Complex website design projects are like home building projects, technically and contractually.
First, a sophisticated website owner will issue Requests for Proposals (RFPs) to at least 3 qualified website developers. Do reasonable due diligence and check references. I have seen more disastrous website projects due to not knowing who you are dealing with. Meet the people who will actually work on your website, not just the sales agent or president… before you sign the contract.
The Scope of Services (which should be in your RFP) is the most important provision, because each party needs to be comfortable that every item that is supposed to be in the project is listed as well as every item that is NOT supposed to be in the project. Most disputes occur over what the scope of the project is, oftentimes at the completion of the project.
The contract needs to include the following provisions among other standard provisions:
1) Representations and warranties of the developer expressing its experience, special talents, competence, necessary licenses, authority to sign contract, etc.
2) All work product needed to manipulate the website must be delivered to the website owner at completion in the event the developer becomes not available.
3) Stage payments following review and approval of test results for each major component (see next item) prior to payments and hold regular status meetings throughout the project. Pay developer’s out-of-pocket costs only as incurred and billed by developer.
4) Test in stages:
a) Alpha = Testing occurs in developer’s office.
b) Beta = Testing occurs online from your office.
c) Test on all popular & emerging platforms, including mobile platforms now.
d) All web development services should be designated as “work for hire,” which means that all website intellectual property should be transferred in total to you.
e) You should receive a nonexclusive, worldwide, perpetual, but not sub-licensable license to use the developer’s “tools and technology” for operating the website.
f) Allow credits to developer, if requested.
g) Confidentiality provisions, including prohibitions against using or disclosing your confidential and proprietary information, need to be in the contract.
Treat your website project as if you were building your home, albeit on a smaller scale, and you won’t go wrong.
Important Proviso: The above material does not constitute legal advice and should not be relied on. It does not create an attorney-client relationship. Each locality has differing laws. A legal matter cannot be satisfactorily resolved without a comprehensive review and analysis of all the unique facts and laws at issue by an able attorney. Your matter may result in a loss of rights if you do not timely retain such an attorney.
Contact: If you would like to discuss this matter further in a more private forum, please feel free to contact me directly at the email address provided through my firm’s website located at http://www.BealBusinessLaw.com.
Wednesday, February 29, 2012
Thursday, February 2, 2012
Newly Hired Non Exempt Employee Notice Requirement
California employers are mystified by a new California law that just took effect that requires employers to provide newly hired non-exempt employees specified wage information. The California Labor Commissioner has published a notice for employers to use, and the notice purportedly contains all required information plus other information the Labor Commissioner deems “material and necessary.” This new notice is available free from the California Chamber of Commerce from:
http://www.calchamber.com/hrcalifornia/forms-tools/forms/Pages/WageandEmploymentNoticetoEmployees(LaborCodesection2810.5).aspx?CID=HRCENEWS&sp_rid=MTU2NjQ0OTcxMzUS1&sp_mid=38784408&spMailingID=38784408&spUserID=MTU2NjQ0OTcxMzUS1&spJobID=129095211&spReportId=MTI5MDk1MjExS0 does
Important Proviso: The above material does not constitute legal advice and should not be relied on. It does not create an attorney-client relationship. Each locality has differing laws. A legal matter cannot be satisfactorily resolved without a comprehensive review and analysis of all the unique facts and laws at issue by an able attorney. Your matter may result in a loss of rights if you do not timely retain such an attorney.
Contact: If you would like to discuss this matter further in a more private forum, please feel free to contact me directly at the email address provided through my firm’s website located at http://www.BealBusinessLaw.com.
Important Proviso: The above material does not constitute legal advice and should not be relied on. It does not create an attorney-client relationship. Each locality has differing laws. A legal matter cannot be satisfactorily resolved without a comprehensive review and analysis of all the unique facts and laws at issue by an able attorney. Your matter may result in a loss of rights if you do not timely retain such an attorney.
Contact: If you would like to discuss this matter further in a more private forum, please feel free to contact me directly at the email address provided through my firm’s website located at http://www.BealBusinessLaw.com.
Tuesday, January 3, 2012
Do I have to register my copyrights all over the World?
The Berne Copyright Convention and the GATT treaty allow authors in the United States to enforce their federally registered copyrights in most industrialized nations, and allow the nationals of those nations to enforce their registered copyrights in the United States. All Berne Convention nations must offer copyright protection that lasts for at least the life of the author plus 50 years. This protection is automatic without the need to take any legal steps to preserve the copyright internationally.
Important Proviso: The above material does not constitute legal advice and should not be relied on. It does not create an attorney-client relationship. Each locality has differing laws. A legal matter cannot be satisfactorily resolved without a comprehensive review and analysis of all the unique facts and laws at issue by an able attorney. Your matter may result in a loss of rights if you do not timely retain such an attorney.
