The 5 Biggest Mistakes Made by New Limited Liability Companies (LLC) By: Amyli McDaniel, Esq.
Mistake #1 Doing business Before the LLC is Formed
You are personally liable for any business activities or transactions that take place before your LLC is formed. A person can sue you years later for something you did today. If your business becomes successful, those early acts could cause you to be personally sued. Don't think it has not been done. With over 70,000 lawsuits filed a day, this world is filled with people and their predatory litigation attorneys looking for successful small businesses to attack.
Many new business owners put off the formation of their LLC while they work on the other details of starting a business. Once you have decided to start a business, it is a much smarter move to form your LLC at once and then have the LLC itself engage in the other start up activities as opposed to you personally. This is the best way to ensure your liability protection.
Another mistake many business owners make is thinking that once their formation documents (known as "Articles of Organization") have been sent into the state agency, their LLC has been formed. This may be wrong! In many states, an LLC is not formed until the state agency has processed the paperwork and entered the new LLC into the official LLC database. This process can take as long as 30 days or more in some states. The Certificate of Organization is the birth certificate of the LLC and you should wait until you have received this before you enagage in LLC activities.
Now, if you have found that you waited too long and you now need to open a bank account to conduct business or your business needs to sign a contract, hire an employee or otherwise conduct business, most states offer expedited services. The expedite services usually requires the filing of an additional document and paying an expedite fee in addition to the filing fee they charge for the filing itself. In most states, you can have your LLC formed in 3 business days but it will cost you significantly more.
In summary, once you have decided to start a business, form your LLC right away. This will ensure you have more liability protection and it will save you the money and stress of having to form one on an expedited basis to avoid losing business or delaying other start up activities. Mistake #2 Failing to Actually Issue Ownership Interests in the LLC
Many business owners create an LLC but never actually issue ownership interests (known as Membership Units) to the persons that are going to be owners of the LLC (known as Members). It can be easy for you mistakenly think that because you created the LLC, you are automatically the owner of the LLC.
The fundamental premise of an LLC is that it is its own separate entity. When an LLC is formed by a state agency, it does not have owners. Membership Units or a percentage ownership interest in the LLC must be issued to the persons who will be the owners. This issuance transaction needs to be in writing.
The LLC Operating Agreement is the typical place where the LLC issues shares to Members and usually the Members agree to contribute a certain amount of money to the LLC for those Membership Units (this money ob�igation is known as a Capital Contribution).
Make sure that after your LLC is formed, you complete this next step. It is vital to your LLC business because an LLC once formed is a shell entity without any ownership attributes until Membership Units are issued to Members.
If you need a customized LLC Operating Agreement, please visit www.TheLLCExpert.com
Mistake #3 Failing to Create a Management Structure and Appoint Officers
An LLC needs to have a management structure. A management structure determines who has the authority to make decisions on behalf of the LLC. There are two management structures. A member-managed LLC is when the members automatically have the rights to operate and manage the LLC business.
The second is a manager-managed LLC which creates a corporate type structure. A Board of Managers is created and persons who are appointed to that Board have the authority to run the business. All LLCs should appoint the officers (President, Secretary, Treasurer) of the LLC.
The best place to create a management structure and appoint initial officers is in the LLC's Operating Agreement. All LLC's should have an Operating Agreement as this agreement creates the set of rules for your LLC.
If you are a single member LLC, this becomes even more important because you run a higher risk of losing liability protection if you ignore your entity as a separate entity. Remember, your LLC is a separate and distinct entity and this is important to preserve the layer of limited liability protection afforded by LLCs.
If you do not comply with the standard protocols for LLCs, a predatory attorney can try to sue you personally and say that you should be personally liable for the LLC activities because you did not treat the LLC as an entity separate and apart from yourself.
Now, the LLC Acts of most states will have default management provisions that apply if your LLC does not have an Operating Agreement, but those laws are always changing and they can be difficult to apply. Plus, if you have other Members, then disputes can arise as to what voting requirements, profit allocations and other rules apply. The laws may include provisions that you do not want for your LLC.
Another great benefit of LLCs is that the Members can decide amongst themselves how they operate their LLC. Use a well drafted Operating Agreement for your LLC and get all of your Members to sign the Operating Agreement. A great customized LLC Operating Agreement is available at www.TheLLCExpert.com
Mistake #4 Failure to Get Investment Obligations in Writing
The LLC Acts of most states require that all agreements by a Member of an LLC to contribute money to the LLC must be in writing. An oral agreement is not enforceable under the law.
If you are planning on starting a new business with other persons, you will likely get together and decide on how much of the business each of you will own and on what obligations each of you are agreeing to with respect to that business.
Obligations usually include how much money you are each going to contribute to the business and what kind of services and time commitment each of you will devote to the business.
At the beginning of a business, these conversations take place and everyone agrees. An important discussion is how much will the business require in money before it can generate its own cash to operate the business. This amount is known as start-up capital. A typical conversation goes like this: Anne: "John, we are going to need $20,000 over the next year to start this business. If we are going to each work equally and you agree to put in $ 5,000 of the capital, I agree to issue to you 25% of the ownership of the business." John: "Anne, that sounds fair. We will each work equally in the business but because you will be contributing $15,000 and I will contribute only $5,000, the 75%-25% allocation makes sense. Now, I am looking at our budget and most of the money will not be required until 5 months from now when we will move into office space and need to pay our vendors for products purchased- I will contribute my $5,000 then- is that okay?" Anne: "Sure, as long as we are in agreement as to amount, I can front the initial expenses until the 5th month and then the LLC will need your $5,000."
Then John and Anne form their LLC and starts their business. . . forgetting to ever document the agreement among LLC owners (known as Members) in any written agreement. Five months later, Anne asks John to contribute $5,000 and he says he does not feel like he should contribute this money because he has worked more on the business than Anne or. . . perhaps he decided to invest the money elsewhere at that point.
