Business Litigation

Negotiating A Severance Package

October 27, 2017 | Jaclyn Ford

Changing employment can be a stressful, life-changing event. Severance benefits can, however, ease the transition period. With sound advice from a skilled employment law attorney, California employees and employers can both negotiate severance packages which suit their needs.

While it may seem like a severance package is simply a final lump sum figure, the reality is that it can be a complex combination of many different components. An effective negotiation begins with identifying which of those components are most important to you. For example: many employees may be concerned with continued access to health insurance, and may therefore negotiate a lower lump sum payout in exchange for continued coverage. Employers, on the other hand, may be concerned with preventing a future lawsuit against the company. These employers may negotiate a comprehensive release of liability in exchange for the employee’s agreement not to sue the company.

Some people imagine negotiations as a poker game, in which neither party reveals his or her ultimate goals. This will not result in any resolution – let alone one which satisfies both sides. Instead, it is important for each side to be clear about what is most important so that solutions can be tailored to the needs of all involved parties.

Recovering Punitive Damages In Breach of Contract Cases

October 20, 2017 | Structure Law Group, LLP

A breach of contract can be a costly expense which causes an array of legal damages to a business. In some cases, this damage can be mitigated by negotiating a settlement with the breaching party

Breach-of-Contract-300x199
in advance. In other situations, the contract must be resolved in litigation. And in the most egregious cases, a court can award a plaintiff punitive damages to deter the defendant from engaging in the behavior in the future. The experienced Los Angeles contract attorneys at Structure Law Group can help you explore all options after any breach of contract.

What are Punitive Damages?

How Do I Write The Bylaws Of A Company?

September 29, 2017 | Brett Bunnell

Of the many challenges faced when starting a business, creation of a company’s bylaws can be one of the more complex, technical, and overwhelming challenges of them all. While daunting, such agreements can protect startup companies from liability in business transactions. A Silicon Valley corporate lawyer can help your business create the bylaws which will best meet your legal needs.

Identify the needs of your business

Before crafting any corporate policy, it is important to determine your goals. Does the policy need to protect the company from legal liability? Reduce operating expenses? Provide clarity for executing important business discussions? Identifying clear goals will allow for bylaws to effectively address such needs. Owners should also be sure to consider both the short and long-term needs of the business. Business, financial, and legal concerns can change over time. Effective bylaws will allow the business to adapt to the dynamic reality of the marketplace.

Can My Business Partner Sue Me?

July 21, 2017 | Gokalp Gurer

When multiple individuals begin conducting business together, they may have effectively created a partnership, even if they didn’t intend to do so. Thus, even though partnerships can be formed without the partners actually signing a partnership agreement, the partnership and its partners become subject to state laws governing partnerships. The California business attorneys at Structure Law Group, LLP understand the laws and mechanics required to build a strong foundation for a partnership. Being careful and meticulous about the partnership formation process can also help to prevent litigation if and when a dispute arises between and among business partners.

Partnership Agreements

Although not required under California law, as discussed above, entering into a partnership agreement when forming a partnership is highly recommended. A partnership agreement is a legally binding contract that, among other things, dictates the roles of the partners and establishes guidelines for management of the partnership. In addition, partnership agreements set out how potential legal disputes will be resolved.

Bankruptcy Code – What is the “Strong Arm” Clause?

July 7, 2017 | Ryan Penhallegon

Section 544 of the Bankruptcy Code, commonly referred to as the “strong arm” clause, gives the bankruptcy trustee the rights of a secured creditor. This allows the trustee to avoid for the benefit of the debtor’s creditors transfers or obligations that could have been avoided by an unsecured creditor under nonbankruptcy law, provided such creditor exists. Generally, this allows the trustee to avoid unperfected liens and fraudulent transfers.

Section 544 of the Bankruptcy Code sets out the strong arm clause in full. Section 544 provides in relevant part that “[t]he trustee shall have, as of the commencement of the case, and without regard to any knowledge of the trustee or of any creditor, the rights and powers of, or may avoid any transfer of property of the debtor or any obligation incurred by the debtor” that could have been avoided by certain judicial lien holders or bona fide purchasers. The Bankruptcy Code can be confusing and intimidating to some. An experienced San Jose bankruptcy lawyer can help creditors understand their rights, options and risks not only with the “strong arm” clause, but the entire Bankruptcy Code.

What Claims Can Be Avoided?

What is a Teaming Agreement and is it Enforceable?

June 30, 2017 | Jaclyn Ford

Government contracts can be lucrative for many companies, large or small. Often, one company wants to bid on a government contract but needs assistance from another company to fully perform the contracted work. In such cases, the two companies would combine their resources to share the bid and the contract, if awarded. When this situation arises, it is critical to ensure that the companies have an agreement, a “teaming agreement”, stating how the work set forth in the government contract is to be divided to protect the interests of each business.