Contact: If you would like to discuss this matter further in a more private forum, please feel free to contact me directly at the email address provided through my firm’s website located at http://www.BealBusinessLaw.com.
Important Proviso: The above material does not constitute legal advice and should not be relied on. It does not create an attorney-client relationship. Each locality has differing laws. A legal matter cannot be satisfactorily resolved without a comprehensive review and analysis of all the unique facts and laws at issue by an able attorney. Your matter may result in a loss of rights if you do not timely retain such an attorney.
Contact: If you would like to discuss this matter further in a more private forum, please feel free to contact me directly at the email address provided through my firm’s website located at http://www.BealBusinessLaw.com.
Tuesday, October 25, 2011
Is it wise to organize my California business in Nevada instead of California?
I get this question all the time. As a general rule, you will need to organize your corporation or other limited liability entity in all states where you are “doing business”, as defined by state law. Having said that, “doing business” can be a very grey area under state law. Also, your entity can be liable for state income or sales taxes without being organized in such state, again depending upon state law. Expert tax and legal advice is recommended in these areas.
Therefore, organizing your entity in a state other than where it is “doing business” for tax purposes may not make sense in light of the above, and this will significantly multiply your administrative effort and costs (e.g. more accounting, tax returns, annual statements, and the like).
Organizing your entity in a state other than where it is “doing business” may have sufficient advantages for larger businesses that have large revenues to balance out the additional effort and cost. Advantages of organizing in Delaware, Nevada, and now Wyoming, for example, include (1) greater protection for directors and officers versus shareholders from personal liability for acts committed on behalf of the entity, (2) more, favorable, and time-tested corporate laws, (3) higher degrees of privacy for shareholders, (4) in the case of Nevada, no sharing of information with the IRS, and (5) in the case of Delaware, high prestige, as more than 60% of the Fortune 500 companies are incorporated there.
Other than for the foregoing potential superseding reasons, it is not usually wise for smaller businesses to organize in a state, such as Nevada, unless it is otherwise “doing business” in Nevada.
Important Proviso: The above material does not constitute legal advice and should not be relied on. It does not create an attorney-client relationship. Each locality has differing laws. A legal matter cannot be satisfactorily resolved without a comprehensive review and analysis of all the unique facts and laws at issue by an able attorney. Your matter may result in a loss of rights if you do not timely retain such an attorney.
Contact: If you would like to discuss this matter further in a more private forum, please feel free to contact me directly at the email address provided through my firm’s website located at http://www.BealBusinessLaw.com.
Therefore, organizing your entity in a state other than where it is “doing business” for tax purposes may not make sense in light of the above, and this will significantly multiply your administrative effort and costs (e.g. more accounting, tax returns, annual statements, and the like).
Organizing your entity in a state other than where it is “doing business” may have sufficient advantages for larger businesses that have large revenues to balance out the additional effort and cost. Advantages of organizing in Delaware, Nevada, and now Wyoming, for example, include (1) greater protection for directors and officers versus shareholders from personal liability for acts committed on behalf of the entity, (2) more, favorable, and time-tested corporate laws, (3) higher degrees of privacy for shareholders, (4) in the case of Nevada, no sharing of information with the IRS, and (5) in the case of Delaware, high prestige, as more than 60% of the Fortune 500 companies are incorporated there.
Other than for the foregoing potential superseding reasons, it is not usually wise for smaller businesses to organize in a state, such as Nevada, unless it is otherwise “doing business” in Nevada.
Important Proviso: The above material does not constitute legal advice and should not be relied on. It does not create an attorney-client relationship. Each locality has differing laws. A legal matter cannot be satisfactorily resolved without a comprehensive review and analysis of all the unique facts and laws at issue by an able attorney. Your matter may result in a loss of rights if you do not timely retain such an attorney.
Contact: If you would like to discuss this matter further in a more private forum, please feel free to contact me directly at the email address provided through my firm’s website located at http://www.BealBusinessLaw.com.
Tuesday, October 11, 2011
Bankrupt Customers, Trustee Preference Claims, Return of Customer’s Payments…Oh My!
Times are tough, and customers are going into bankruptcy. You should know that the Bankruptcy Code gives a debtor in bankruptcy the right to avoid and recover certain payments (called "preferences") made during the 90 day period before the bankruptcy filing. Thus, your customers, actually their priority creditors through the trustee, may be able to recover all payments they have made to your business within the 90 day preference period, subject to certain defenses, the main one of which is that payments made to you were made in the “ordinary course of business” between you and your customer.