This is a common situation that multi-member LLCs find themselves in often. Any monetary or services obligations should be set forth in writing.
Mistake #5 Thinking that an LLC is a Foolproof Layer of Liability Protection
Yes, it is established that a Member of a properly formed and maintained LLC is not liable for the debts, obligations and lawsuits of the LLC merely by being a Member of the LLC. But, in a realistic business context, persons who are Members are usually not passive owners of the LLC. They are also active managers and operators of the LLC business.
In today's litigious world, all businesses should be run through a limited liability entity such as an LLC. The LLC liability protection is a significant protection vehicle. However, the LLC layer of protection does not extend to all potential liabilities that can arise in the midst of running an LLC.
For example, you may be in a company car driving to see a client when you are in an accident. You will be personally liable for that accident regardless of the fact that, at the time, you were working on behalf of your LLC business. The LLC laws do not cover personal negligence. Your LLC should always have insurance to cover these types of business related accidents. Do not ever think that the LLC is enough to protect you in these circumstances.
Similarly, there are some laws that hold you liable regardless of whether you are operating through an LLC. The most obvious one that might apply is if you are a licensed professional. Doctors, lawyers, accountants, real estate brokers and dentists, for example, are always personally liable for acts of malpractice. If you are a licensed professional, make sure you get the proper insurance. Also, there are certain tax, environmental and securities laws that you can be held personally liable for if your LLC is in violation of those laws and you were the responsible manager.
Do your homework in performing the administrative and other tasks of your LLC and retain the proper professionals to advise you when appropriate.
Finally, you cannot use your LLC to engage in fraud or hide behind the LLC to protect yourself when you engage in fraudulent or unlawful acts. If you break the law or try to defraud others, the law will hold you personally accountable. * * * In summary, the LLC is a wonderful vehicle for providing Members with limited liability protection. But, in order to preserve that protection, you cannot just form an LLC and then forget it exists. Make sure you do the necessary things to honor your LLC as a separate entity and also know that the LLC should not be your sole means of protection- get insurance when it makes sense and always invest in the required knowledge for operating your business which includes getting the right help when needed in your business! www.TheLLCExpert.com
About the Author
Amyli McDaniel is a business attorney with over 10 years experience representing small businesses and small business owners. She has developed particular expertise forming and advising on limited liability entities, commonly known as an LLC. She has written a book "The Six Step LLC Formula for Limited Liability Protection" which is available as an eBook.
Amyli is the founder of the The LLC Expert website where there is a lot of great
Friday, January 26, 2007
Sunday, January 14, 2007
The UFO Lawyer
The UFO Lawyer
By: Francesca Black
Copyright 2006 Francesca Black
If you thought UFO sightings only belonged in science fiction movies and late night TV, and that believers existed on the fringe of society, think again. It is a little known fact that for over thirty years UFO investigations and contact with ETs have been debated even in our respected US courtrooms.
Peter Gersten, AKA the UFO lawyer, is a maverick who for the last twenty years has been blazing a trail for those who have experienced frightening and unexplainable events, by giving them a voice in a society where they have been previously shunned. The founding director of CAUS (Citizens Against UFO Secrecy), Gersten is opposed to keeping UFO information from the American public. Lacking the sensationalism of other publicized court cases, the success of CAUS is not generally known, except among UFO researchers. It may come as a surprise to know that Gersten, representing Ground Saucer Watch, won his first UFO-related case in 1977 against the CIA, which resulted in the release of over 900 pages of UFO-related documents. Even more interesting is the fact that 57 documents were allowed to be withheld, claiming national security considerations. Since that day, Gersten has challenged this claim, forming CAUS and bringing even more relevant issues into the spotlight by bringing them into the courtroom.
CAUS is a non-profit organization dedicated to ending the secrecy that is associated with UFO and ET contact. Targeted projects include the release of information from the government, the investigation into UFO phenomenon and the appropriate collection and dispersal of information.
Gersten and the people involved in CAUS are so dedicated that services are offered pro bono to eye witnesses or individuals who possess physical or other genuine evidence. As would be expected in any lawyer-client relationship, confidentiality is guaranteed.
One might ask how someone becomes a UFO lawyer. Not surprisingly, there is no field specific to this practice. To date, Gersten is the only attorney to successfully sue the government for UFO documents. He trained and practiced as a traditional lawyer for years before finding his niche and committing himself to these projects. Before he became the UFO lawyer, he practiced criminal law in New York for 25 years. He now practices law in Arizona, where he currently is a trial attorney with the Navajo County Public Defenders Office. Maybe in the near to distant future, as more information is released and the public becomes more aware of UFO phenomenon, there will be a greater call for lawyers in this field, and firms may be established for that end. Until then, interested persons would certainly be wise to study science and technology, as well as the traditional courses required for a JD.
Article Source: http://www.articlerich.com
Francesca Black a long time science fiction buff, manages content for UFO Gifts www.ufo-gifts.com and Science Fiction Corner www.science-fiction-corner.com
By: Francesca Black
Copyright 2006 Francesca Black
If you thought UFO sightings only belonged in science fiction movies and late night TV, and that believers existed on the fringe of society, think again. It is a little known fact that for over thirty years UFO investigations and contact with ETs have been debated even in our respected US courtrooms.
Peter Gersten, AKA the UFO lawyer, is a maverick who for the last twenty years has been blazing a trail for those who have experienced frightening and unexplainable events, by giving them a voice in a society where they have been previously shunned. The founding director of CAUS (Citizens Against UFO Secrecy), Gersten is opposed to keeping UFO information from the American public. Lacking the sensationalism of other publicized court cases, the success of CAUS is not generally known, except among UFO researchers. It may come as a surprise to know that Gersten, representing Ground Saucer Watch, won his first UFO-related case in 1977 against the CIA, which resulted in the release of over 900 pages of UFO-related documents. Even more interesting is the fact that 57 documents were allowed to be withheld, claiming national security considerations. Since that day, Gersten has challenged this claim, forming CAUS and bringing even more relevant issues into the spotlight by bringing them into the courtroom.
