The Court Of Public Opinion

What is a Guarantee?
A guarantee is a written promise by you (the guarantor) that the person who is obtaining credit (the debtor or borrower) will keep to all the terms and conditions of their contract (the credit contract, or loan agreement). The guarantee means that if the person borrowing the money is unable to repay the loan then you, as the guarantor, will become legally liable to pay whatever is owed. Your guarantee may either be oral or written. A written guarantee is best because it will withstand any attacks, whereas an oral one is difficult to prove.

Who is a Guarantor?
The guarantor is the party who agrees to be responsible for the payment of someone else’s debts. That is, you are the guarantor if you promise to repay a loan that the borrower of the money does not repay. The lender will usually ask for a guarantee when lending money especially if they think the borrower will have difficulty repaying the loan.

The guarantor makes the promise or guarantee to a creditor or lender so that the lender will have a certain amount of confidence in the deal because he/she will know that should the borrower not be in a position to repay the amount taken, the guarantor will take responsibility for it.

Most guarantees provide that the lender or creditor can call on the guarantor to pay the debt in full without requiring any payments from the borrower and without seeking any other normal remedies against the borrower.

Why ask for Guarantees?
People on low incomes and many young people, often find it hard to get a loan without having someone guarantee it. The lender may have doubts about the person’s ability to repay the loan, especially if they are not in a good job or if they are not earning sufficient income to provide for the loan as well as their living costs. So the lender seeks a guarantor.

The lender will be happier arranging a loan if there is an adult guarantor with the means to meet the repayments should the borrower default. When you, as the guarantor, sign the contract of guarantee you will be agreeing to meet all the terms and conditions of the borrower’s loan if the borrower stops paying.

It’s a Legal Contract
Guaranteeing a loan is a contract and is therefore a legally binding arrangement between the parties. It is what as known as a contract to perform a promise or discharge liability (of the third person who is the borrower) in case of his/her default.

There are basically 3 parties involved:

1. The surety or guarantor.
2. The principle debtor or borrower.
3. The creditor or lender.

If you are guaranteeing a loan for a purpose, you can withdraw any time before the credit is approved. If you are called on to honour a guarantee you have given, the first thing you need to do is see a lawyer straight away. In any event you should not enter into any guarantee without getting advice, preferably from a lawyer or your accountant.

Guarantee in Writing
To be enforceable against you, the guarantee of another person’s debt has to be in writing and must be signed by you.

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It is important for any prospective business purchaser to perform due diligence in researching a potential target business. Some of the documents you will need to collect and review in your analysis of whether a particular business would be a good acquisition include the following types of documents.

NOTE: THIS IS ARTICLE IS FOR INFORMATIONAL PURPOSES ONLY. IT IS NOT INTENDED TO BE CONSTRUED AS LEGAL ADVICE.

1. Corporate and Organizational

o Certified copy of articles of incorporation and bylaws of company and subsidiaries as currently in effect;

o Partnership agreement and any amendments thereto;

o A copy of the most current organization chart available of the company;

o A list of states and foreign countries (if any) in which the Company is qualified to do business; and

o All names under which the company has done business in the past five years; this includes registered and unregistered trademarks, fictitious name statements (commonly referred to as d/b/a filings).

2. Financing Documents

o All loan agreements, debt instruments, and other financing instruments, and all related material documentation, to which the company is a party.

o A list of all mortgages, liens, pledges, security interests, charges, or other encumbrances to which any property (real or personal) of the company is subject and all related material documentation;

o Schedule of all short-term and long-term debt (including capitalized leases, guarantees, and other contingent obligations).

3. Financial Statements

o All audited and un-audited financial statements;

o Brief description of contingent liabilities involving the Company, such as pending lawsuits and threatened litigation;

o Name of accountants and length of relationship with accountants; indicate whether the accountants own any interest in or hold any position with the Company or its subsidiaries;

o Budgets, business plans or projections (for the Company and any of its subsidiaries) made on a quarterly, annual or other basis during the past 3 fiscal years.

4. Contracts & Leases

o Real estate leases. Consider the term of the lease and the quality and location of the space and decide whether your business needs would be satisfied;

o Equipment leases;

o Purchase and sale contracts for goods and services [uniforms; food suppliers

5. Tax Matters

o Are back taxes owed?

o Are there any pending tax suits?

o Does any local, state or federal taxing authority have any liens against the real property or business personal property you would be acquiring? If so penalties, interest and attorneys fees could greatly increase the cost of satisfying the tax lien.

