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Thursday, September 28, 2017

Oral Contracts & the Statute of Frauds

Oral Contracts & the Statute of Frauds

 

There is a widespread misconception that verbal contracts are unenforceable.  Nevertheless, a contract made orally with another party, without embodying the particular terms in a signed writing, can still be valid and binding. Even so, any disagreement concerning the deal may pose multiple problems for both parties.  In order for the court to give a verbal contract legal effect, the terms of the deal will have to be demonstrated. This could involve pricey litigation and an extensive discovery process.  Therefore, it is advisable to have an attorney draft any contractual agreement.

Moreover, according to the Statute of Frauds, there are certain contracts that must be in writing in order to be legally binding.  This may include contracts for the sale of land or real estate, surety agreements, in which one person guarantees to take over another's contractual obligations, and service agreements that take over one year to complete.  Other agreements that must be written to be legally binding may include agreements “made in the consideration of marriage,” or those made for the sale of goods valued at $500 or more. If the requirements for contractual validity are not met, either party runs the risk of the other party rescinding the contract by declaring it void.

The Statute of Frauds not only aims to prevent deception or fraud; it requires precise terms to be set in writing for a contract to be valid. The Statute of Frauds typically requires the document to include a description of the “subject matter” of the agreement, the main stipulations to the deal, and the signatures of the parties.  Nevertheless, these requirements may vary with the sale of goods under the Uniform Commercial Code, where a signature by the “party to be charged” may be sufficient.  For a sale of goods, the terms typically should include the price and quantity of the goods. 

Sometimes, if the contract is unenforceable under the Statute of Frauds, it may be saved if one party suffered by relying on the contract and if the injured party can prove this reliance in court.  Likewise, an exception may exist if “specially manufactured goods” were provided under the contract or one party “partially performed” what was required by the agreement.  The outcome may also vary if two merchants were the contracting parties.  Seek advice from a licensed business law and contract attorney to evaluate agreements and determine whether they are legally enforceable. 


Monday, September 18, 2017

Benefits of Incorporating in Safe-Haven States

The Benefits of Incorporating in Safe Haven States

Many business owners believe it's best to incorporate in their home state, but there are often business and tax advantages available in other states. In particular, Delaware and Nevada are attractive to those who are looking to form a corporation. These so-called corporate haven states are considered to be business friendly.

The State of Delaware is well regarded for its supportive business and corporate laws, said to be among the most favorable in the United States. In addition, the state has a judicial body, the Court of Chancery, that is dedicated to business matters. This exclusive focus allows the court to hear cases quickly and efficiently.

Delaware also features a government agency that is focused on supporting businesses, the Division of Corporations. In particular, this agency has streamlined procedures for incorporating that allow businesses to hit the ground running. The Division boasts long hours and provides new businesses with easy access to important resources.

Lastly, the tax law in Delaware is amenable to corporations. A corporation that is formed, but does not conduct business, in the state is not liable for corporate income tax. Moreover, there is no personal income tax for those domiciled in the state or for shareholders that do not reside in Delaware.

Nevada is the second most popular state in which to incorporate. The state's business law affords favorable treatment to corporations. In particular, owners and managers of a corporation are rarely held responsible for the actions of the corporation in the state. Nevada also offers advantageous tax treatment to corporations with no personal income, franchise or corporate income tax.

Depending upon the exigencies of your business,  incorporating in Delaware or Nevada might be the best alternative. By engaging the services of an experienced business and tax law attorney, you can take advantage of these corporate safe havens.

 


Friday, September 8, 2017

What is a Spendtthrift Trust ?

What is a Spendthrift Trust ?

When it comes to estate planning, there are many factors to consider, not the least of which how to provide for loved ones. Although we like to believe that our heirs are deserving and capable of managing an inheritance, some beneficiaries may not be responsible or lack an understanding of financial matters. Fortunately, it is possible to leave assets to a troubled heir by creating a spendthrift trust.