If you have had a longstanding customer relationship, and such relationship did not significantly change as your customer approached bankruptcy, then you are probably in a good position to use the “ordinary course of business” defense against the bankruptcy trustee’s preference claim. If you have not had a longstanding relationship with a customer or you make material changes to your credit practices during the 90 day preference period, maintaining such an “ordinary course of business defense” is problematical. For example, you may uncharacteristically start enforcing or changing credit terms, or withhold shipment pending payment with your soon to be bankruptcy debtor. If you have an important customer facing financial difficulties, you might consult with a seasoned bankruptcy lawyer before increasing pressure for payment.
Should you take your customer’s payment even though you suspect there may be a bankruptcy trustee claim to demand return of this payment coming? You should definitely take the payment. Best case: The trustee does not pursue the preference action, based upon various defenses or otherwise, and you keep the entire payment. Worst case: you or your bankruptcy attorney negotiates a lower settlement amount with the trustee based upon various defenses, such as the “ordinary course of business” one discussed above.
Important Proviso: The above material does not constitute legal advice and should not be relied on. It does not create an attorney-client relationship. Each locality has differing laws. A legal matter cannot be satisfactorily resolved without a comprehensive review and analysis of all the unique facts and laws at issue by an able attorney. Your matter may result in a loss of rights if you do not timely retain such an attorney.
Contact: If you would like to discuss this matter further in a more private forum, please feel free to contact me directly at the email address provided through my firm’s website located at http://www.BealBusinessLaw.com.
If you have had a longstanding customer relationship, and such relationship did not significantly change as your customer approached bankruptcy, then you are probably in a good position to use the “ordinary course of business” defense against the bankruptcy trustee’s preference claim. If you have not had a longstanding relationship with a customer or you make material changes to your credit practices during the 90 day preference period, maintaining such an “ordinary course of business defense” is problematical. For example, you may uncharacteristically start enforcing or changing credit terms, or withhold shipment pending payment with your soon to be bankruptcy debtor. If you have an important customer facing financial difficulties, you might consult with a seasoned bankruptcy lawyer before increasing pressure for payment.
Should you take your customer’s payment even though you suspect there may be a bankruptcy trustee claim to demand return of this payment coming? You should definitely take the payment. Best case: The trustee does not pursue the preference action, based upon various defenses or otherwise, and you keep the entire payment. Worst case: you or your bankruptcy attorney negotiates a lower settlement amount with the trustee based upon various defenses, such as the “ordinary course of business” one discussed above.
Important Proviso: The above material does not constitute legal advice and should not be relied on. It does not create an attorney-client relationship. Each locality has differing laws. A legal matter cannot be satisfactorily resolved without a comprehensive review and analysis of all the unique facts and laws at issue by an able attorney. Your matter may result in a loss of rights if you do not timely retain such an attorney.
Contact: If you would like to discuss this matter further in a more private forum, please feel free to contact me directly at the email address provided through my firm’s website located at http://www.BealBusinessLaw.com.
Tuesday, May 24, 2011
Commercial Lessors: Stop and Think before serving that 3-day “Pay or Quit” Notice
When a commercial lessee becomes unacceptably delinquent, lessors or their counsel most often choose to issue “pay or quit” notices and sue for possession, if the lessee does not voluntarily vacate. Because an unlawful detainer is an expedited procedure designed to quickly obtain possession of the premises, the lessor may recover only delinquent rent and the reasonable rental value for the period after termination of the lease and prior to judgment.
There are circumstances where it is better not to terminate the lease, not to accept lessee’s vacating the premises, but sue for rent as it becomes due. Such circumstances include tenants or guarantors that are financially strong or an economic recession when replacement lessees are difficult to obtain. Be aware, however, that a lessee cannot use this remedy without complying with California Civil Code Section 1951.4, which requires that if a lessee desires to disclaim its duty to mitigate its losses, then the lessor must provide, not only in the lease, but in practice, the lessee with the reasonable ability to sublease and assign. The lessor must be reasonable in any financial or other requirements related to subleasing or assignment and cannot take actions inconsistent with holding the lease open, such as serving “pay or quit” notices, declaring or accepting abandonment, changing locks, etc.
Upon execution of the above remedy, the lessor should send a letter to the lessee clearly setting forth the lessor's intention to legally collect rent from the lessee as it becomes due month after month. This should provide powerful incentive to the lessee to either find an equal or better lessee for the premises or make a settlement offer to the lessor to obtain a written release of lessee’s liability for the entire remaining lease term. An additional financial bonus results for the lessor, if the lessor settles with the current lessee for an extended period of rent, and then promptly finds another lessee to lease the premises.
Important Proviso: The above material does not constitute legal advice and should not be relied on. It does not create an attorney-client relationship. Each locality has differing laws. A legal matter cannot be satisfactorily resolved without a comprehensive review and analysis of all the unique facts and laws at issue by an able attorney. Your matter may result in a loss of rights if you do not timely retain such an attorney.
