My Commercial Tenant is gone . . . should I re-enter the Property?

October 30, 2014 on 12:50 pm | In Business Law, Business Planning, John Tarley, Land Use Planning, Real Estate Litigation, Real Estate Strategies, State & Federal Litigation | No Comments

Sometimes commercial tenants, unable to stay current with their lease obligations, decide to close up shop and abandon their leased premises. In those circumstances, commercial landlords need to know their options. This blog post discusses a commercial landlord’s options when a commercial tenant abandons its lease.

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Real Estate Listing Agreements are Contracts – Do you know your rights and obligations?

October 30, 2014 on 12:49 pm | In Business Planning, General Interest, John Tarley, Real Estate Litigation, Real Estate Strategies | No Comments

No sooner had we posted our blog article on the enforceability of listing agreements even when they are not in writing, another recent case came to our attention. This case is from the New Kent County Circuit Court. This case is another example of the increasing acrimony between sellers and brokers in a tight real estate market.

House For Sale

Listing Agreements

 

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The Same Employer But a Different Result in this Virginia Supreme Court Case Regarding the Enforceability of Noncompete Agreements

October 30, 2014 on 12:49 pm | In Business Planning, Employment law, John Tarley, Merger & Acquisition, State & Federal Litigation | No Comments

Over the course of the past 20 years, the Virginia Supreme Court has tweaked the law governing non-compete agreements. In its latest case, the Court came full circle by invalidating a noncompete agreement that used the same language the Court had upheld 20 years earlier in a case involving the same company.

As we have written before, trial courts will enforce noncompete agreements when the agreements (1) are narrowly drawn to protect the employer’s legitimate business interest, (2) are not unduly burdensome on the employee’s ability to earn a living, and (3) are not against public policy. Importantly, the employer has the burden to prove each of these elements. When evaluating whether the employer has met that burden, trials courts should consider the “function, geographic scope, and duration” elements of the noncompete restrictions.  These elements are “considered together” rather than “as three separate and distinct issues.”

Further, if the noncompete agreement is too broad or otherwise unenforceable, a Virginia court will not rewrite, or “blue pencil” the agreement to make it enforceable. Therefore, it is important that you work with your business attorney to draft an enforceable non-compete agreement.

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Employee Non-Competes: Why Must Prospective Employers Be Wary?

October 30, 2014 on 12:49 pm | In Business Law, Business Planning, General Interest, State & Federal Litigation | No Comments

We have written previously about employee “non-competes” (a/k/a covenants not to compete or non-competition agreements). You may have come across them in your own business, either by requiring them of your own employees or seeking to hire someone subject to a non-compete.   However, the area of law surrounding non-competition agreements can be tricky, and a new decision has added to the intrigue.

In DePuy Synthes Sales, Inc. v. Jones, the Eastern District of Virginia denied two motions to dismiss filed by the new employers of employees governed by non-compete agreements. DePuy employed two salespersons pursuant to employment agreements that contained non-compete provisions. They eventually left DePuy and began working for a competitor, Sky Surgical. DePuy sued the employees and Sky Surgical. This blog post examines the tortious interference of employment contract claim made by DePuy against the new employer, Sky Surgical.

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Oral Contracts are enforceable, but . . . .

October 30, 2014 on 12:49 pm | In Business Planning, Construction litigation, Real Estate Litigation, State & Federal Litigation | No Comments

Many times, parties enter into informal loan agreements on a simple oral promise to “pay it back.”  Similarly, others will enter into oral agreements to perform residential construction projects, or other types of projects. When things do not go as expected and the promises are of a value worth litigating over (or one of the parties to the promise thinks they are) things can go swiftly downhill.

Williamsburg Virginia Business Lawyers

Contracts

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Can an engineering firm limit its liability by contract?

October 30, 2014 on 12:49 pm | In Business Planning, John Tarley, State & Federal Litigation | No Comments

 

Maybe not, in certain circumstances. A Fairfax County judge has determined that an engineering firm cannot limit its liability by contract in a case involving a 2008 fee contract. The typical fee agreement for an engineering firm includes some form of “limitation of liability” in which the firm seeks to limit its liability “to the amount of fees paid” to the firm, whether the claim is for breach of contract or warranty, or for negligence. In the case of Dewberry & Davis, Inc. v. C3NS, Inc., the engineering services firm, Dewberry, filed a fee claim against C3NS. C3NS filed a counterclaim for breach of contract. Dewberry had a limitation of liability clause in its fee agreement. It sought summary judgment to prevent C3NS from claiming that the limitation of liability paragraph was void. The Court sided with C3NS.