CAUS is a non-profit organization dedicated to ending the secrecy that is associated with UFO and ET contact. Targeted projects include the release of information from the government, the investigation into UFO phenomenon and the appropriate collection and dispersal of information.
Gersten and the people involved in CAUS are so dedicated that services are offered pro bono to eye witnesses or individuals who possess physical or other genuine evidence. As would be expected in any lawyer-client relationship, confidentiality is guaranteed.
One might ask how someone becomes a UFO lawyer. Not surprisingly, there is no field specific to this practice. To date, Gersten is the only attorney to successfully sue the government for UFO documents. He trained and practiced as a traditional lawyer for years before finding his niche and committing himself to these projects. Before he became the UFO lawyer, he practiced criminal law in New York for 25 years. He now practices law in Arizona, where he currently is a trial attorney with the Navajo County Public Defenders Office. Maybe in the near to distant future, as more information is released and the public becomes more aware of UFO phenomenon, there will be a greater call for lawyers in this field, and firms may be established for that end. Until then, interested persons would certainly be wise to study science and technology, as well as the traditional courses required for a JD.
Article Source: http://www.articlerich.com
Francesca Black a long time science fiction buff, manages content for UFO Gifts www.ufo-gifts.com and Science Fiction Corner www.science-fiction-corner.com
Monday, January 8, 2007
Where the Law is Headed in 2007?
Where the Law is Headed in 2007?
Author: Gerard Simington
As we approach the end of December, it is time to open gifts and start thinking about 2007. So, what can we expect in the legal field next year?
Where the Law is Headed in 2007?
Predicting practically anything in the future is a risky endeavor indeed. Okay, I think I am safe predicting the sun will rise tomorrow. After all, I am hardly going to hear any objections if it does not. When considering the law, predictions of specific events are a bit iffy, but some general trends can certainly be foreseen.
When it comes to the law, everything begins with the Supreme Court. 2006 was a fairly calm year at the court with few revolutionary decisions. The reason? The changing of the guard when it comes to the justices. We have a new Chief Justice and Associate Justice, both who are known for their conservative views. Although 2006 was calm, both justices lived up to their conservative reputations, which gives us a hint of what is coming in 2007.
The coming year is going to be one of minor and major changes in the case law of the land. With the appointments of Chief Justice Roberts and Associate Justice Alito, the court has shifted to the right. The swing vote on many cases is now Justice Kennedy, who leans to the conservative side of the scale. This will equate in decisions that reduce the rights of individuals, increases the authority of the federal government and limits the regulation of business. On the hot button topic of abortion, it is more likely that the court will put limits on Roe v. Wade instead of simply overturning it, but a complete reversal of the decision is certainly possible.
Moving away from the court system, the other area of law we are likely to see major changes in is intellectual property. Intellectual property law is simply case law and statutes that deal with business assets that are intangible, but valuable. This includes areas such as copyright, trademark and patent law. Forefront in the battle will be the continuing evolution of how these issues translate to the Internet. One can specifically expect to see a lot of lawsuits involving YouTube.
YouTube, of course, is a site that allows people to post videos. The site is hugely popular and was recently purchased by Google. With deep financial pockets, it is now a target for litigation on issues related to copyright and trademark infringement. Specifically, the problem is going to be how these rights translate to videos being posted by people on YouTube, which they do not own. For instance, what is the responsibility of YouTube when someone posts a music video or something? In practical terms, we are looking at the Napster litigation scenario all over again, but with video this time.
Obviously, the legal arena is a huge one. There are many different areas of law and each will be modified in 2007. That being said, a conservative pull back on current law can be expected in Supreme Court decisions, and the application of intellectual property law to the net should be the most volatile areas in the coming year.
Gerard Simington is with FindAnAttorneyForMe.com - find attorney online with our free directory.
This article is free for republishing
Source: http://www.articlealley.com
Gerard Simington is with FindAnAttorneyForMe.com - find an attorney online with our free directory.
http://www.findanattorneyforme.com
Author: Gerard Simington
As we approach the end of December, it is time to open gifts and start thinking about 2007. So, what can we expect in the legal field next year?
Where the Law is Headed in 2007?
Predicting practically anything in the future is a risky endeavor indeed. Okay, I think I am safe predicting the sun will rise tomorrow. After all, I am hardly going to hear any objections if it does not. When considering the law, predictions of specific events are a bit iffy, but some general trends can certainly be foreseen.
When it comes to the law, everything begins with the Supreme Court. 2006 was a fairly calm year at the court with few revolutionary decisions. The reason? The changing of the guard when it comes to the justices. We have a new Chief Justice and Associate Justice, both who are known for their conservative views. Although 2006 was calm, both justices lived up to their conservative reputations, which gives us a hint of what is coming in 2007.
The coming year is going to be one of minor and major changes in the case law of the land. With the appointments of Chief Justice Roberts and Associate Justice Alito, the court has shifted to the right. The swing vote on many cases is now Justice Kennedy, who leans to the conservative side of the scale. This will equate in decisions that reduce the rights of individuals, increases the authority of the federal government and limits the regulation of business. On the hot button topic of abortion, it is more likely that the court will put limits on Roe v. Wade instead of simply overturning it, but a complete reversal of the decision is certainly possible.
Moving away from the court system, the other area of law we are likely to see major changes in is intellectual property. Intellectual property law is simply case law and statutes that deal with business assets that are intangible, but valuable. This includes areas such as copyright, trademark and patent law. Forefront in the battle will be the continuing evolution of how these issues translate to the Internet. One can specifically expect to see a lot of lawsuits involving YouTube.
YouTube, of course, is a site that allows people to post videos. The site is hugely popular and was recently purchased by Google. With deep financial pockets, it is now a target for litigation on issues related to copyright and trademark infringement. Specifically, the problem is going to be how these rights translate to videos being posted by people on YouTube, which they do not own. For instance, what is the responsibility of YouTube when someone posts a music video or something? In practical terms, we are looking at the Napster litigation scenario all over again, but with video this time.