Contact: If you would like to discuss this matter further in a more private forum, please feel free to contact me directly at the email address provided through my firm’s website located at http://www.BealBusinessLaw.com.
There are circumstances where it is better not to terminate the lease, not to accept lessee’s vacating the premises, but sue for rent as it becomes due. Such circumstances include tenants or guarantors that are financially strong or an economic recession when replacement lessees are difficult to obtain. Be aware, however, that a lessee cannot use this remedy without complying with California Civil Code Section 1951.4, which requires that if a lessee desires to disclaim its duty to mitigate its losses, then the lessor must provide, not only in the lease, but in practice, the lessee with the reasonable ability to sublease and assign. The lessor must be reasonable in any financial or other requirements related to subleasing or assignment and cannot take actions inconsistent with holding the lease open, such as serving “pay or quit” notices, declaring or accepting abandonment, changing locks, etc.
Upon execution of the above remedy, the lessor should send a letter to the lessee clearly setting forth the lessor's intention to legally collect rent from the lessee as it becomes due month after month. This should provide powerful incentive to the lessee to either find an equal or better lessee for the premises or make a settlement offer to the lessor to obtain a written release of lessee’s liability for the entire remaining lease term. An additional financial bonus results for the lessor, if the lessor settles with the current lessee for an extended period of rent, and then promptly finds another lessee to lease the premises.
Important Proviso: The above material does not constitute legal advice and should not be relied on. It does not create an attorney-client relationship. Each locality has differing laws. A legal matter cannot be satisfactorily resolved without a comprehensive review and analysis of all the unique facts and laws at issue by an able attorney. Your matter may result in a loss of rights if you do not timely retain such an attorney.
Contact: If you would like to discuss this matter further in a more private forum, please feel free to contact me directly at the email address provided through my firm’s website located at http://www.BealBusinessLaw.com.
Thursday, April 7, 2011
Employers: Be aware of your legal obligations regarding pay statements
The California Labor Code requires employers to provide a statement in writing each pay period that includes nine types of information. These types are:
(1) gross wages earned,
(2) total hours worked by the employee, except for any employee whose compensation is solely based on a salary and who is exempt from payment of overtime,
(3) the number of piece-rate units earned and any applicable piece rate if the employee is paid on a piece-rate basis,
(4) all deductions, provided that all deductions made on written orders of the employee may be aggregated and shown as one item,
(5) net wages earned,
(6)the inclusive dates of the period for which the employee is paid,
(7) the name of the employee and the last four digits of his or her social security number or an employee identification number other than a social security number may be shown on the itemized statement,
(8) the name and address of the legal entity that is the employer, and
(9) all applicable hourly rates in effect during the pay period and the corresponding number of hours worked at each hourly rate by the employee.
Failure to do so will expose employers to potential damages and penalties based upon each infraction from either the employees involved or the Labor Commissioner or both.
Important Proviso: The above material does not constitute legal advice and should not be relied on. It does not create an attorney-client relationship. Each locality has differing laws. A legal matter cannot be satisfactorily resolved without a comprehensive review and analysis of all the unique facts and laws at issue by an able attorney. Your matter may result in a loss of rights if you do not timely retain such an attorney.
Contact: If you would like to discuss this matter further in a more private forum, please feel free to contact me directly at the email address provided through my firm’s website located at http://www.BealBusinessLaw.com.
(1) gross wages earned,
(2) total hours worked by the employee, except for any employee whose compensation is solely based on a salary and who is exempt from payment of overtime,
(3) the number of piece-rate units earned and any applicable piece rate if the employee is paid on a piece-rate basis,
(4) all deductions, provided that all deductions made on written orders of the employee may be aggregated and shown as one item,
(5) net wages earned,
(6)the inclusive dates of the period for which the employee is paid,
(7) the name of the employee and the last four digits of his or her social security number or an employee identification number other than a social security number may be shown on the itemized statement,
(8) the name and address of the legal entity that is the employer, and
(9) all applicable hourly rates in effect during the pay period and the corresponding number of hours worked at each hourly rate by the employee.
Failure to do so will expose employers to potential damages and penalties based upon each infraction from either the employees involved or the Labor Commissioner or both.
Important Proviso: The above material does not constitute legal advice and should not be relied on. It does not create an attorney-client relationship. Each locality has differing laws. A legal matter cannot be satisfactorily resolved without a comprehensive review and analysis of all the unique facts and laws at issue by an able attorney. Your matter may result in a loss of rights if you do not timely retain such an attorney.
Contact: If you would like to discuss this matter further in a more private forum, please feel free to contact me directly at the email address provided through my firm’s website located at http://www.BealBusinessLaw.com.
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