Articles Tagged with Contract

https://www.orangecountybusinessattorneyblog.com/files/2017/02/photo-Ms.-America-pageant-300x225.jpgThose of us running businesses have a supporting cast, whether they’re contractors, suppliers, funders, banks, attorneys or employees. If a trusted cast member disappears at a critical time what do you do? Susan Jeske found herself in that situation in September. Like most of us she made due with what she had and went forward.

Jeske owns the Ms. America® Pageant. She purchased it in 1999 after winning the competition in 1997. Ms. America contestants are often well into their careers, sometimes are married and often range from 26 to 40 years old. The 2017 event was scheduled for September 3 in Brea. At the last minute Jeske got some bad news.

She learned on August 30 that Costa Mesa based BTB Event Productions, the company hired to produce the pageant, was shutting down and their equipment was being sold off. As a result Jeske was left scrambling to find a stage, runway and proper lighting. “I have 43 contestants flying in from across the country that are coming in tomorrow and I don’t have anything,” Jeske told the Orange County Register on August 31.

photo - contract signers by Dan MoyleAn easy way to get sued is to violate a contract. That can be very easy if you sign a contract without reading or understanding it, making it that much more likely you won’t comply with its terms. If you agree to a contract you don’t understand, you could commit your company to spending all kinds of resources in ways you never imagined.

In a piece on LinkedIn Maryland author and real estate attorney Jack Garson described a meeting he had with one of his clients, one who is normally confident but that day appeared to be near tears and panic stricken. He brought with him a copy of a contract and a copy of a lawsuit, one in which he was the defendant. Garson read the lawsuit.

Next, I reviewed the contract. Now I understood my client’s new emotional state — especially the panic part.

“Did you read this contract?” I asked, ever so gently, as my Humpty-Dumpty client teetered in front of me.

“No,” he replied.

“I’m just curious. Why didn’t you read the contract?”

“The other side said it was standard. Plus, I was in a hurry.”

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Photo Credit to Simon DeanEd Schultz hosts a TV show on MSNBC, not so imaginatively titled, “The Ed Show.” There’s so much more than a TV show going on, according to a lawsuit filed by Michael Queen.  He claims Schultz agreed to a partnership with him to help develop the show and get it on the air, and in exchange for his help, Queen would be paid a salary and a quarter of all the profits Schultz obtained from it. Like in a bad soap opera, Schultz is accused of walking out on the deal, leaving Queen holding the bag.

Not to be outdone, Queen hired an attorney and sued Schultz for breach of contract and for breach of fiduciary duties owed to him as a partner. Schultz counterclaimed, alleging fraud, slander and libel.

Legal fight starts up between two men who were working together

The good news for Schultz is that initially the judge in the U.S. District Court for the District of Columbia dismissed Queen’s case, claiming there was no valid contract between the parties nor was there a partnership. The judge also dismissed Schultz’ counterclaims. The bad news for Schultz is that Queen appealed the decision, claiming these issues should’ve been decided by a jury, not by the judge in a preliminary motion. The U.S. Court of Appeals for the District of Columbia Circuit ruled there was no contract, but whether or not there was a partnership needs to be decided by a jury and remanded the case back to the trial court for further proceedings.

In 2008 Queen was an NBC employee when he approached Schultz, then a radio talk show host, and asked if he wanted help in getting a TV show. What follows is disputed by the parties, but Queen’s version is that Schultz agreed. The two of them, plus a TV director who later dropped out the proposed deal, verbally agreed to form a partnership with Queen getting a salary and 25% of the profits from the show. Schultz refused to sign a proposed written partnership agreement (that left the amount of the salary blank) but later e-mailed Queen, “(A)ny TV deal will obviously involve you. I will not do a TV deal without your involvement and that includes a financial involvement. Rest assured, we are together on this.” The two were less than together after Schultz agreed to do a TV show for MSNBC in 2009. He cut Queen a check to cover expenses he incurred and washed his hands of him.

Appeals court brings plaintiff’s case back from the dead

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photo - contract enforcement
Contract Enforcement in California

Business couldn’t be conducted and businesses couldn’t exist without contracts of one kind or another. A contract is a binding agreement between parties for an exchange of things or services. It can be an exchange of money for a product or service or the payment of money from one party in exchange for another party to do or not do something.

For a legal action to be successful, the person filing the lawsuit would have to prove,

Legal DocsWhen Aaron Kushner acquired the O.C. Register last year Kushner claims that the Register’s former owners, Angelo Gordon, withheld the true value of the company. Now, the former owners are suing Kushner for $17.45 million.

The lawsuit began when Kushner’s holding company, 2100 Trust accused the previous owners of the O.C. Register of intentionally misinforming Kushner’s company by failing to give a complete assessment of pension obligations, credit card debt, overhead, and several other indicators of financial stability. As a result, 2100 Trust said that the remaining funds from the deal would not be released from escrow because the price of the register was grossly overinflated and will lead to liabilities of $62.3 million for Freedom Communications.