Obviously, the legal arena is a huge one. There are many different areas of law and each will be modified in 2007. That being said, a conservative pull back on current law can be expected in Supreme Court decisions, and the application of intellectual property law to the net should be the most volatile areas in the coming year.
Gerard Simington is with FindAnAttorneyForMe.com - find attorney online with our free directory.
This article is free for republishing
Source: http://www.articlealley.com
Gerard Simington is with FindAnAttorneyForMe.com - find an attorney online with our free directory.
http://www.findanattorneyforme.com
Sunday, January 7, 2007
Legal Significance Of Digital Signatures
Legal Significance Of Digital Signatures
by: Nicholas J. Deleault
A cornerstone of United States contract law is the general application of the Statute of Frauds to contractual agreements. Emerging forms of electronic commerce and new types of contractual relationships have begun challenge the very idea of defining the four corners of a contract. Many obstacles concerning contractual relationships arise with the proliferation of electronic commerce, most notably determining what constitutes a valid signature. Traditionally, the Statute of Frauds is a collective term describing various statutory provisions that deny enforcement of certain forms of contracts unless they are reduced to writing and signed by the party to be charged. The problem with this traditional idea of the Statute of Frauds is how it relates to electronic commerce in determining whether the party being charged with the contract has actually “signed” the contract for purposes of enforcement.
Various forms of legislation dealing with internet law have attempted to define and describe digital and electronic signatures for purposes of determining enforceability.
Generally, there are two broad categories of signatures when dealing with electronic contracts.
1. Electronic Signatures (“E-Signatures”)
2. Digital Signatures
I. Electronic Signatures
The Uniform Electronic Transactions Act (UETA) defines electronic signature as “an electronic sound, symbol, or process attached to or associated with, an electronic record and executed or adopted by a person with the intent to sign the record.” UETA, §2. Often referred to as ‘click-wrap’ agreements, these forms of electronic signatures are given a broad presumption of enforceability through acts such as UETA and the Electronic Signatures in Global and National Commerce Act (ESGNCA/ “E-Sign”). These acts make it clear that binding contracts may be created by the exchange of email or by simply clicking “yes” on those click-on licensing agreements that we have all accepted w ith all types of internet transactions. Like the UETA, the ESGNCA does require that consumers affirmatively consent to the click agreements and that the vendor must provide the consumer with a clear and conspicuous statement regarding the effect of agreeing to click, but parole evidence is rarely allowed in order to prove or disprove intent to contract. ESGNCA§101(c)1. By simply clicking “I agree” intent is presumed.
The widespread enforceability of electronic signatures is also recognized as completely valid for purposes of liability protection by the Digital Millennium Copyright Act. DMCA§512(3)(A)(i). As a relatively settled area of internet law, it is important to understand the enforceability of electronic signatures, whether or not intent is manifest from the face of the agreement itself. Since these click wrap agreements are presumptively enforceable, it is important to advise your clients regarding the potential pitfalls accepting terms of an online transaction without fully understanding what they are agreeing to. Simply accepting these terms may interfere with your client’s right to the judicial system for dispute resolution, as click-on arbitration clauses are also generally enforceable. Your clients will not be able to rely on the Statute of Frauds in order to demonstrate that there was no intent to contract. With electronic signatures, intent is an objective standard, generally determined by the simple click of a mouse.
II. Digital Signatures
Unlike electronic signatures, digital signatures are more often than not used as a means of demonstrating affirmative intent. The problems with digital signatures do not stem from inadvertent agreement to terms, but rather from the security and confidentiality of the digital signatures. Generally speaking, digital signatures are encrypted electronic signatures that a third party (often referred to as the certification authority) authenticates as genuine. Unlike the more general electronic signature, a digital signature must be unique and strictly under the sole custody of the party using it. Unlike electronic signatures, where a typed name, a company name or even a logo can all bind the party to be charged by its mere presence, digital signatures offer the agreeing party greater levels of security and efficiency. The general types of signatures will not be enforceable as a digital signature. Because of the authentication requirements of a digital signature, it should be recommended that clients rely on the use of digital signatures for any high-profile or high liability electronic contract.
Digital signature use will only increase in use in the future, as parties to all transactions will seek a heightened level of information security without the fear of accidentally agreeing to unfavorable terms. While there is an inherent fear of paperless transactions, especially with more traditional attorneys and companies, the use of digital signatures makes commerce faster, more secure and more effective and should be recommended to clients when appropriate. The use of digital signatures is even more effective when dealing in international trade, making it no longer necessary to fly overseas in order to demonstrate intent to sign a contract.
While understanding and zealously advising clients to the use of various forms of signatures for electronic commerce is important, it is also imperative to understand that we are still in the early years of a technological revolution, and that part of being an effective advocate is keeping up to date on advancements in the law. Electronic and digital signatures are only the beginning. Advancements in technology will soon allow for the widespread use of biometric identification as a means of demonstrating intent to contract. Principles of contract law will continue to evolve with technology and while the application of contract principles and the Statute of Frauds will not substantially change, their interpretation and use surely will.
About The Author
This article was written by Nicholas J. Deleault, Pierce Law Center ‘07. Nicholas writes select legal articles for the Law Firm of http://www.goldsteinandclegglaw.com/blog, a http://www.goldsteinandclegglaw.com
by: Nicholas J. Deleault
A cornerstone of United States contract law is the general application of the Statute of Frauds to contractual agreements. Emerging forms of electronic commerce and new types of contractual relationships have begun challenge the very idea of defining the four corners of a contract. Many obstacles concerning contractual relationships arise with the proliferation of electronic commerce, most notably determining what constitutes a valid signature. Traditionally, the Statute of Frauds is a collective term describing various statutory provisions that deny enforcement of certain forms of contracts unless they are reduced to writing and signed by the party to be charged. The problem with this traditional idea of the Statute of Frauds is how it relates to electronic commerce in determining whether the party being charged with the contract has actually “signed” the contract for purposes of enforcement.