6. Identities of All Directors, Officers & Shareolders

o You ought to perform a background check on each of these people to see whether there is any pending litigation against them.

7. Owned Real Estate

o Need a list of owned real estate to help in valuing the business and determining liabilities.

8. Insurance

o You would want to have copies of the insurance policies, as well as the name and contact information for the insurance agent, going back four years from the time of purchasing the business. Check to see whether the insurance policies would cover you, as the new company, for any damages alleged to have occurred before you acquired the business.

Finally, many other factors related to financial and other matters must be considered before taking the plunge.

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NOTE: THIS IS ARTICLE IS FOR INFORMATIONAL PURPOSES ONLY. IT IS NOT INTENDED TO BE CONSTRUED AS LEGAL ADVICE.

There are numerous legal considerations every entrepreneur must face when starting a new business, and raising startup capital is one that can be fraught with danger. Hiring a qualified securities attorney is not a luxury; its a necessity for businesses seeking to raise capital from third parties. Some of the key general considerations are:

Properly organizing the company as business entity under state law;

Ensuring the company has issued enough authorized shares of stock of the same type that will be offered to investors;

Make sure that any existing and potential legal problems are resolved before issuing stock to investors;

Have an experienced securities attorney examine the federal securities laws, as well as the securities laws of any state in which stock may be offered to prospective investors, to make sure the company and its investment offer complies with those laws;

Have your attorney explain in writing the potential personal liabilities of the companys officers and directors if the company violates any federal or state securities laws in raising capital. Potential penalties can be very serious, ranging from civil fines to jail time;

Make sure that your written investment prospectus contains all required state and federal disclosure language in the appropriate places;

Your attorney should review the business plan and financial statements for possible untrue and/or misleading statements; and

Obtain a written opinion from your attorney whether your particular investment opportunity is required to be registered with the appropriate regulatory agencies.

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NOTE: THIS IS ARTICLE IS FOR INFORMATIONAL PURPOSES ONLY. IT IS NOT INTENDED TO BE CONSTRUED AS LEGAL ADVICE.

Electronic communications–particularly email–may contain a treasure trove of evidence in commercial litigation matters. There are three key reasons for this fact. First, email is a very informal means of communication. Why? I don’t know, it just is. Though I personally insist on specific grammer and sentence structure in my hardcopy written correspondence, court pleadings, etc., in emails I sometimes choose not to follow the rules of written English.

Second, though intellectually many of us know it is not, email feels anonymous. I’m sure there have been studies conducted in effort to understand why email feels anonymous. Maybe it’s because of the instantaneous nature of email–you can simply vent your emotions and knee-jerk reactions immediately and press the send button, rather than having time to reflect on your written thoughts as you otherwise would if you were forced to sit down and write a letter; sign it with your own hand; put it in an envelope; put a stamp on in it; and take it to the mailbox and mail it. Whatever the reason(s), the fact of the matter is that email does feel anonymous.

The third reason email evidence can contain critical evidence in a commercial litigation case: permanence and retrievability. Most people don’t realize that when they delete an email from their email program it actually remains on the computer or network unless and until the portions of the computer’s memory containing the email are overwritten by other information. You can be certain, however, that every single electronic commuincation you make–email or otherwise–is being recorded somewhere. Perhaps on your company’s network server, perhaps at your Internet service provider, or perhaps on your own computer’s hard drive. Savvy litigators know this fact and, depending the stakes of the case, you could end up receiving a letter such as this should your business find itself in a business dispute:

Dear Mr. John Doe:

In order to alleviate any burden upon you, we are prepared to immediately enlist the services of a computer forensic expert to image and examine all drives and media in your custody and control which may contain Electronic Data relevant to this matter. If you enlist your own computer forensics expert to generate evidentiary images of all electronic evidence identified above, demand is made that such expert utilize industry standard computer forensic software in order to facilitate and enable the processing and exchange of such evidence in this matter.

Should your company receive a letter like this, you should take it extremely seriously. Continuing to use any computers or other devices identified in such a letter will result in data being overwritten, which the courts would interpret as destruction of evidence. Destroying evidence can not only result in serious sanctions against the company or individual in the case at hand, as we saw during the Enron mess it can also result in criminal prosecution.