This estate planning tool limits a beneficiary's access to trust property in order to protect it from him or herself as well as creditors. Rather than providing assets or funds directly to the beneficiary, the trust maker (or grantor), designates a trustee to manage the trust property and provide regular payments to, or purchase goods and services for, the beneficiary.

Spendthrift trusts are typically created when an heir does not know how to manage money or is frequently delinquent with debt. In addition, a spendthrift trust can protect those who have drug, alcohol or gambling problems or who are at risk of being manipulated.

The role of the trustee

The trustee is responsible not only for managing the trust, but also protecting the assets from being squandered by the beneficiary. This requires the trustee to manage the trust in a manner that preserves the value of the assets while providing for the beneficiary.

In order to do so, the trustee should have the power to make set payments to the beneficiary on a regular basis. Similarly, the trustee must also be able to withhold payments under certain conditions, particularly if the beneficiary gambles or gets into debt. However, this would also require the trustee to monitor the beneficiary's behavior, which could be problematic.

Finally, the grantor could also specify conditions under which payments should be released to the beneficiary. For example, the grantor could instruct payments be made directly to a landlord or a creditor rather than the beneficiary. In some cases, the beneficiary could also be required to undergo drug or alcohol testing before receiving a payment from the trustee.

In sum, a well designed spendthrift trust must consider the unique relationship of all the parties. It is crucial for the grantor to name a trustee who is honest and capable, and who will fulfill his or her obligation to preserve the trust assets and provide for the beneficiary.

Contact us for all of your Wills, Trusts, or other Estate Planning needs. 


Thursday, August 31, 2017

Top Five Reasons for Filing Personal Bankruptcy

Top Five Reasons for Filing Personal Bankruptcy

Although the number of personal bankruptcy filings in the U.S. has declined, many individuals continue to face insurmountable debt. Let's take a look at some of the reasons that lead people to file for bankruptcy.

Medical Expenses

A number studies demonstrate that medical expenses account for more than 60 percent of personal bankruptcies.  Catastrophic illnesses and injuries often result in hundreds of thousands of dollars in medical bills that can easily deplete savings and other sources of funds.  Once these funds have been exhausted, personal bankruptcy may be the only alternative.

Job Loss

Losing a job can have devastating consequences, whether due to a layoff, firing or resignation. While some individuals may receive severance pay or have an emergency fund to draw from, the loss of income can easily deplete one's savings. In addition, many individuals start to use credit cards to pay bills and also incur additional expenses such as COBRA insurance. Those who are out of work for an extended period of time are unable to pay creditors, and ultimately face collection activities and lawsuits.

Credit Debt

Although some individuals use credit cards irresponsibly, debts can spiral out of control due to unexpected circumstances such as illness, disability, or job loss. When consumers cannot make the minimum payment and are unable to borrow money from friends or family, bankruptcy may be inevitable. While debt-consolidations may be an option for some people, most plans only delay filings in the long run.

Divorce

Divorce can lead to financial burdens for both partners for a variety of reasons, not the least of which is legal fees. Obviously, dissolving a marriage can also lead to a significant loss of income and assets for either partner, depending on the division of marital property, and child and spousal support determinations.  Moreover, both partners will be faced with the cost of maintaining two separate households after the divorce.

Unexpected Expenses

Without an emergency fund, unexpected expenses such as a costly car repair or property damage from a catastrophic storm can easily drain a family's savings. While homeowner's insurance will cover some losses, many individuals do not receive the full value of their claims. They are also faced with expenses of finding temporary shelter and may also incur additional debt to make up any shortfalls.

Regardless of the circumstances, filing for bankruptcy can enable many individuals to eliminate or reorganize their debts and make a fresh start. However, this is a serious consideration that requires the advice and counsel of an experienced bankruptcy attorney.

 


Wednesday, August 23, 2017

How to Negotiate a Commercial Real Estate Lease

How to Negotiate a Commercial Real Estate Lease

There are number of considerations for business owners involved in negotiating a commercial lease, not the least of which is the fact that the main objective of landlords is to maximize profits. By understanding the following fundamental concepts, it is possible to make a good deal.