Various forms of legislation dealing with internet law have attempted to define and describe digital and electronic signatures for purposes of determining enforceability.
Generally, there are two broad categories of signatures when dealing with electronic contracts.
1. Electronic Signatures (“E-Signatures”)
2. Digital Signatures
I. Electronic Signatures
The Uniform Electronic Transactions Act (UETA) defines electronic signature as “an electronic sound, symbol, or process attached to or associated with, an electronic record and executed or adopted by a person with the intent to sign the record.” UETA, §2. Often referred to as ‘click-wrap’ agreements, these forms of electronic signatures are given a broad presumption of enforceability through acts such as UETA and the Electronic Signatures in Global and National Commerce Act (ESGNCA/ “E-Sign”). These acts make it clear that binding contracts may be created by the exchange of email or by simply clicking “yes” on those click-on licensing agreements that we have all accepted w ith all types of internet transactions. Like the UETA, the ESGNCA does require that consumers affirmatively consent to the click agreements and that the vendor must provide the consumer with a clear and conspicuous statement regarding the effect of agreeing to click, but parole evidence is rarely allowed in order to prove or disprove intent to contract. ESGNCA§101(c)1. By simply clicking “I agree” intent is presumed.
The widespread enforceability of electronic signatures is also recognized as completely valid for purposes of liability protection by the Digital Millennium Copyright Act. DMCA§512(3)(A)(i). As a relatively settled area of internet law, it is important to understand the enforceability of electronic signatures, whether or not intent is manifest from the face of the agreement itself. Since these click wrap agreements are presumptively enforceable, it is important to advise your clients regarding the potential pitfalls accepting terms of an online transaction without fully understanding what they are agreeing to. Simply accepting these terms may interfere with your client’s right to the judicial system for dispute resolution, as click-on arbitration clauses are also generally enforceable. Your clients will not be able to rely on the Statute of Frauds in order to demonstrate that there was no intent to contract. With electronic signatures, intent is an objective standard, generally determined by the simple click of a mouse.
II. Digital Signatures
Unlike electronic signatures, digital signatures are more often than not used as a means of demonstrating affirmative intent. The problems with digital signatures do not stem from inadvertent agreement to terms, but rather from the security and confidentiality of the digital signatures. Generally speaking, digital signatures are encrypted electronic signatures that a third party (often referred to as the certification authority) authenticates as genuine. Unlike the more general electronic signature, a digital signature must be unique and strictly under the sole custody of the party using it. Unlike electronic signatures, where a typed name, a company name or even a logo can all bind the party to be charged by its mere presence, digital signatures offer the agreeing party greater levels of security and efficiency. The general types of signatures will not be enforceable as a digital signature. Because of the authentication requirements of a digital signature, it should be recommended that clients rely on the use of digital signatures for any high-profile or high liability electronic contract.
Digital signature use will only increase in use in the future, as parties to all transactions will seek a heightened level of information security without the fear of accidentally agreeing to unfavorable terms. While there is an inherent fear of paperless transactions, especially with more traditional attorneys and companies, the use of digital signatures makes commerce faster, more secure and more effective and should be recommended to clients when appropriate. The use of digital signatures is even more effective when dealing in international trade, making it no longer necessary to fly overseas in order to demonstrate intent to sign a contract.
While understanding and zealously advising clients to the use of various forms of signatures for electronic commerce is important, it is also imperative to understand that we are still in the early years of a technological revolution, and that part of being an effective advocate is keeping up to date on advancements in the law. Electronic and digital signatures are only the beginning. Advancements in technology will soon allow for the widespread use of biometric identification as a means of demonstrating intent to contract. Principles of contract law will continue to evolve with technology and while the application of contract principles and the Statute of Frauds will not substantially change, their interpretation and use surely will.
About The Author
This article was written by Nicholas J. Deleault, Pierce Law Center ‘07. Nicholas writes select legal articles for the Law Firm of http://www.goldsteinandclegglaw.com/blog, a http://www.goldsteinandclegglaw.com
Saturday, January 6, 2007
A General Overview of a Lemon Law Claim
A General Overview of a Lemon Law Claim by Greg Artim
Many states have automobile based lemon laws to protect individuals who have purchased defective motor vehicles. If your state does not have an automobile lemon law, you can still be protected by what is referred to as the Federal Lemon Law, or the Magnusson Moss Act. While the law is different in each state, many similarities can be found in the state lemon laws and the Federal Magnusson Moss Act. Typically, your vehicle must exhibit a defect or non-conformity that substantially impairs the use, value or safety of your vehicle. Examples of this might be engine, transmission, braking, suspension or other serious problems. The defect must first occur within some defined mileage parameter, usually 12,000 or 18,000 miles or the first year that the car is in service. The lemon laws always give the manufacturer a reasonable number of attempts to repair the problem, and that can vary from state to state. The number of repair attempts is usually three or four, but check your state law to be sure. If the manufacturer cannot repair the defect within that number of attempts, then you have a lemon. Most states set forth that you are entitled to a refund of the purchase price or a replacement vehicle, free of charge. These laws usually provide for the recovery of all consequential damages that you may have encountered as well, such as all of the payments that you have made on the vehicle, including interest, any down payment, any repair charges, etc... The lemon laws are very much geared towards protecting the purchaser of a defective vehicle. They are extremely friendly consumer statutes.
