January 2014

630-517-5529

2021 Midwest Road, Suite 200, Oak Brook, IL 60523

Month: January 2014

At Shakfeh Law, we believe in the old saying that an ounce of prevention is worth a pound of cure. One way to prevent needing the cure in contracting is leaving a paper trail in contracting and in the execution of business contracts.

One very telling example of this is where potential business partners contract to form a business and the partnership agreement requires the partners to contribute capital, without specifying what kind of capital. Even worse is where the partners provide liquid capital to the business without receipts. Always get a receipt. There are two potential problems that may easily arrive and could be prevented by leaving a paper trail.

The first problem is that neither partner can prove or disprove that either partner contributed the agreed capital because the agreed capital isn't specified. If there is a dispute, there could be a very costly discovery process and risky trial that's likely to make both parties unhappy. After all, civil court are just an expensive way of making everyone unhappy.

The second issue is whether the capital was even provided. If cash or supplies are provided without proof of receipt, then the party receiving the cash or supplies can possess themselves of it and, if brought to court over the matter, the Plaintiff will have trouble proving that it was provided.

As a general rule, having an attorney look over business contracts can save a lot of money and headache. Either way, always be specific about ...
We often assume that big or even medium-sized companies have their act together. We think these companies hire highly trained professionals to take care of various important matters. However, after reviewing many employment contracts for employees, I can not say that companies take their legal department as seriously. I've seen medium and large (including public) companies with terrible contracts or sometimes hiring employees with no contract all. This makes it incredibly important for both employees and employers to have their contracts reviewed by an attorney.

Here are some common mistakes that employers make:

  1. Including clauses that violate employee rights therefore opening up the employer to potential legal liability,
  2. Drafting clauses that are difficult to understand thereby opening up the clause to multiple interpretations,
  3. Not probably describing the duties of the employee,
  4. Not following proper signature protocols (such as not including the title of company representative), and
  5. Not addressing likely scenarios.

Bottom line to employees: don't assume that an employer knows what they are doing with respect to contracts. Bottom line to employers: carefully draft your contracts.
It's tedious. It's mundane. But it's necessary. It's necessary to maintain proper corporate documents. What are those proper corporate documents? Business owners should maintain records of its annual corporate renewals. If you do not renew, your corporation could be dissolved involuntarily by the state. If your corporation is dissolved, business owners no longer have the liability protections of a corporation.

Other corporate documents that are important are shareholder minutes and board of director minutes. In Illinois, you will not get audited at least, but for the protection of the corporation - and the individuals who own the business - they are important to maintain nevertheless. This helps the owners keep track of all corporate decisions. If a business partners ever goes rogue (as is common), other business owners can use the minutes as protection.
Debt threats: Collectors' extreme tactics

via Al-Jazeera English.

'Posey's experience, while extreme, is far from uncommon. As the effects of the Great Recession continue to fester in neighborhoods across the country, more Americans than ever report being abused, harassed and deceived by the notoriously unregulated debt-buying and -collecting industry. In 2012, the Federal Trade Commission received an unprecedented 180,000 complaints about these companies, nearly 13 times more complaints than were reported in 2000.'

If you are ever harassed by a debt collector, seek legal advice immediately.
As a general rule, you're bound by every contract you sign. Therefore, be careful what you sign. Running a contract that you are contemplating to sign by a lawyer could potentially save you thousands of dollars. However, something people involved in transactions should also be careful about is whether they can be liable for unsigned contracts as well.

Generally, a contract is formed when there is (1) an offer, (2) acceptance of the offer, (3) and valuable consideration, (4) and an intent to be bound. None of this requires a written signature. Often times, nothing in the contract need even be in writing (though it's always advisable to get a contract in writing). Therefore, any proof that the parties intended to be bound can bind parties to a contract.

For example, two parties enter into the agreement for a sale of widgets. One of the terms of the seller's contract is a mandatory mediation clause. The purchaser, without signing the contract, pays the dollar amount described in the contract to the seller and accepts the amount of widgets described in the contract. Upon further inspection, the widgets are defective. Purchaser sues Seller and wants to go to trial. The judge will force the parties to go to mediation because there is evidence the parties assented to the contract. Therefore, not only should parties be careful about what they sign, they should also be concerned about what they receive and don't sign as well.