Market Conditions

First, understanding the market conditions for commercial properties is crucial. Generally, pricing is based on square footage, but there is a difference between "usable" square feet and "rentable" square feet.

Rentable square feet is the actual measurement of the space that is being leased. However, rates are typically quoted based on usable square feet which combines the space with a percentage of common areas such as lobbies, hallways, stairways and elevators.

In addition, commercial leases are considered "triple net." This means that tenants are also required to pay for taxes, insurance, and maintenance for a unit as well as a percentage of these costs for the common areas. By understanding these market conditions and the rate other businesses are paying for similar units, it is possible to negotiate the appropriate rate.

The Term

There are a number of factors involved with the term of a lease. For some businesses, such as retail stores or medical professionals, having a stable location is essential for attracting customers and patients, respectively. With this in mind, the term should be long enough to minimize rental increases, but sufficiently flexible to avoid getting locked in. This goal can be accomplished by negotiating terms of one or two years with renewal options.

Repairs, Maintenance, and Build-outs

It is also important for a commercial lease agreement to establish which party is responsible for paying  repair and maintenance costs of the space, building and grounds. In some cases the tenant pays for insurance, custodial services and security costs unless the landlord agrees to pay for a portion or all of these expenses. In addition, if new space is being leased, landlords will often agree to pay for the costs of "buildouts" to customize the space, or offer the tenant a rental abate instead.

Options and Incentives

By establishing a track record of making timely rental payments, it is often possible to renegotiate the lease to obtain more favorable terms. Although a lease may contain renewal options, it may not be necessary to exercise them automatically. At times, market conditions may change, in which case a new lease should be negotiated.

The Bottom Line

In the end, business owners face a number of challenges, and negotiating a commercial lease can have a significant impact on the company's long term success. For this reason, it is essential to engage the services of an experienced real estate attorney.

 


Monday, August 14, 2017

Patents

Patents

Inventors have a right to protect their inventions through the United States Patent and Trademark Office (USPTO). With the creation of a device come a bundle of property rights issued by the United States Government.   A patent prevents all “others from making, using, or selling the invention in the United States.”  The patent may survive for varying periods of time, depending on what type of patent is applied for and issued. Typically, protection does not activate until the patent is legally granted. 

Not all creations can be patented.  Only a device that is “new, non-obvious and useful” may qualify for a “utility patent.”  Abstract or theoretical concepts or ideas may not be protected by means of a patent.  Likewise, an invention is not patentable if it has been “publically disclosed.”  In order to determine this, patent searches should be conducted prior to filing an application. These searches may be very complex and an attorney’s instruction is advised.

Creations that cannot be approved under patent law may still be protectable through another method, such as trademark or copyright law. An intellectual property (IP) attorney can help advise clients about making the appropriate distinctions. An IP attorney is available not only to educate clients on the various application requirements for all types of intellectual property, but is prepared to provide provisional or non-provisional applications for patents. A non-provisional application establishes the filing date of the patent application, beginning the application process.  A provisional application only establishes the filing date and automatically expires after one year.

If there is more than one person involved in the creation of an invention, the partners may need to file an application as "joint inventors." Unfortunately, there are often disputes concerning which individual actually created the invention; sometime both parties claim to be the "sole inventor." Usually, after thoroughly analyzing all the facts, the attorney(s) can determine whether one or both inventors have the right to file the patent or whether they should file jointly.

There are several fees involved in obtaining a patent license, including filing, issuance, and maintenance fees.  An experienced IP attorney can inform clients of the timetable they will be responsible for, and clarify when various terms, such as "patent pending" or "patent applied for" are supposed to be used to keep the public updated regarding where the inventor is in the patent application process.

Please contact McCloud Law Group with your Patent questions. 


Friday, July 28, 2017

Enforcing a Child Support Order

Enforcing a Child Support Order

As many can attest, going through a divorce can be a difficult experience and the process can become contentious. Even after the spouses reach a settlement, conflict may continue to arise, particularly when a parent fails to make the required child support payments. In these cases, it may be necessary to take legal action to enforce the child support order.

