Articles Posted in Business Litigation

Due diligence is checking up on the details of a transaction. Typically, due diligence occurs when there’s a purchase of a business. The buyer of the business is, of course, wanting to find out are the representations of the seller accurate? They’re going to want to go look through the papers. They want to make sure the financials are accurate, that they’re not being lied to or misled. They’re going to want to go and check with customers to determine if these really were the sales of the business. The due diligence period is to determine if you’re really buying what the seller is representing and whether the value the seller puts on it is really a fair value.

There are many different types of contracts, but the most common component of a contract is offer, acceptance, and consideration, meaning that one party offers something, the other party supplies something else, and there’s mutual promises exchanged. There are other types of contracts also, such as unilateral contracts, where one party has offered to have a person provide a service, and the other party says nothing and simply provides a service in exchange for what was offered. For example, somebody offers in writing to pay $50 if you mow their lawn, the other person simply mows the lawn, says nothing. A contract’s been formed and the money is owed once the project is completed.

Liquidated damages are an agreed fixed amount of money that parties enter into in a contract where they said if another party breaches it, this is going to be the amount they agree upon in damages. Liquidated damages frequently exceed what the law permits and there are legal limitations as to what a liquidated damage provision will allow.

It has to have a nexus or a relationship to what the real damages would be and it’s not supposed to be a penalty. Frequently you’ll have liquidated damage provisions that are not enforceable and they’re really designed to be a penalty and they will not be enforceable in court.

A registered agent is for a corporation and the purpose is to accept service of process. A corporation is a pay per person and that person can designate an individual, a human being or another company to accept legal papers, such as, a lawsuit, and that is the designated person to receive these documents on behalf of the corporation.

Whenever your business is sued, the most important thing is to promptly address the situation. Retaining legal counsel, getting legal advice is very important. Sometimes people wait and they wait til the last second. A default sometimes can be entered if you wait past the deadline. It’s very important to be proactive and address the situation early, and try to get the litigation resolved beforehand or before it gets too far into the case. It’s much less expensive, and it’s a lot less stressful.

The fictitious business name is typically how you do business under. It’s not necessarily your legal corporate name. For example, a corporation may have a Do Business As McDonald’s, or it may Do Business As the Chicken Place, but its corporate name is something different. It may have an actual legal corporate name as ABC Inc. Doing Business As McDonald’s, or Doing Business As the Chicken Place. The DBA name typically, or the fictitious name, is how you want to market this to the public, not necessarily how you have incorporated it for your bank accounts and other legal documents.

A shareholder derivative lawsuit is a lawsuit that a shareholder will bring to recover money that is owed to the corporation where that shareholder is an investor in. For example, if one of the officers of the corporation is stealing from the corporation a shareholder may recognize that and then bring a lawsuit on behalf of the corporate entity to recover money from that corporate officer. In the lawsuit, when the money is recovered it goes back to the corporation which helps protect the investment of the shareholder who brought the lawsuit.