Angelo Gordon balked at the allegations of misrepresentation by filing a lawsuit earlier this month demanding full payment of the remainder of the escrow funds that Kushner ordered back. The lawsuit was filed in Delaware, where both companies are based.

OLYMPUS DIGITAL CAMERAAlthough Michael Jackson died in 2009, new lawsuits against the deceased international pop star’s estate continue to come forward in light of Jackson’s continued strong record sales. In October one of Jackson’s most famous producers, Quincy Jones, sued Jackson’s estate and Sony Music for $10 million alleging a breach of contract and breach of the covenant of good faith and fair dealing.

The lawsuit arose from the use of Jackson’s work after his death. Jackson’s estate allegedly entered into contracts to allow several republications of works that Jones had originally produced. The works were authorized for Cirque du Soleil productions and several soundtracks and albums.

Jones alleges that his contract with Jackson’s production company, now MJJ, in 1978 and 1985 provided him with the right to be the first to remix or re-edit the recordings and also required that any use of the master recordings required his consent and a certain percentage of the royalties from the remixes.

Jones’ lawsuit states that he was denied his right to remix or re-edit the recordings, and also denied additional compensation when MJJ entered into an agreement with Sony to share profits of the master recordings and divert revenues as profits instead of royalties to deny Quincy payment. The lawsuit alleges that this attempt to avoid paying Quincy proper royalties violated the covenant of good faith and fair dealing.

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Anticipatory BreachUnder California Civil Jury Instructions (CACI) 324 – Anticipatory Breach, contracts can be broken even before the performed services are scheduled to transpire. Plaintiffs, then, have remedies for what is known as an ‘anticipatory breach of contract.’

However, before you can initiate a valid lawsuit your claim must be justified by meeting the burden of proof required to sustain your allegations. This requires the advice of an experienced business litigation attorney, and a better understanding on your part of the subject matter of your claim, the requirements to meet the claim, and any additional legal options that may available to you.

What is an anticipatory breach?

An anticipatory breach is when a contract is considered ‘broken’ because of the refusal of one party to perform their commitment as part of said contract, even if the performance of the commitment isn’t scheduled to happen until a specified date in the future. In other words, if the other party has made it very clear that they won’t be able to meet their future obligations then you have the foundation for an anticipatory breach of contract claim.

This is also referred to as ‘repudiation.’ It occurs when one party to an agreement has, by some means, articulated that they cannot – or will not – be performing their portion of the agreement. In effect, they have retracted their promise and unlawfully ended a binding contract under California Breach of Contract Laws.

Three Types of Repudiation

Before you go further, be knowledgeable about the type of repudiation you’re accusing the breaching party of because – again – you will have to prove your claim in a court of law. Be certain that your claim falls into one of the three recognized categories. This not only guarantees that you have cause to file suit, but also that your litigating attorney’s argument will be carefully customized to the distinctive elements of your claim and the precise details of your evidence and claim.

Precise Words – Also known as ‘express repudiation,’ you’ll have the strongest claim if you can prove that the adverse party stated very clearly and directly that they would not be performing their portion of the agreement. It must be obvious and clear-cut that they intend to sever the contractual arrangement and it must be expressed directly to you; this can be accomplished through an email, phone call, Skype conference, in person encounter, or some other form of direct communication.

Implicating Actions –The second type of repudiation occurs when the actions and conduct of Continue reading

OKTo be honest, even as an attorney, sometimes I don’t put the agreement in writing. Sometimes, the circumstances just make it impractical to put the engagement in writing. Other times, the assignment is just too small, and I don’t want to spend time memorializing the oral agreement. On other occasions, I’m doing work for friends, and I don’t want to be perceived as not trusting my own friends. However, this decision has led to mistakes. Luckily, they weren’t costly. Soon, enough mistakes accrued to help me realize the importance of having a written agreement.

Contrary to the advice from most attorneys, having a written agreement is not just needed because you don’t trust others. Instead, it’s to make sure that both of you have a “meeting of the minds.” In other words, both of you need to know if everyone is agreed to the same terms or have the same expectations of the obligations under the contract.

Before, I used to feel uneasy asking a friend to sign a retainer agreement because I didn’t want to be perceived as someone who wasn’t trusting of others, especially my own friends. However, throughout the years, I have learned to look at the situation differently. I now believe that the written agreement is something that I can use to make sure my friends and I are agreeing to the same thing. I want to make sure that my friend has the same expectation about the scope of the services that I can perform as I do. Without knowing the expectations of others, I can’t effectively perform my job, and I could lose a friend in the process. Often, I advise my clients in a business or real estate transaction to use the contract as a checklist and to make sure that each item on the contract was discussed. This helps make sure that everyone knows what was agreed to and what is expected. Doing this eliminates most of the surprises at the end.

Additionally, our memories are imperfect as humans, and sometimes, they even fade. Thus, although we are clear about our agreement today, we may not remember all the details six months from now. The written agreement will help us to recall what the parties agreed to previously. It serves as a reference point that we can go back to for determining whether either party has deviated from duties or obligations under the contract.

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