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Over and over you will hear you need a business entity for your start-up. This raises the question or whether you are actually required to have one.

When starting a business, one can run into information overload. One area this can occur with is business entities. With all of the information on the web and various discussions of this and that, you can easily get confused. Before you figure out the intricacies of a corporation, for instance, one needs to deal with the basic question of the necessity.

There is no legal requirement in any state that you form a business entity. It simply isnt required to get up and running with your business. If you do not incorporate, you simply function as a sole-proprietor if you are the only owner and a partnership if there are two or more people involved. So, why all the discussion about incorporation? It is a smart move.

When you run a business, you face the risk of being sued to the high heavens. You also face the possibility the business will fail. In both instances, the debts of the business can easily wipe out your personal finances if you are not careful. The reason most people suggesting you incorporate is doing so protects you from such debts. If a lawsuit is filed, the corporation is the defendant. If a judgment is returned, it can only be collected from the corporate assets, to wit, you do not lose your home, car and savings. While this is a fairly simple notion, it is an important one. Incorporating protects you from disaster.

Making the decision to incorporate is a smart one, but it doesnt necessarily mean you need to use a corporation. Corporations tend to be big, bulky beasts to run. Many small businesses now prefer to choose limited liability companies for their business efforts. A limited liability company, also known as an LLC, provides the lawsuit protection of a corporation, but is much easier to run from a documentation perspective. In truth, the ultimate decision often involves tax decisions, so speaking with an attorney or accountant is a smart choice before making your decision.

Are you required to use a business entity? No, but you definitely should use some type of business entity that provides protection from lawsuits.

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For most people, talking to an attorney usually means that someone is in trouble. And if youre the one whos calling an attorney, chances are the person in trouble is you or someone you know.

Attorneys are usually best-known as a last resort for helping people stay out of trouble. But attorneys also provide other value-added services to both individuals and businesses.

Maybe attorneys have gotten a bad reputation because of the way society portrays them in the media. After all, attorneys arent exactly painted in the most flattering light. Weve all read about the high-profile cases and the huge million-dollar settlements. Weve all seen the attorneys portrayed on television as being greedy, indifferent, and overly-concerned with their fees. In fact shows like Boston Legal not only entertain viewers with the antics of their behavior but win awards for doing it! And, of course, weve all heard the lawyer jokes.

But despite what youve heard or read, or what your personal feelings about attorneys might be, attorneys do provide a valuable and much-needed service in a number of different areas. In addition to their main duties of upholding the law and protecting clients rights, here are just a few other areas in which attorneys add value to businesses.

-They help resolve legal disputes -They help prevent legal problems or limit their consequences -They provide legal representation if youre arrested for a crime -They can handle the legal aspects of starting a business and forming a partnership or corporation -They can provide counsel on local, state and federal tax matters -They represent your interests in a lawsuit -They provide legal counsel when filing for bankruptcy -They can protect you against claims from customers or other businesses -They can identify business risks you may not be aware of -They can help you stay in compliance with rules and regulations in your business or industry -They can defend you in court -They can handle negotiations on your behalf -They can assist with general corporate matters -They can assist with mergers and acquisitions -They can advise on intellectual property matters such as copyrights, patents and trademarks -They can handle matters of Labor and Employment law, workplace safety issues, unions, and government compliance

Now, a lot of these areas of law may not seem very exciting or glamorous. And chances are most wouldnt make very riveting prime time viewing. But if youre the one who has the problem, its nice to know that theres a knowledgeable expert available who can help you solve it, and theyre just a phone call away.

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Securing outside counsel is crucial to any business regardless of the industry or size. However, more than 60% of legal departments within businesses gave serious thought to firing outside legal support in 2001. The number one reason for this consideration was a problem with communication and response. Then when you consider the expense associated with outside counsel, along with a large movement of lawyers, the numbers of unhappy clients in the past five years have increased.

One of the most important factors when hiring outside counsel is to do your homework, know the law firm, as well as what they represent. After all, establishing a secure relationship is a win-win situation for both parties. To ensure you work with the right outside counsel, you will need to measure services offered with price, communication, responsiveness, professionalism, and areas of expertise. Today, we see many large (and small) corporations consolidating services with outside law firms as a means of tightening up operations, and with great success.

