Originally posted 2012-02-21 09:00:58. Republished by Blog Post Promoter
We know that in Virginia, the parties to a contract are bound to the terms of that contract. We also know that Virginia courts look to the terms of that contract to determine each party’s rights and obligations. But what is a “contract?” This blog post looks at a recent Virginia Supreme Court case that gives a little guidance to answer that question.
Originally posted 2012-06-26 08:00:43. Republished by Blog Post Promoter
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.
Originally posted 2010-12-27 10:49:33. Republished by Blog Post Promoter
Raising money or obtaining other property for investment purposes from whatever source in Virginia, including from family and friends, implicates state and federal law.
Some may have read about the recent action for fraud filed by Andrew Cuomo, the Attorney General of the State of New York, against Ernst & Young, LLP, one of the largest accounting firms in the United States. Some, noting that this action was not brought under the Securities Exchange Act of 1934, may have wondered from whence the Attorney General’s authority arose. Authority arose under the Martin Act, a New York law initially passed in 1921, and amended and codified in 1982 in Article 23-A of the New York General Business Law.
What is important for those in the Commonwealth of Virginia attempting to raise money or obtain other property for investment purposes is that Virginia has similar securities laws. Virginia’s Securities Act is codified in Title 13.1, Chapter 5, of the Code of Virginia. As with that of the State of New York, the reach of Virginia’s Securities Act differs from, and is more extensive than, that of the federal securities acts.
Originally posted 2010-06-18 12:30:24. Republished by Blog Post Promoter
Though the majority of businesses in the United States are sole proprietorships, those of you who read an earlier post know that I recommend, for a myriad of good reasons, that an entity of some kind be placed between a person doing business and the rest of the world. Find an experienced business attorney to help establish your business entity.
In this post, I address briefly the general partnership form of business entity, the only form I consider more dangerous to the financial health of an individual than the sole proprietorship. Why, you ask? Because with the sole proprietorship, the sole proprietor is personally liable for the acts of the sole proprietor, the business and the business employees. In the general partnership, the partners are personally liable for the acts of the business, the employees and each other. What partners do can be fairly unpredictable, like contracting to purchase or lease things that cannot possibly be paid for out of the profits of the business, or like contracting to do that which cannot possibly be done profitably.
Originally posted 2010-08-20 09:35:32. Republished by Blog Post Promoter
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.”
Preserve your friendships when borrowing or lending with friends or family – Document your transactions
Originally posted 2012-11-19 08:13:25. Republished by Blog Post Promoter
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.
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
Originally posted 2010-06-29 00:57:15. Republished by Blog Post Promoter
The attorney-client privilege permits confidential communication between an attorney and her client. The objective is to encourage open communication, which permits an attorney to provide thorough, competent and complete advice. Generally speaking, only a client can waive the privilege, but as found by the Virginia Supreme Court in Walton v. Mid-Atlantic Spine Specialist, PC, et al., a client’s inadvertent disclosure of a privileged communication may operate as a waiver of the attorney-client privilege.
In this Williamsburg medical malpractice case, a defendant doctor wrote a letter to his attorney calling into question his medical diagnosis he gave to his patient. The doctor kept this letter in a separate notebook. During discovery the defendant medical practice used a third party service to copy document requests. The letter was provided inadvertently to the plaintiff.
Although the defendant claimed that he did not produce the letter or permit anyone else to produce the letter, the Court found that the defendant did not take adequate protection to protect the letter. The Court noted that the notebook in which the letter was found was not marked as confidential or privileged. Furthermore, the Court held that the client did not take prompt action following disclosure.
The Virginia Supreme Court considered five main factors in determining whether the inadvertent disclosure waived the client’s privilege. The Court looked at: (1) the reasonableness of the precautions to prevent inadvertent disclosures, (2) the time taken to rectify the error, (3) the scope of discovery, (4) the extent of the disclosure, and (5) whether the party asserting the claim of privilege or protection for the communication has used its unavailability for misleading or otherwise improper or overreaching purposes in the litigation making it unfair to allow the party to invoke confidentiality under the circumstances.
As a start, clients should maintain attorney-client privileged communications in a separate file or notebook and clearly mark the file or notebook and each communication as “CONFIDENTIAL-ATTORNEY-CLIENT PRIVILEGED COMMUNICATION.” Then, if an inadvertent disclosure is made, the client should contact her attorney as soon as possible to determine a plan of action to restore the attorney-client privilege.
Tarley Robinson, PLC, Attorneys and Counsellors at Law
What does it mean to be on the Board of Directors of your HOA? Fiduciary Duties (Part 1 of a series)
Originally posted 2010-10-20 06:15:55. Republished by Blog Post Promoter
Board members are told that they have fiduciary duties to the community association, but what does that really mean? Fiduciary duties arise because the members of the association entrust a board member to act in the best interest of the association when handling the association’s business.
There are three components that are important to understand fiduciary duty. First, the Virginia Code, at § 13.1-870, imposes on directors a requirement that a director exercise her duties in good faith and in the best interest of the association. This requirement is the so-called “business judgment” rule. Second, Virginia case law imposes duty of care that requires a board member to act as a reasonable person would under similar circumstances. Third, Virginia case law imposes a duty of loyalty that requires a board member to put the association before any personal interest. These last two duties are referred to as “common law” duties. Continue reading “What does it mean to be on the Board of Directors of your HOA? Fiduciary Duties (Part 1 of a series)”
Originally posted 2010-07-22 20:51:09. Republished by Blog Post Promoter
Many businesses operate under a fictitious name, otherwise referred to as “doing business as” or “d/b/a.” There are many reasons for this use, but primarily, a company can use a catchy business name, like when a franchise opens a “T.G.I.F.” or “McDonalds,” but the company’s actual corporate name is not as exciting.
According to the Virginia Supreme Court, Virginia requires a company operating under a different name to file that name with the court and the State Corporation Commission “to prevent fraud and to compel an individual or a corporation to disclose the name of the real owner of the business, in order that the person or corporation may sue in or be sued by the proper name.”
Virginia statutes set forth the process for registering your fictitious name. For restaurants or other single location businesses, the process is pretty simple. First, you file a fictitious name certificate with the court clerk in the jurisdiction where your business is located. After the certificate is recorded, you file the certified copy with the State Corporation Commission.
Problems can arise for construction companies and other types of businesses who transact business in several localities. For those companies, you must file a fictitious name certificate in each county or city where you conduct business. We have had several matters in which these types of businesses failed to properly register their fictitious names in all the jurisdictions where they conduct business. For one thing, those entities cannot bring a lawsuit to collect monies due until they rectify that problem.
“Doing business as” is just another issue to consider when you set up your company. Make sure you fully advise your lawyer so all of your filings can be completed early, and correctly.
Tarley Robinson, PLC, Attorneys and Counsellors at Law
Originally posted 2011-05-25 09:00:36. Republished by Blog Post Promoter
This blog post comes from Jason Howell, our 2011 Summer Associate when he was a rising third-year law student at the William & Mary Law School. Jason is working with us this summer and debuts his first blog post.
Negotiation can be challenging. Whether you are negotiating the terms of a business agreement, trying to buy or sell property, or settling a dispute, getting to an agreement can be difficult. Even if you are successful in getting the other side to negotiate with you, you may feel at a disadvantage or worry that there is something in the final negotiated agreement you are missing.
Hiring an experienced attorney to represent you can give you advantages that can help you get to an acceptable agreement. By using an attorney in your negotiation, you can benefit from the attorney’s knowledge and skill, which can help you to reach your negotiation goals.