Child Support at a Glance

While child support determinations may vary state to state, the courts generally consider a number of factors in reaching these decisions, including:

  • The child's standing of living while the parents were married

  • The income of each parent

  • Whether one parent is paying alimony to the other

  • The health, medical and educational expenses of the child

Child support orders specify the amount that is to be paid and usually require payments to be made on a monthly basis until the child becomes an adult.

Enforcing a Support Order

While both parents are responsible for the financial well-being of their children, the parent who has primary custody will typically be awarded child support. A parent who fails to comply with court ordered child support can be held accountable by the other parent. In order enforce the order, it is necessary to file an "Order to Show Cause" or a similar legal document with the court. This order must also be served on the non-paying parent.

The court will then hold a hearing and the non-paying parent will need to explain why the payments have not been made. In some cases, there may be legitimate reasons, such as a sudden loss of income or an illness or other emergency. If the order was violated without cause, however, the court will move to enforce the order. In these situations, the court has a number of options, such as ordering payments to be automatically deducted from the non-paying parent's paycheck.

If the parent is a repeat offender, the court can also garnish his or her wages, place a lien on real property or even seize bank accounts. A more drastic step, the court may find the non-paying parent to be in contempt of court which could result in a prison sentence and fines. However, courts are generally not inclined to go this far since the parent will then be unable to earn income to comply with the child support order.

In the end, divorcing spouses have a duty to support their children, regardless of the circumstances of the divorce. If you need help enforcing a child support order, you should consult with an experienced family law attorney.

 


Tuesday, July 18, 2017

Responsibilities and Obligations of the Executor/Adminstrator

Responsibilities and Obligations of the Executor/ Administrator

When a person dies with a will in place, an executor is named as the responsible individual for winding down the decedent's affairs. In situations in which a will has not been prepared, the probate court will appoint an administrator. Whether you have been named  as an executor or administrator, the role comes with certain responsibilities including taking charge of the decedent's assets, notifying beneficiaries and creditors, paying the estate's debts and distributing the property to the beneficiaries.

In some cases, an executor may also be a beneficiary of the will, however he or she must act fairly and in accordance with the provisions of the will. An executor is specifically responsible for:

  • Finding a copy of the will and filing it with the appropriate state court

  • Informing third parties, such as banks and other account holders, of the person’s death

  • Locating assets and identifying debts

  • Providing the court with an inventory of these assets and debts

  • Maintaining any assets until they are disposed of

  • Disposing of assets either through distribution or sale

  • Satisfying any debts

  • Appearing in court on behalf of the estate

Depending on the size of the estate and the way in which the decedent's assets were titled, the will may need to be probated. If the estate must go through s probate proceeding, the executor must file with the court to probate the will and be appointed as the estate's legal representative.

By doing so, the executor can then pay all of the decedent's outstanding debts and distribute the property to the beneficiaries according to the terms of the will. The executor is also is also responsible for filing all federal and state tax returns for the deceased person as well as estate taxes, if any. Lastly, an executor may be entitled to compensation for the time he or she served the estate. If the court names an administrator, this individual will have similar responsibilities.

In the end, being name an executor or appointed as an administrator ultimately means supporting the overall goal of distributing the estate assets according to wishes of the deceased or state law. In either case, an experienced probate or estate planning attorney can help you carry out these duties.


Friday, July 7, 2017

What is Wrongful Birth and Wrongful Life ?

What is Wrongful Birth and Wrongful Life ?

Children who are born with significant disabilities or birth defects often experience pain and suffering, and caring for them can be an emotional and financial burden for the parents. Today, medical advances allow medical professionals to conduct genetic tests on parents to determine if they are carrying certain genes as well as prenatal tests to determine if those genes have been passed on to the unborn child.

Wrongful Birth

When a serious condition is identified, the parents have the option to terminate the pregnancy. If a medical processional fails to properly diagnose a child or provide reasonable genetic counseling about the risks of a birth defect to the parents, they may be able to pursue a wrongful birth lawsuit. In order to have grounds for a lawsuit, the parents must show that they would have terminated the pregnancy or would have elected not to conceive had they known of the potential risk.