Okay, so what is the key to success when looking for and securing outside counsel? The formula is not difficult but it is precise. For starters, look for a law firm that wants and values your input. The foundation of a strong relationship is two-way communication. The firm should actively keep you abreast of changes, and concerns. However, communication is not simply conveying information but also listiening. In other words, if outside counsel does not take the time to listen to the client, to hear and understand potential risks and goals, then the relationship will never work.

Law firms should take the time to learn about your companys technologies and capabilities. For example, every company has different needs. Whether legal support and advice, technology, or software choices, a law firm needs to take the time to understand the client, their business, the competitive threats and the opportunities. In this way, outside counsel would not only have a comprehensive understanding of your business but also your specific requirements to run that business. Outside counsel should also be fully vested in your financial interests. Their work plan should include ways to cut costs for your company while adding to or maximizing profitability. A good law firm committed to serving your needs, can add value to your operations by identifying ways that you could better utilize your internal systems, as well as their services.

Good legal counsel can also aid you in growing your business. They would teach you about implementing systems, marketing, and using tactics for surviving against your competitors while also providing support in legal matters. Keep in mind that even if you were to find a law firm you liked, as a best practice meet with three, four, or five outside firms to make sure you choose wisely. A good law firm will show you ways of thinking outside the box, and using innovation to drive business results.

Taking time to understand and clearly articulate your needs will facilitate your evaluation of options for outside counsel. You will develop a very specific set of criteria which you can use to objectively measure potential law firms. Doing so will ensure that not only have you chose a firm that is competent but one that partner with you in your business to achieve your specific goals. Being able to clearly communicate with your law firm will not only enable you to effectively evaluate them but will also set the tone for what will hopefully be a long term, mutually beneficial partnership.

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Contracts are the foundation of all business transactions, the agreements that bind people to their word. So, what constitutes a violation of a contract?

When is a Contract Violated?

A contract is simply an agreement between two or more parties to do something. A simple example might be a situation where I agree to sell you a car. In such an agreement, I am binding myself to deliver the vehicle to you. In turn, you are agreeing to deliver money or some other agreed thing to me in exchange for my act. Ah, but what if things dont work out?

A violated contract occurs where one or more parties do not live up to the terms of a contract. Using our example above, I would be in violation of the contract if I did not actually sign over title to the car or give you the keys. You, in turn, would be in violation of contract if you did not give me the money or wrote a bad check. Either of these failures would be enforceable in a court of law.

Importantly, not all violation of contract situations carry the same wait. To give grounds to a lawsuit, the violation must be material. What does this mean? Well, it depends on the law of your state. In general, a material violation is a significant failure to meet the contractual terms. For instance, if I forget to sign something on the title transfer for the car in our example above, but then do so when you raise the issue, I am not in material violation of the contract. You were not really harmed in any significant way.

As you might imagine, businesses spend a lot of time in court arguing about these situations. What is material and what is not is often determined by the situation. Assume I order 1,000 toys from you for delivery on November 25, the day after Thanksgiving. Something comes up and you cannot deliver them till the following Monday. Is this small delay a violation of the terms of contract? On one hand, it is only a few days. On the other, those days occur right in the middle of the biggest shopping period for toys each year. There is no absolute answer to the question, but a court is probably going to be receptive to my claim against you.

What is a violation of the terms of a contract? Typically, it is something more than just a minor failure or delay in meeting a contractual obligation.

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No one can deny that there are more than enough lawyers in the world choking our nation’s economic engine and industrial capacity. The efficiencies of all sectors of our financial markets are burdened from a nation which is over lawyered, where lawsuits are more common that rat births. Each year thousands of lawyers are accepted into the bar and released into the wild to do their damages on our economic vitality.

But I have some good news and it does not involve saving a bunch of money on my car insurance by switching to Gieko. In fact I am grateful to alert you to the fact that lawyers are on their way out. They will soon be replaced by Holographic Images and robotic humanoids to help you with your case, which is fitting indeed, as many say that lawyers have no souls in fact there is no empirical evidence ever presented in any court of law in the 200-years of United States History showing that they are human at all?

Whether the rumors and stories about Lawyers having no soul are correct or not is immaterial because soon such Holographic Technologies will become a virtual or augmented reality and Lawyers will no longer be needed at all. Now then how do we get rid of the Politicians? Think on this.

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