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ATTORNEY’S FEES PROVISIONS IN CONTRACTS

ATTORNEY’S FEES PROVISIONS IN CONTRACTS

If you are reviewing or drafting a contract, one thing to consider is attorney’s fees. The general rule is that each side pays its own fees. For (oral or written) contract cases, a party may be able to recover its reasonable and necessary attorney’s fees. Texas has a statute which governs so long as a party prevails on the claims for breach and recovers damages (money). If the parties negotiate a written contract, they should take care to consider how attorney’s fees should be handled if there is a lawsuit if the deal goes south. THE PARTIES CAN DECIDE THE REQUIREMENTS FOR RECOVERY OF ATTORNEY’S FEES The parties to a contract can provide for either stricter or looser requirements for the recovery of fees. For example, maybe you don’t recover any money…
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EVEN A SINGLE MEMBER LLC SHOULD HAVE AN OPERATING AGREEMENT

EVEN A SINGLE MEMBER LLC SHOULD HAVE AN OPERATING AGREEMENT

When clients ask me whether they should go ahead and get an Operating Agreement, I always say ‘yes’ even when I am forming a single-member LLC. Before you go accusing me of an upsell or add-on, I have my own reasons and I will lay them out below. If you’d like to speak with me about your business and my thoughts on what kind of Operating Agreement is right for you, send me a quick email from the Contact Us page and we can set up a time to talk. First, let’s get a basic definition of an Operating Agreement.  It is essentially, at its most basic level, a contract signed between all of the members of the LLC agreeing how the company will be run, including management structure, member authority,…
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AN ASSUMED NAME IN TEXAS IS NOT A TRADEMARK OR A BUSINESS ENTITY

AN ASSUMED NAME IN TEXAS IS NOT A TRADEMARK OR A BUSINESS ENTITY

A TEXAS ASSUMED NAME GIVES THE PUBLIC A WAY TO FIND OUT WHO OWNS THE BUSINESS. An assumed name is a way to notify the public who they are doing business with when an individual or a company is doing business under a name other than the individual’s name or the entity name. The assumed name is likely more brandable than an entity name, especially in the situation of a sole proprietor. In the event someone needs to contact the true owner of a business, including for a lawsuit such as a personal injury or intellectual property issue, they can look up the owner who is using an assumed name. HOW TO FILE AN ASSUMED NAME. An assumed name is filed with the county clerk where you are doing business…
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WHY YOU NEED TO TRADEMARK YOUR BUSINESS NAME

WHY YOU NEED TO TRADEMARK YOUR BUSINESS NAME

WHY YOU NEED TO PROTECT YOUR BUSINESS WITH A TRADEMARK. People often associate the term trademark by way of naming examples of famous marks. These marks identify the source of the goods such as McDonalds (and their use of “Mc_____(everything)”. This means a couple of key things. First, the seller controls the reputation of the business so that another business which is named in a similar manner does not damage the reputation by providing goods or services of poor quality. Another key issue is to prevent another business from using your name to promote their business. Essentially, this is called trading off of your business or palming off goods in such a way that one business rides the coattails of another well known business and makes sales due to deception of…
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QUESTIONS TO ASK WHEN BUYING A TEXAS BUSINESS

WHY DID THE SELLER PUT THE BUSINESS ON THE MARKET? There can be many reasons a business owner wants to exit, such as: health; family; market or demand changing for the business; commonly the owner is worn out or in need of a change of scenery. If you know the reason, perhaps this can allow you room to negotiate the price. Does the owner need to get out from under the business asap? If so, this may help you acquire a business at a price well under market value. Does the owner desperately need funds for some reason (bills, another business, retirement, family, new purchase)? If so, perhaps this helps you negotiate a favorable all cash offer. IS THE SELLER SPEAKING TO MULTIPLE INTERESTED SERIOUS BUYERS? If the seller is…
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WHY YOU SHOULD THINK TWICE ABOUT ARBITRATION CLAUSES

WHY YOU SHOULD THINK TWICE ABOUT ARBITRATION CLAUSES

THINKING AHEAD AND INCLUDING AN ARBITRATION CLAUSE CAN REDUCE LEGAL FEES When you are putting the deal together and going back and forth on the terms, a dispute can seem like a far off concern and overly pessimistic. But, it is best to at least consider how you want to handle any issues that arise under the contract. Arbitration clauses are intended to direct ahead of time how contract disputes will be resolved.  Arbitration is a method of resolving disputes outside of the typical court system. The parties sign off on arbitration in the contract and based on the language in the arbitration clause, this will be the manner to handle any issues which would otherwise result in a lawsuit. Here are some of the issues to consider in weighing the…
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HOW USING AN INTERNET FORM CONTRACT CAN GET YOU IN TROUBLE

HOW USING AN INTERNET FORM CONTRACT CAN GET YOU IN TROUBLE

REASONS NOT TO USE A FREE CONTRACT FORM If you do a quick google search for a particular contract on the internet, you’ll find all kinds of forms you can view, or even download, to make use of for your business. The best part is these documents are free, and by taking the do-it-yourself approach you can skip your attorney and all the costs that come along with him. You are, after all, a wearer of many hats as a business owner so it is only natural you would take the initiative to be the legal department as well! But, despite the upside noted, there are quite a few issues that come along with using free internet forms instead of working with an attorney. 1. DID YOU EVEN PICK THE RIGHT FORM? You may think…
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SUCCESSION PLANNING FOR YOUR TEXAS BUSINESS

SUCCESSION PLANNING FOR YOUR TEXAS BUSINESS

Most Texas business owners and start-ups don’t think about a developing a business succession plan and strategy when they are choosing an entity and organizing the company. If you have invested time and money in starting your business, assuming you will live forever to operate your business is not a responsible business succession plan. It’s a plan doomed to fail. And with it, the business you’ve worked so hard to build. As with your customized business contracts and management documents, there is no cookie-cutter business succession plan that works for every business. Every business is different and needs a custom plan that takes into account your goals for the business. You need to written plan and agreement, and it’s a lot easier to do this before the crisis occurs. You…
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DOING BUSINESS IN TEXAS – ENTITY OPTIONS FOR STARTUP

DOING BUSINESS IN TEXAS – ENTITY OPTIONS FOR STARTUP

There are many options for Texas business structures a start-up or entrepreneur may select during launch of a new business. The choice of entity is a decision to be reached with your co-venturers, if any, and with an eye towards taxes, limiting liability, and how the entity will be governed. The choice of entity should be made prior to any business operations, and the business should have clearly defined by-laws to govern how the entity will be operated by the owners. Too often the owners neglect to adopt by-laws and there is no guidance for how to resolve disputes between the owners as far as voting, division of power and duties, and the distribution of profits and allocation of losses. You should discuss the proper entity for your new business…
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YES, YOU CAN SUE BASED ON AN ORAL CONTRACT

YES, YOU CAN SUE BASED ON AN ORAL CONTRACT

I’ll tell you what you don’t want to hear but already know: in Texas you should have gotten the deal in writing. Nevertheless, you made a verbal contract and the other party didn’t follow through on their promises. Now, you’ll inevitably deal with a “he said, she said” argument about whether there is even a real contract in the first place. PRELIMINARY DISCUSSIONS ARE NOT ENOUGH Preliminary negotiations of a potential contract are not enough. Among other things, you need a specific offer with defined terms and an acceptance of the offer to contract so the parties know their responsibilities under the contract. This likely includes the price, what is to be performed by each party, and any relevant dates for performance and payments. It is not enough to just…
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