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 [...]
San Diego’s New Minimum Wage Ordinance On July 28, 2014 the City of San Diego issued a Press Release from the office of the Council President, Todd Gloria, announcing an increase in the City’s minimum wage and providing sick leave for worker’s within the City. Press Release, San Diego Increases [...]
I used crowdfunding for my startup. What happens if my business fails? So you have a really cool idea for a startup, but you don’t have the money you need to launch it. Your last $5 paid for two slices of pizza last night. You’re certain your product will [...]
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 [...]
Why is my Landlord Asking me to Sign an Attornment Agreement? Before you can understand why you are being asked by your landlord to sign an “attornment agreement,” you must understand what attornment agreement is. Black’s Law Dictionary defines the term “attornment” by reference to “feudal and old English law,” as [...]
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 [...]
Do I Have to Incorporate my Architecture Firm? Like most business people, architects start practicing their trade without giving much thought to how they might best take advantage of the many forms of business available to them. They generally hang out a shingle (if they are not working for [...]
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 [...]
Do I Need to Register my Business With the California Employment Development Department? “The Employment Development Department (EDD) administers California’s payroll taxes, including Unemployment Insurance, Employment Training Tax, State Disability Insurance (including Paid Family Leave), and California Personal Income Tax withholding. Employers conducting business in California are required to register [...]
I Don’t Want to Pay for Worker’s Comp – Do I Need It? Frequently those contemplating hiring employees ask whether they must obtain and pay for worker’s compensation insurance (sometimes referred to as “worker’s comp”) for their employees. Those same people sometimes believe that they do not need to [...]
What is California’s Victims of Corporate Fraud Compensation Fund? The Victims of Corporate Fraud Compensation Fund (“VCFCF”) is governed by California Corporations Code Sections 2280, et seq. and California Code of Regulations, title 2, division 7, chapter 12, sections 22500 through 22507. The fund was specifically created to provide “limited restitution to [...]
Tips for Forming the California Joint Venture A “joint venture” has been defined as, “[a] legal entity in the nature of a partnership engaged in the joint prosecution of a particular transaction for mutual profit…” A one-time grouping of two or more persons in a business undertaking. Unlike a [...]
What is a Registered Agent? When forming business entities, the term “registered agent” is frequently used, and there are many registered agent services available for hire in each state. So what does a registered agent do? In California, the term generally refers to the “registered agent for service of [...]
Tips for Preparing the Operating Agreement in California Pursuant to California Corporations Code Section 17701.10(a) the limited liability company’s (“LLC”) operating agreement “governs all of the following: (1) Relations among the members as members and between the members and the limited liability company. (2) The rights and duties under [the California Revised Uniform [...]
What is a Fictitious Business Name Statement? A “fictitious business name” has been defined as “[a] business name that DOES NOT include the surname of the individual owner, AND EACH of the partners or the nature of the business is not clearly evident by the name.” Fictitious Business Names, Ernst [...]
How Can I Ensure my Corporate Name is Available for Use? After deciding to incorporate your business, one of the first steps of incorporation is to decide upon a legal name for the business. For each prospective name, it is important to determine whether the name you have chosen [...]
Must I Register my Delaware LLC in California? The California Uniform Limited Liability Company Act (California Corporations Code Sections 17701.01, et seq.) governs the existence of all foreign and domestic limited liability companies in California. California Corporations Code Section 17701.02(j)defines a foreign limited liability company as: “an unincorporated entity formed [...]
What is a Certificate of Limited Partnership? In California, the Uniform Limited Partnership Act of 2008 (California Corporations Code Sections 15800, et seq.) governs the creation limited partnerships. Pursuant to California Corporations Code Section 15902.01(a), to create a limited partnership, the partners must first enter into a partnership agreement, then [...]
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 [...]
How to Write Your Business Plan All business owners and potential business owners probably understand that they will need a business plan at some point. Hopefully, they also understand that the earlier a business plan is prepared, the better for the business because, let’s face it, the business plan [...]
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 [...]
Buying an Existing Business: What You Need to Know Many entrepreneurs go into business for themselves by deciding what type of business they wish to start and then starting their business by doing all of the “leg work” for the business on their own. These self-starters generally enjoy not [...]
How do I Sell a Franchise in my Business in California? The California Franchise Investment Law (California Corporations Code Sections 31000 – 31516) (the “Franchise Investment Law”), along with Chapter 3, Subchapter 2.6, Sections 310.000 through 310.505 of the California Code of Regulations govern how franchises are sold in California. [...]
What Protections Do I Have as a Franchisee in California? On October 12, 2015, Governor Jerry Brown signed Assembly Bill 525 amending the California Franchise Relations Law (“CFRL”). The bill gave franchisees additional rights against termination of their franchises, provides significant remedies for terminations and non-renewals imposed improperly by [...]