The problem is that having a lemon and getting a manufacturer to agree that you have a lemon are two very different things. After your vehicle has been in for repairs the requisite number of times, the first step that you have to take is to advise the manufacturer, in writing, of your concerns. This usually takes the form of a letter to that manufacturer which essentially revokes your acceptance of the vehicle. What that means is that you are attempting to revoke the contract between yourself and the manufacturer, and are making a demand for a refund or a replacement vehicle. The manufacturer will rarely agree to your demand at this point in time. The next step, which is mandated by many state lemon laws, is that you have to submit your claim to an Arbitration panel for review. Many states, and many manufacturers, use the Better Business Bureau as its Arbitration panel. These Arbitration panels are usually non-binding on you, the consumer, but are binding upon the manufacturer. In that regard, it has been my experience that the Arbitrators tend to lean towards the side of the manufacturers in these types of cases, because they know that you can go further, and the manufacturer cannot. After Arbitration, if it is not in your favor, the next step in your lemon law claim would be to file a lawsuit against the Manufacturer in a court of competent jurisdiction. It is at this point that the Manufacturer realizes that you are serious, and may begin to entertain realistic formal discussions regarding your vehicle's problems.
This may sound like a lot of work, a lot of hoops to jump through, and it really is, but the great thing about lemon laws is that they typically provide the consumer with Free legal representation. That's right, you can get an Attorney to work for you for free! The Attorney is not actually working for free, but the lemon laws usually provide that the manufacturer must pay your reasonable Attorney fees if the vehicle is found to be a lemon. Lemon Law Attorneys rarely charge any up front retainers, and may or may not charge you for out-of-pocket costs on such a claim. These Attorneys typically look to the manufacturer for their fees and reimbursement of costs. While I would not wish a lemon upon anyone, getting a free attorney to assist you is not half bad.
About the Author
Greg Artim is a Pennsylvania Consumer Attorney focusing on defective auto claims under the Pennsylvania Lemon Law and Breach of Warranty Matters. Visit his website at www.ihatethislemon.com
Many states have automobile based lemon laws to protect individuals who have purchased defective motor vehicles. If your state does not have an automobile lemon law, you can still be protected by what is referred to as the Federal Lemon Law, or the Magnusson Moss Act. While the law is different in each state, many similarities can be found in the state lemon laws and the Federal Magnusson Moss Act. Typically, your vehicle must exhibit a defect or non-conformity that substantially impairs the use, value or safety of your vehicle. Examples of this might be engine, transmission, braking, suspension or other serious problems. The defect must first occur within some defined mileage parameter, usually 12,000 or 18,000 miles or the first year that the car is in service. The lemon laws always give the manufacturer a reasonable number of attempts to repair the problem, and that can vary from state to state. The number of repair attempts is usually three or four, but check your state law to be sure. If the manufacturer cannot repair the defect within that number of attempts, then you have a lemon. Most states set forth that you are entitled to a refund of the purchase price or a replacement vehicle, free of charge. These laws usually provide for the recovery of all consequential damages that you may have encountered as well, such as all of the payments that you have made on the vehicle, including interest, any down payment, any repair charges, etc... The lemon laws are very much geared towards protecting the purchaser of a defective vehicle. They are extremely friendly consumer statutes.
The problem is that having a lemon and getting a manufacturer to agree that you have a lemon are two very different things. After your vehicle has been in for repairs the requisite number of times, the first step that you have to take is to advise the manufacturer, in writing, of your concerns. This usually takes the form of a letter to that manufacturer which essentially revokes your acceptance of the vehicle. What that means is that you are attempting to revoke the contract between yourself and the manufacturer, and are making a demand for a refund or a replacement vehicle. The manufacturer will rarely agree to your demand at this point in time. The next step, which is mandated by many state lemon laws, is that you have to submit your claim to an Arbitration panel for review. Many states, and many manufacturers, use the Better Business Bureau as its Arbitration panel. These Arbitration panels are usually non-binding on you, the consumer, but are binding upon the manufacturer. In that regard, it has been my experience that the Arbitrators tend to lean towards the side of the manufacturers in these types of cases, because they know that you can go further, and the manufacturer cannot. After Arbitration, if it is not in your favor, the next step in your lemon law claim would be to file a lawsuit against the Manufacturer in a court of competent jurisdiction. It is at this point that the Manufacturer realizes that you are serious, and may begin to entertain realistic formal discussions regarding your vehicle's problems.
This may sound like a lot of work, a lot of hoops to jump through, and it really is, but the great thing about lemon laws is that they typically provide the consumer with Free legal representation. That's right, you can get an Attorney to work for you for free! The Attorney is not actually working for free, but the lemon laws usually provide that the manufacturer must pay your reasonable Attorney fees if the vehicle is found to be a lemon. Lemon Law Attorneys rarely charge any up front retainers, and may or may not charge you for out-of-pocket costs on such a claim. These Attorneys typically look to the manufacturer for their fees and reimbursement of costs. While I would not wish a lemon upon anyone, getting a free attorney to assist you is not half bad.
About the Author
Greg Artim is a Pennsylvania Consumer Attorney focusing on defective auto claims under the Pennsylvania Lemon Law and Breach of Warranty Matters. Visit his website at www.ihatethislemon.com
Basics of US Patent Law
Basics of US Patent Law by Kaviraj Singh
Basics of US Patent Law
Author: Kaviraj Singh, Attorney of Trustman & Co - A Law Firm at Delhi India http://www.trustman.org
United States has the most expansive patent subject matter in the world. US Patent Office has granted patents to living organism, computer software, business methods, new alphabets and countless.
Article 1 Section 1 Clause 8 of the US Constitution empowers the congress to promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries. In furtherance of the power granted by the constitution, the US Congress enacted the first patent act in the year 1790. Though the act was amended several times, the most important amendment came about in the year 1952, when congress passed a new patent act codified under Title 35 of the United States Code. Though a few changes were made in 1986, 1996 and 1999, most provisions of the 1952 Act are still in effect.
The US Patent Law is based on the utilitarian reasoning, which is to promote the progress of science and useful arts in general public interest. An inventor gives an invention to the public and gets exclusive rights over it for a limited period of time. By granting exclusive rights to inventors for a limited period of time, the patent law provides incentive to invent, invest, design around and disclose which in turn encourages progress of science and technology.