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Getting rid of an LLC member in your business can be difficult without an effective operating agreement

October 30, 2014 on 12:49 pm | In Business Planning, General Interest, John Tarley, Merger & Acquisition, State & Federal Litigation | No Comments

It may seem hard to believe, but there’s a chance you and your fellow members in your limited liability company may not always get along. In fact, the relationship may get to the point where the majority of the members in the LLC wants to expel a member. As Lee Corso says frequently on ESPN Gameday, “Not so fast, my friend.”

 

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Preserve your friendships when borrowing or lending with friends or family – Document your transactions

October 30, 2014 on 12:49 pm | In Business Law, Business Planning, General Interest | No Comments

Many small businesses rely upon loans from friends and family for startup funds, for business expansions, or to support existing operations. Many times, these loans are made upon an oral agreement. As we have written previously, although oral agreements can be enforceable, without a writing, the terms of the agreements can be difficult to prove. In this blog post, we will describe other problems with informal lending transactions between family and friends.

contract, borrow money

In a study entitled “Lenders’ Blind Trust and Borrowers’ Blind Spots: A Descriptive Investigation of Personal Loans,” researchers outlined many of the difficulties of maintaining a lender-borrower relationship  between friends and family. In many “informal” lending relationships, the borrowers and the lenders remember the transactions differently. This “self-serving bias” can lead to problems. For example, borrowers may believe that the “loan” was a “gift,” or although agreeing that the transaction was a “loan,” may believe they paid off the loan. On the other hand, the lenders may feel angry when the “loan” is not repaid, especially when the borrower never raises the issue of repayment.

The study documented these differences between borrowers and lenders:

 Many borrowers thought the idea for the loan originated with the lender, not themselves, although the lenders thought otherwise;

 Borrowers reported far fewer delinquent loans than lenders;

 Borrowers were fairly confident they would eventually repay the loan, but lenders thought even one missed payment probably meant the loan would never be paid off;

 Delinquent borrowers “are much more likely to report feeling guilty, and also strangely, relieved and happy. Lenders associated with delinquent loans, in contrast, are much more likely to report feeling angry.”

Even though banks are flush with cash to lend, you may not qualify for a loan, or the bank’s terms may be too onerous. Consequently, family and friends are natural sources of funds for startup funds or for operating capital. However, as the proverb says,”Before borrowing money from a friend, decide which you need most.” Therefore, if you must borrow from friends or family, it is a small price to pay to perserve your personal relationships to have your business attorney draft the appropriate loan documents, including a promissory note, so that everybody knows the expectations of the transaction. Taking this step at a relatively small price can save your friendships.

Tarley Robinson, PLC,  Williamsburg, VA

Attorneys and Counsellors at Law

 

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Arbitration instead of Court? Be careful what you ask for

October 30, 2014 on 12:49 pm | In Business Planning, Common Interest Community, John Tarley, Real Estate Strategies, State & Federal Litigation | No Comments

Over the past 15 years or so, “arbitration” provisions have appeared with increasing frequency in a wide variety of contracts. For example, declarations of covenants and restrictions recorded for homeowners associations, construction contracts, employment contracts, and commercial leases all may contain arbitration clauses. Arbitration may be a good idea, but you should know what “arbitration” means before you agree to be bound by such a provision.

Many people confuse the terms “mediation” and “arbitration.” Mediation refers to a process whereby a third-party helps facilitate a negotiated settlement between two or more parties. A mediator does not make decisions, does not take evidence, and does not conduct hearings. Parties simply negotiate and the mediator helps foster those negotiations.

Conversely, arbitrations are conducted like regular trials, with a judge-like arbitrator (or arbitrators) making a final decision based upon the evidence presented, and hopefully the law of your jurisdiction. Appeals of an arbitrator’s decision are virtually nonexistent.

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Does your Business use Employee Noncompete Agreements?

October 30, 2014 on 12:49 pm | In Business Planning, Merger & Acquisition, Neal J. Robinson, State & Federal Litigation | No Comments

The legal issues related to employee “non-competes” (also known as covenants not to compete or non-competition agreements) are often not well understood by employees subject to them, the companies insisting upon them, or the companies intending to hire persons subject to them.  That may well be especially true in the Commonwealth of Virginia where one frequently hears, “That agreement is so broad it will never be enforced and Virginia doesn’t ‘blue pencil’ these agreements, so no problema.”

Williamsburg Virginia Business Lawyers

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