In a successful wrongful birth claim the parents may be awarded damages that are directly related to the birth defects, such as the cost of caring for the child. Although wrongful birth is a valid claim is some states, it is not recognized by all.

Wrongful Life

A wrongful life suit can also be filed by a child who has suffered with severe birth defects due to a negligent diagnosis.Elements similar to those for wrongful birth need to be proven in a wrongful life claim, but many states do not recognize these claims.  Moreover, courts have been hesitant to award damages in these cases due the complexities associated with determining an appropriate amount of compensation.

Ultimately, wrongful birth and wrongful life claims involve complex legal and ethical issues, and pursuing these claims can be an emotional burden for the parents. If you are struggling to care for a child with special needs, an experienced personal injury attorney can help determine whether you have a valid claim.

 


Wednesday, June 28, 2017

What is Strict Product Liability ?

What is Strict Product Liability ? 

 If an individual is harmed by a purchased device or product, damages may be recovered under strict product liability. The plaintiff, however, must be able to prove several things in order to prevail in suit against a distributor, manufacturer, or retailer. Generally, the product must have been “in an unreasonably dangerous condition” at the time of sale and intended to reach the consumer without any alteration.  Moreover, the injury suffered must be a direct result of the flawed product itself. 

Defects are not all created equal.  A plaintiff may bring a cause of action for either a manufacturing or design defect.  Generally speaking, in cases involving a  “manufacturing defect” only some products in the line of distribution will have been affected. The defect, for example, may have resulted from a malfunction in factory production. A design defect, on the other hand, which is integral to the product's structure, usually affects the entire line of the inventory, making each device dangerously defective.

Product liability can also be proven if a manufacturer does not provide adequate warning regarding a product's use. If the risk posed to the consumer is not patently obvious, the manufacturer is required to provide an understandable notice of warning to the customer. For an injured individual to win such a case, his or her injury must have resulted from the lack of warning or direction that could have prevented the injury sustained. 

If a plaintiff's injury results from that person's misuse of the product or his or her own negligence, that individual cannot prevail under the theory that the design or manufacture of the product was defective.

If an individual has been injured by a defective product, or because there was no evident warning of some dangerous aspect of the product's assemblage or use, a case of product liability may be brought. When considering whether to file a product liability lawsuit, an attorney specializing in the field should be consulted to assess whether the injured party has a viable case.


Monday, June 19, 2017

Why Your Business Needs an Email Policy

Why Your Business Needs an Email Policy

In the contemporary workplace, email is an essential and efficient form of communication. Whether it's used internally among staff members, or for exchanges with vendors and customers, email is a necessary business tool. At the same time, misuse of this technology can expose an organization to legal and reputational risks as well as security breaches. For this reason, it is crucial to put a formal email policy in place.

First, an email policy should clarify whether you intend to monitor email usage. It is also necessary to establish what is acceptable use of the system, whether personal emails are permissible, and the type of content that is appropriate. In this regard, the policy should prohibit any communication that may be  considered harassment or discrimination such as lewd or racist jokes. In addition, the email policy should expressly state how confidential information should be shared in order to protect the business' intellectual property.

By having employees read and sign the email policy, a business can protect itself from liability if a message with inappropriate content is transmitted. Further, it personal emails are not permitted, employees are more likely to conduct themselves in a professional manner. Because personal emails tend to be more informal and unprofessional, these messages pose a risk to the company's image if they are accidentally sent to customers. Lastly, email that is used for non-business reasons is a distraction that can adversely affect productivity.

The Takeaway

In order for a policy to be effective, it is necessary to provide training to all the employees, enforce it consistently and implement a monitoring system to detect misuse of the email system. Ultimately, establishing formal email policy and providing it to all employees will ensure a business remains productive and efficient. If an employee violates the policy, a company will also have the ability to take disciplinary action. Lastly, a well designed policy will ensure the company's image and brand is protected.


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