What is a 501(c)(3) Corporation? Many times we hear radio and television advertisements seeking contributions in which a claim is made that an organization is a “501(c)(3) corporation.” These advertisements generally tell the listener to check with his or her tax advisor to determine whether donations are tax deductible, [...]
How to Draft Your Shareholder Agreement for the Professional Law Corporation so You’re Not Left Holding the Bag – The Attorney’s Fee Provision As California attorneys should already know, California follows the “American Rule” when it comes to awarding attorney’s fees in litigation, meaning that each party in a [...]
How to Protect Your Rights as a Landlord in a California Commercial Lease While many may be familiar with residential landlord-tenant law, they may not realize that there is a significant difference between what is permissible in the residential lease compared to what is permissible in the commercial lease. [...]
What Constitutes a Material Misrepresentation in a Securities Offering? California Corporations Code Section 25401 provides: “It is unlawful for any person to offer or sell a security in this state, or to buy or offer to buy a security in this state, by means of any written or oral communication [...]
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 Securities Exemptions are Available in California? Under California Corporations Code Sections 25110, 25120 and 25130, as well as federal law, it is unlawful for any person to sell any type of security unless that security has either been registered with the California Secretary of State (or the Securities and Exchange Commission) or [...]
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 [...]
Should I Incorporate my Business? Many people go into business for themselves every day, and many of them have a limited knowledge on the protections a corporation can provide. Typically, until they have some need for additional operating capital or are being sued by an unhappy customer, they seldom [...]
What are The Liabilities of a Limited Partner in California? In California the Revised Uniform Limited Partnership Act of 2008 codified in California Corporations Code Section 15900, et seq., “which became fully effective January 1, 2010” The Uniform Limited Partnership Act of 2008: Text, Drafters’ Comments, and Correlation Tables, Continuing Education [...]
What is a Patent? According to stopfakes.gov, “[a] patent for an invention is the grant of a property right to the inventor. Patents are granted for new, useful and non-obvious inventions for a period of 20 years from the filing date of a patent application, and provide the right to [...]
What is a Private Placement Memorandum? In order to raise capital, many small businesses seek investors through what are known as private placements. These “private placements” can offer limited partnership interests, common or preferred shares of stock in small corporations, bonds, or even notes. These offerings are generally exempt [...]
Does Your Partnership Agreement Need to be Updated in Light of the IRS’ New Audit Regime? On November 2, 2015 the Bipartisan Budget Act of 2015 (the “Act”) was signed into law by President Barrack Obama, which will significantly affect the audit rules for entities treated as partnerships for [...]
Can Uber Claim its Drivers are Independent Contractors? That is the question being answered in the action entitled O’Connor, et al. v. Uber Technologies, Inc., currently pending in the United States District Court for the Northern District of California, Case No CV 13-3826-EMC. According to the Second Amended Class Action Complaint, [...]
California Court Finds California Law Prohibiting Surcharges Unconstitutional California Civil Code Section 1748.1 provides: “(a) No retailer in any sales, service, or lease transaction with a consumer may impose a surcharge on a cardholder who elects to use a credit card in lieu of payment by cash, check, or similar [...]
SCOTUS Extends the Sarbanes-Oxley Protections “To safeguard investors in public companies and restore trust in the financial markets following the collapse of Enron Corporation, Congress passed the Sarbanes-Oxley Act of 2002. One of the Act’s provisions protects whistleblowers [by providing]. . . ‘[n]o [public] company . . ., or any . . . [...]
Examining California’s Workers Compensation System Since 2013, California’s Worker’s Compensation system has utilized a system of Independent Medical Review (“IMR”) to resolve disputes over the treatment of workers injured on the job. Typically, in California’s system, a request by an injured worker for medical treatment must undergo a “utilization [...]
Why Use the California Limited Liability Partnership? The California Limited Liability Partnership (“LLP”) is governed by California Corporations Code Section 16101 and California Corporations Code §§ 16951-16962. California Corporation Code Section 16951 provides: “. . . the only types of limited liability partnerships that shall be recognized are a registered limited liability partnership [...]
Using the California Limited Liability Company to Acquire Real Estate In California the Limited Liability Company (“LLC”) is a hybrid business; it is an entity that has the attributes of both the general partnership and the corporation. While the members of an LLC enjoy the freedom of management that [...]
Should I Use an Incentive Stock Option Plan? As with every aspect of business, there are pros and cons to establishing an incentive stock option plan; but before one can even make the decisions necessary, it is important to understand what an incentive stock option plan is. The incentive [...]
Quesada v. Herb Thyme Farms, Inc.; Does Federal or State Law Control Advertising a Product as “Organic”? Whether consumers may bring a state court action against the grower of herbs for fraudulently labeling its products as “organic” was answered by the California Supreme Court on December 3, 2015 in a [...]