Requirements for Patentability
To be eligible for a patent, an invention should satisfy the requirements of Patentable subject matter (Sec. 101),
a) Usefulness (Sec. 101) b) Novelty (Sec. 102) c) Non-obviousness (Sec. 103) d) Specification (Sec. 112).
Usefulness - An invention would be eligible for a patent grant only if it is useful (35 USC Sec. 101). The utility of the invention should be current, substantial and credible. Speculative or future uses are not eligible for the patent. But with regard to genetic inventions, showing of future use is generally allowed. Inventions, which have immoral uses, are not accepted to be useful.
Novelty - Novelty means new. An invention in order to be patentable should be new in the light of that exists at the time of conception of the invention. Section 102 gives a non-exhaustive list of circumstance that denies an invention of its newness.
Non-obviousness - An invention to be patentable should not be obvious or known at the time of invention. An invention is obvious, if a single prior art reference or a combination of prior art references as a whole, make the invention obvious to a person with ordinary skill in the art to which the invention belongs. The invention should be obvious at the time of conception of the invention and not at the time of contention of obviousness.
As per the Section 103 - Obviousness of an invention will be decided by determining the scope of the prior art, by finding out the differences between the prior art and the claimed invention and by ascertaining the level of ordinary skill in the art. Secondary Indicia like commercial success, unexpected results, copying, praise of experts, etc. could also be considered for making an obviousness determination.
Specification - An inventor must file a patent application containing a specification (35 USC Sec. 112). The specification should contain written description of the invention and of the manner and process of making and using it, in such full, clear, concise and exact terms, so as to enable a person with ordinary skill in the art to make and use the invention. The specification should also describe the best mode of carrying out the invention. The written description may contain drawings where and when required to clearly describe the invention. The specification should conclude with one or more claims particularly pointing out and definitely claiming the subject matter of the invention. The claims define the metes and bounds of the invention claimed by the inventor. The inventor gets rights only over what is defined in the claims.
The basic requirement for patentability is that the invention should fall within the scope of patentable subject matter as defined under Section 101. (35 USC Sec. 101). As per section 101, any new and useful invention or discovery, which is a process, machine, manufacture or composition of matter is patentable. It also includes any new and useful improvements made to an existing invention. An invention generally falls under more than one category.
The courts have construed the terms process, machine, manufacture and compositions of matter very broadly. In Diamond v. Chakrabarty, the United States Supreme Court while upholding the patentability of an oil-eating bacterium stated that everything under the sun made by man is patentable.
Not eligible for Patentability
The statute does not expressly bar any subject matter from patentability, the Courts have held physical phenomenon, abstract ideas and products of nature to be outside the scope of patentability.
An invention is not considered new or novel if the same were on sale for more than a year before the filing date of patent application. Selling the invention for testing deprived it of the novelty. Even making an offer to sell or making a contract of sale for the future is fatal to novelty of the invention and it shall not patented.
An invention is not new if it is known or used by anyone in the United States or printed or published in a foreign country. The use should be publicly accessible use and not secret use.
An invention can not be patented, if the inventor had abandoned the invention to the public. Taking an invention, which has been dedicated to the public out of the public domain, is against the basic objective of patent law.
An invention is not patentable if it has been patented in a foreign country twelve months before the filing date of the present patent application.
Priority date
As per the Section 102 - For ascertaining the priority, the date of conception would be taken into consideration. The inventor who conceived first and was diligent in reducing the invention to practice would be considered as the first inventor. An invention is not patentable if another person before the applicant has invented it. That first inventor should not have abandoned, suppressed or concealed his invention.
About the Author
Author: Kaviraj Singh, Attorney of Trustman & Co - A Law Firm at Delhi India http://www.trustman.org
TRUSTMAN is an organization of qualified professionals based at Delhi, India of high caliber and other firms to provide multi disciplinary services at one place to all businesses / individuals and firm is capable of addressing and resolving several business and legal issues.
Basics of US Patent Law
Author: Kaviraj Singh, Attorney of Trustman & Co - A Law Firm at Delhi India http://www.trustman.org
United States has the most expansive patent subject matter in the world. US Patent Office has granted patents to living organism, computer software, business methods, new alphabets and countless.
Article 1 Section 1 Clause 8 of the US Constitution empowers the congress to promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries. In furtherance of the power granted by the constitution, the US Congress enacted the first patent act in the year 1790. Though the act was amended several times, the most important amendment came about in the year 1952, when congress passed a new patent act codified under Title 35 of the United States Code. Though a few changes were made in 1986, 1996 and 1999, most provisions of the 1952 Act are still in effect.
The US Patent Law is based on the utilitarian reasoning, which is to promote the progress of science and useful arts in general public interest. An inventor gives an invention to the public and gets exclusive rights over it for a limited period of time. By granting exclusive rights to inventors for a limited period of time, the patent law provides incentive to invent, invest, design around and disclose which in turn encourages progress of science and technology.
Requirements for Patentability
To be eligible for a patent, an invention should satisfy the requirements of Patentable subject matter (Sec. 101),
a) Usefulness (Sec. 101) b) Novelty (Sec. 102) c) Non-obviousness (Sec. 103) d) Specification (Sec. 112).
Usefulness - An invention would be eligible for a patent grant only if it is useful (35 USC Sec. 101). The utility of the invention should be current, substantial and credible. Speculative or future uses are not eligible for the patent. But with regard to genetic inventions, showing of future use is generally allowed. Inventions, which have immoral uses, are not accepted to be useful.
Novelty - Novelty means new. An invention in order to be patentable should be new in the light of that exists at the time of conception of the invention. Section 102 gives a non-exhaustive list of circumstance that denies an invention of its newness.
Non-obviousness - An invention to be patentable should not be obvious or known at the time of invention. An invention is obvious, if a single prior art reference or a combination of prior art references as a whole, make the invention obvious to a person with ordinary skill in the art to which the invention belongs. The invention should be obvious at the time of conception of the invention and not at the time of contention of obviousness.
