “Unilateral Contract”? Ordinarily a contract is defined as an agreement between two or more parties “which creates an obligation to do or not to do a particular thing. Its essentials are competent parties, subject matter, a legal consideration, mutuality of agreement and mutuality of obligations.” Black’s Law Dictionary 291-292 [...]
A competitor is interfering with my business. What can I do? You have an idea for a tech startup and the software you’re developing is awesome. Founded along with a college buddy, the company grows quickly once you both graduate. You incorporate and secure an investor. You use some [...]
When can I revoke an offer in California? Most people, even the savviest entrepreneurs, second-guess their decisions every now and then. Especially when it involves money. The whole you-have-to-spend-money-to-make-money adage is likely true for startups who incorporate and ultimately put a product out on the market. But an entrepreneur [...]
The Defense of Duress - What is it? The defense of duress is not unusual in criminal cases. It’s when a defendant says he or she was forced to commit a crime by another person. In criminal law, an offense is sometimes excused if a jury believes the defendant [...]
Can I Get Punitive Damages for Breach of Contract? Black’s Law Dictionary defines the terms “[e]xemplary or punitive damages” as “damages on an increased scale, awarded to the plaintiff over and above what will barely compensate him for his property loss, where the wrong done to him was aggravated by circumstances [...]
Can I Assign my Contract in California? The simple answer is, as it is in response to many questions in the law, it depends. It first depends upon how the term “assign” is used. In McCown v. Spencer (1970) 8 Cal.App.3d 216, 225, 87 Cal.Rptr. 213, the California Courts of Appeal [...]
What Can I Do if my Vendor Tells Me He Won’t Perform His Obligations? You entered into a requirements contract (see https://sdcorporatelaw.com/business-newsletter/what-is-a-requirements-contract/) with your vendor to purchase 500 widgets per month for the next 24 months. In month 14 of your contract, your vendor calls and tells you that beginning [...]
What Kind of “Writing” Satisfies the Statute of Frauds? California Civil Code Section 1624, commonly referred to as the Statute of Frauds, provides that certain “contracts are invalid, unless they, or some note or memorandum thereof, are in writing and subscribed by the party to be charged or the [...]
My Contract has Been Breached – Do I Have to Perform my Promises? California Civil Code Section 1440 provides, “[i]f a party to an obligation gives notice to another, before the latter is in default, that he will not perform the same upon his part, and does not retract such [...]
What is “Consideration”? We’ve all signed countless contracts in the past for a variety of reasons and most of them contain, usually in the first few paragraphs, the phrase “for good and valuable consideration, the receipt and adequacy of which is hereby acknowledged.” For the most part, we generally pay [...]
When Does the Risk of Loss Pass to a Purchaser of Goods in California? As with many things in law, the answer to a question like, “When does the risk of loss pass to a purchaser of goods in California?” is “It depends”. When one enters a store and [...]
What is a Requirements Contract? Many entrepreneurs engaged in the manufacturing of goods for sale must rely on others to provide the raw materials from which those goods are manufactured. When the manufacturing process relies on small quantities of these raw materials, or where these raw materials are common [...]
What is a Contract of Adhesion? Whether we realize it or not, we have all agreed to a contract of adhesion dozens, if not hundreds of times. Indeed, each time we agree to the terms and conditions attached to the latest update to our iPhone’s operating system, we are [...]
What Should be in an Agreement for the Sale of Goods? While the California Commercial Code (California’s version of the Uniform Commercial Code) may govern the sale of goods in California, where the prices for the goods exceeds $500.00, an agreement not in writing may not be enforceable. To [...]
Why am I Being Asked to Sign a Personal Guarantee? We’ve all heard that one purpose for incorporating a business is to protect the owner’s personal assets from any debts incurred by the business. Although that reason is completely valid, in some instances, forming a corporation may mean that [...]
Tips for the Product Development Agreement Imagine you’ve spent thousands of dollars and countless hours researching and designing a better hydrogen cell battery for use in the automotive industry and have been in contact with a manufacturer who has agreed that your battery will revolutionize the industry and, the [...]
The Right to Publicity – What Does it Protect? Anyone who has watched the news, seen the National Enquirer, or surfed the internet knows that the likenesses, photographs and endorsements of celebrities are used constantly in effort to sell various products to the masses. Usually, the celebrities whose name [...]
What is a Subordination Agreement? If you have ever purchased real property in California using money from a bank or other institutional lender, have obtained a second loan secured by the property, then refinanced the first loan to reduce your payments, you have most likely seen what is known [...]
The Personal Services Contract in California Everyone knows and understands that slavery and involuntary servitude were abolished in the United States in 1865 by the passage of the Thirteenth Amendment to the Constitution. Something of a corollary to the Thirteenth Amendment was enacted in California in 1872, which provided [...]