What Material is Protected by a Trademark? Many people confuse what is protected as a trademark with copyrights and patents. Each of these terms describes a protection for very specific types of intellectual property. “A trademark is generally a word, phrase, symbol, or design, or a combination thereof, that [...]
An Overview of the Copyright Law The copyright law of the United States is governed by Title 17 of the United States Code and was enacted as the Copyright Act, Public Law October 19, 1976, as Pub. L. No. 94-553, 90 Stat. 2541 (the “Act”). The Act is the [...]
Protect Your Most Valuable Asset – The California Uniform Trade Secrets Act Does your business have trade secrets? Of course it does! Trade secrets in California means any “information, including a formula, pattern, compilation, program, device, method, technique or process” that has actual or potential value that is not known to [...]
What Factors Does the IRS Look at to Determine Independent Contractor Status? There are many definitions for the term “independent contractor.” Black’s Law Dictionary defines the term “[g]enerally, one, who, in exercise of an independent employment, contracts to do a piece of work according to his own methods and [...]
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 [...]
Should I Form a Professional Corporation for my Medical Practice? California Business and Professions Code Section 2052 provides “[a]ny person who practices or attempts to practice, or who holds himself or herself out as practicing…[medicine] without having at the time of so doing a valid, unrevoked, or unsuspended certificate…is guilty [...]
The California Corporate Securities Law of 1968 – What is it Anyway? The California Corporate Securities Law of 1968 (“Securities Law”) became effective on January 2, 1969 Marc Levin, California Corporate Securities Law of 1968: The Issue of the Nonissuer, 2 Loy. L.A. L. Rev. 87 (1969) and regulates all offers and sales of [...]
Dissecting the Software Licensing Agreement For those involved in the creation and distribution of software, the software license agreement plays a vital role in protecting the intellectual property rights of the licensor of the software. Failing to have an adequate agreement can, and generally does, lead to infringements into [...]
What Should be in my Employee Handbook? Few small businesses in California have them, but all businesses, from large corporations to the small “mom and pop” pizza joint, would greatly benefit from having a well-considered and well-written employee handbook. The well-written employee handbook is one of the best tools [...]
Must I Register my Nevada Corporation in California? After deciding that they are going to incorporate their business, many California-based founders are persuaded, for a variety of reasons, to incorporate in some jurisdiction other than California. Many decide to incorporate in the states of Nevada or Delaware, usually because [...]
What Contracts Must be in Writing - The Statute of Frauds Not all contracts are equal. While it is true that many oral contracts (that is, contracts entered into between two parties without a written agreement) are enforceable in California, many are not. In California, the Statute of Frauds [...]
How and When to Wind-Up Your California Corporation Winding-up and dissolving a California corporation is governed by the provisions of California Corporations Code Sections 1900 through 1907. How that process takes place depends largely on whether the corporation has ever done business or issued shares or whether a “voluntary [...]
The Social Purpose Corporations Act and How to Use It California’s Social Purpose Corporations Act allows entrepreneurs wishing to combine for profit businesses activity with the achievement of a social purpose. The corporation is formed by the traditional filing of Articles of Incorporation which state that the corporation is [...]
Hot Rods, LLC v. Northrop Grumman Systems Corp. - Can Extrinsic Evidence be Used to Alter the Meaning of a Contract? On November 6, 2015, the California Courts of Appeal for the Fourth District, Division Three filed its decision in the case of Hot Rods, LLC v. Northrop Grumman Systems [...]
Some Suggestions for the San Diego Shopping Center Lease Shopping center leases are as varied as the locations in which malls are located and the type of tenant seeking to lease space within their boundaries. Is the mall an outdoor mall or an indoor mall? Does it currently have [...]
What is a “Biological Material Transfer Agreement” and When to Use It A biological transfer agreement is a written contract between a provider of biological material to another, generally an entity engaged in biomedical research. The agreement is designed to govern the rights and obligations of the parties in [...]
Include an Arbitration Clause in Your Contracts to Save You Money Arbitration has increasingly been used to resolve disputes over the past twenty years. In fact, some commentators and lawyers believe that alternative dispute resolution (“ADR”) (meaning, among other used methods, mediation, arbitration, and the use of “private judges”) [...]
The Non-Solicitation Agreement; Why Use It? California has a strong public policy against restraining the ability of its citizens from engaging in their chosen professions. California Business and Professions Code Section 16600 essentially prohibits almost all forms of agreements between an employer and employee wherein the employee agrees not [...]
Should I Require Key Employees to Sign an Arbitration Agreement? Most employers, as well as other business people, have increasingly turned to arbitration agreements for a variety of reasons. Among the reasons most commonly cited is the avoidance of the cost of employment litigation and the amount of time [...]