As per the Section 103 - Obviousness of an invention will be decided by determining the scope of the prior art, by finding out the differences between the prior art and the claimed invention and by ascertaining the level of ordinary skill in the art. Secondary Indicia like commercial success, unexpected results, copying, praise of experts, etc. could also be considered for making an obviousness determination.
Specification - An inventor must file a patent application containing a specification (35 USC Sec. 112). The specification should contain written description of the invention and of the manner and process of making and using it, in such full, clear, concise and exact terms, so as to enable a person with ordinary skill in the art to make and use the invention. The specification should also describe the best mode of carrying out the invention. The written description may contain drawings where and when required to clearly describe the invention. The specification should conclude with one or more claims particularly pointing out and definitely claiming the subject matter of the invention. The claims define the metes and bounds of the invention claimed by the inventor. The inventor gets rights only over what is defined in the claims.
The basic requirement for patentability is that the invention should fall within the scope of patentable subject matter as defined under Section 101. (35 USC Sec. 101). As per section 101, any new and useful invention or discovery, which is a process, machine, manufacture or composition of matter is patentable. It also includes any new and useful improvements made to an existing invention. An invention generally falls under more than one category.
The courts have construed the terms process, machine, manufacture and compositions of matter very broadly. In Diamond v. Chakrabarty, the United States Supreme Court while upholding the patentability of an oil-eating bacterium stated that everything under the sun made by man is patentable.
Not eligible for Patentability
The statute does not expressly bar any subject matter from patentability, the Courts have held physical phenomenon, abstract ideas and products of nature to be outside the scope of patentability.
An invention is not considered new or novel if the same were on sale for more than a year before the filing date of patent application. Selling the invention for testing deprived it of the novelty. Even making an offer to sell or making a contract of sale for the future is fatal to novelty of the invention and it shall not patented.
An invention is not new if it is known or used by anyone in the United States or printed or published in a foreign country. The use should be publicly accessible use and not secret use.
An invention can not be patented, if the inventor had abandoned the invention to the public. Taking an invention, which has been dedicated to the public out of the public domain, is against the basic objective of patent law.
An invention is not patentable if it has been patented in a foreign country twelve months before the filing date of the present patent application.
Priority date
As per the Section 102 - For ascertaining the priority, the date of conception would be taken into consideration. The inventor who conceived first and was diligent in reducing the invention to practice would be considered as the first inventor. An invention is not patentable if another person before the applicant has invented it. That first inventor should not have abandoned, suppressed or concealed his invention.
About the Author
Author: Kaviraj Singh, Attorney of Trustman & Co - A Law Firm at Delhi India http://www.trustman.org
TRUSTMAN is an organization of qualified professionals based at Delhi, India of high caliber and other firms to provide multi disciplinary services at one place to all businesses / individuals and firm is capable of addressing and resolving several business and legal issues.
Types of Patent (US Patent Law)
Types of Patent
From Wikibooks, the open-content textbooks collection
Utility patents
Most patents are utility patents, so called because they cover "useful" processes and products. This text focuses on utility patents.
A utility patent can cover a physical product (e.g. a chemical compound), or it can cover a process for using a product (e.g. a method for creating a chemical compound). The scope of these concepts has changed over time. For example:
Artificially-created organisms were not patentable as products until the Supreme Court's decision in Diamond v. Chakrabarty, 447 U.S. 303 (1980), which held that a genetically-engineered bacterium was a "nonnaturally occurring manufacture or composition of matter" entitled to product protection.
Business methods were not patentable until the Federal Circuit's decision in State Street Bank v. Signature Financial Group, 149 F.3d 1368 (1998), holding that a patentable process need not act on anything tangible.
A utility patent is in effect from the date the patent issues until twenty years from the date the application for patent was filed, so long as periodic maintenance fees are paid.
Design patents
Design patents are awarded to original designs for articles of manufacture. Like utility patents, design patents require novelty and nonobviousness. There is no utility requirement, but there are two other criteria for design patents. First, they must have ornamentality—they must be "the product of aesthetic skill and artistic conception." Design patents must also be not primarily functional. If the design is primarily functional, it should be the subject of a utility patent, not a design patent.
Design patents last for fourteen years.
Plant patents
Plant patents can be granted for any distinct and new variety of asexually-reproducing plant. Overall, plant patents are not as strong as utility patents in terms of protection.
Plant patents last twenty years from the date of application.
From Wikibooks, the open-content textbooks collection
Utility patents
Most patents are utility patents, so called because they cover "useful" processes and products. This text focuses on utility patents.
A utility patent can cover a physical product (e.g. a chemical compound), or it can cover a process for using a product (e.g. a method for creating a chemical compound). The scope of these concepts has changed over time. For example:
Artificially-created organisms were not patentable as products until the Supreme Court's decision in Diamond v. Chakrabarty, 447 U.S. 303 (1980), which held that a genetically-engineered bacterium was a "nonnaturally occurring manufacture or composition of matter" entitled to product protection.
Business methods were not patentable until the Federal Circuit's decision in State Street Bank v. Signature Financial Group, 149 F.3d 1368 (1998), holding that a patentable process need not act on anything tangible.
A utility patent is in effect from the date the patent issues until twenty years from the date the application for patent was filed, so long as periodic maintenance fees are paid.
Design patents
Design patents are awarded to original designs for articles of manufacture. Like utility patents, design patents require novelty and nonobviousness. There is no utility requirement, but there are two other criteria for design patents. First, they must have ornamentality—they must be "the product of aesthetic skill and artistic conception." Design patents must also be not primarily functional. If the design is primarily functional, it should be the subject of a utility patent, not a design patent.
Design patents last for fourteen years.
Plant patents
Plant patents can be granted for any distinct and new variety of asexually-reproducing plant. Overall, plant patents are not as strong as utility patents in terms of protection.
Plant patents last twenty years from the date of application.
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