Many teaming agreements involve a large corporation acting as the primary contractor and one or more smaller businesses acting as subcontractors. Smaller businesses naturally want to protect their interests against larger corporate entities with more resources. Preparing bids can be costly and time consuming and can take focus away from other day to day operations of the business.

Unfortunately, the problem is that many teaming agreements have been deemed unenforceable by California state courts. Because a teaming agreement is signed before a contract is awarded and whether it takes effect is dependent upon winning the contract, many courts have stated that teaming agreements are “an agreement to agree” in the future instead of a binding contract. This means that a subcontractor could take the time to prepare a bid and enter into an agreement with a primary contractor, and once the government contract is won by the primary contractor, it could decide to use a different subcontractor, leaving little legal recourse for the subcontractor.

What are Escape Clauses in California Real Estate?

June 2, 2017 | Structure Law Group, LLP

Real estate transactions are complex and often involve valuable property and a significant sum of money. In a real estate transaction, both the buyer and seller of real estate have significant interests on the line they desire to protect; one way of doing this are escape clauses. Since many things can go wrong in a real estate transaction, real estate contracts include many different provisions and clauses that can come into play during the course of the deal or transaction. It is often wise to have an experienced California real estate attorney draft or review any contracts.

A real estate buyer understandably wants to be aware of the condition and known risks of the property they are purchasing and to ensure the transaction will not unknowingly cost them more money than anticipated in the long run. On the other hand, if a real estate seller enters into a contract with a particular buyer and stops soliciting other buyers, they can lose out on opportunities if that buyer suddenly backs out of the deal.

To protect buyers while also protecting the interests of sellers, many real estate contracts in California have one or more “escape clauses”. These escape clauses allow the buyer to withdraw from the transaction if certain circumstances arise and the seller has proper notice that the contract is contingent upon these clauses.

What Constitutes Undue Influence?

April 21, 2017 | Ryan Penhallegon

Every time a contract is signed, the potential exists that one party fails to perform the obligations specified under the contract. In such cases, the aggrieved party may elect to file a lawsuit to try to seek performance under the contract or, more typically, for losses incurred as a result of the other party’s non-performance. However, in some cases, there may be a defense to the enforcement of the contract. One such defense is undue influence.

Undue influence is the unfair or improper persuasion of one person by another or excessive persuasion that causes another person to act or refrain from acting by overcoming that person’s free will resulting in inequity. A party’s apparent consent to a contract (or transaction) is not free or real when it is obtained through undue influence. In other words, a contract obtained though undue influence is voidable. Consent is deemed to have been obtained through undue influence when the purported consent would have been refused if the acts constituting undue influence had not existed.

In California, there are four circumstances, prescribed by the civil code, in which undue influence occurs:

Are the Click Through Agreements for my Business Enforceable

January 20, 2017 | Structure Law Group, LLP

If your company sells products or services online, the purchase process almost certainly includes a click through agreement, also known as “clickwrap,” “web-wrap,” or “click and accept” agreements. This refers to the button the consumer must click to indicate they accept all of the terms of the sale. If they choose not to accept, the sale will not go through. This agreement often includes intellectual property protections for the company, license restrictions, liability limitations, disclaimers involving warranties, among other standard contract terms.

The large majority of online consumers often click through without carefully reading the terms of the agreement. If a consumer later contests a term in the click through agreement, will a court uphold and enforce the terms of the initial agreement? This is important to know, as an unenforceable agreement can result in liability and losses. Consulting with an e-commerce attorney is the best way to guarantee a legally binding contract.

Court Ruling on “Shrinkwrap Agreements”

Alter Ego Liability in California

January 13, 2017 | Katya Mezek

One of the primary benefits of incorporating your business and complying with corporate governance laws is that a corporation provides personal liability protections for its owners from the debts and liabilities of the corporation. These protections exist because a corporation is viewed as an entity that exists separate from its owners and this creates a “corporate veil” which is intended to protect the shareholders from personal liability. However, there are some circumstances in which an injured party may hold shareholders personally responsible for the debts or actions of the corporation. This is commonly referred to as either “alter ego liability” or “piercing the corporate veil.”

Generally speaking, when a party sues a corporation, that party seeks money from the corporation and not from shareholders as individuals. In some situations, however, owners may simply be using a corporation as an “alter ego” for themselves and they do not actually treat the corporation as a separate legal entity. In such cases, a party suing the corporation may pierce the corporate veil and try to hold the owners personally liable as well. While successful alter ego liability is rare, it does occur and all corporate owners should take steps to avoid it whenever possible.

Signs of “Alter Ego” Corporations