Effects of Breach in Partnership Agreements

I happen to read, by chance, the suit filed by Amazon against Expedia for a Partnership Breach. Despite such breach, Amazon continued to renew its ties Expedia. Ir is interesting to know how breach occurs and what happen when it does occurs.

Well, suits like that often happen between partners or between a partner and the partnership for breach in their partnership agreements. This is because of the principle of “delictus personarum” or the mutual trust and confidence expected from and among the partners themselves which entitles the partners to choose who should be the other partners in their business. If one of the partners has failed to fulfill with his or her obligations to the partnership, a breach exists which gives the injured party a cause of action against the erring partner.

Another peculiar characteristic of a partnership that separates it from a corporation is that each partner acts as the agent of the other partners and of the partnership. As such, if there is any violation or failure of one partner to do what is expected of him to do under the partnership agreement, he will be held liable not only to the other partners or to the partnership itself but also to other persons who dealt with the partnership as well.

Breach of partnership is in effect breach of the mutual trust and confidence reposed upon a partner. In case of betrayal by the other partner, the other party has the option to either continue with the partnership or expel the erring partner.

Truckers have Higher Duty of Care

Truck accident must be one of the most severe mishaps on the road. It in fact accounts for the most serious fatalities. Imagine a large freight carrier slamming on your car? Or a ten-wheeler truck hitting you while crossing the street? How about a heavy hauler crashing onto you while driving on a motorcycle?

Vehicle accidents record the most number of personal injuries and wrongful deaths on the streets of Los Angeles. This I believe is due to a great number of reckless and irresponsible drivers on the road. Every driver, especially those whose vehicles are so large that they pose a threat to every motorist, should know that they owe a duty of care to other people.

A blog article entitled “Truckers Must Exercise Extreme Caution, Not Just Reasonable Care” mentioned that drivers of commercial trucks owe a higher duty of care than other drivers. It indicates that some tort attorneys or trial judge make the mistake of using lesser standard in the process of a truck accident claim.

This should not be overseen by an attorney. Using a lesser standard of duty of care will lessen the liability of the negligent truck driver. A truck accident attorney must be able to identify up to what extent did the driver failed to comply with the safety statute on driving a large vehicle. This would permit additional damages or the award of recovery to the plaintiff/s.

Safety statutes require truck drivers to drive within a certain length of time since many accidents are often the result of driver fatigue. They are also required to ensure the safety or security of the truck load before hitting the road. Regular maintenance and inspection are set as well for truck drivers to follow.

Any failure to act on or abide by these safety statutes would add up to the liability of the truck driver and/or truck company. If their failure resulted to an accident which caused injuries or death to other parties, they shall be required by law to afford due compensation to the victims.

Besides the compensatory damages which include general and special damages, that can be possibly given to a plaintiff, punitive damages can also be awarded to him/her.

Labor Law Violation on Age Discrimination

One of the most unaccepted labor law violations is age discrimination. It is unlawful under the Federal Age Discrimination in Employment Act (ADEA), and the California Fair Employment and Housing Act (FEHA) to discriminate an employee on the basis of age.

The state law of California makes it illegal for employers to terminate any individual who is at least 40 years of age for the reason of his/her age. One example of this is the case of Brian Reid who is suing Google, Inc. on the grounds of age discrimination. You can read more about this on a blog article entitled “California Supreme Court Agrees to Review Age Discrimination Case”.

There are three types of age-related discrimination that may be alleged:

1. Discrimination by Disparate Treatment
2. Discrimination by Disparate Impact
3. Age-based Harassment

In the case of Reid, he asserted causes of action for unfair business practices under California’s Unfair Competition Law (UCL), disparate treatment under FEHA, wrongful termination, failure to prevent discrimination and emotional distress.

According to him, he had been called “fuzzy,” “sluggish,” and “lethargic” at work, and that he had been told his ideas were "obsolete" and "too old to matter." These accusations were found by the appellate court to be true and hence, gave Reid the permission to pursue his claims.

His allegations can indeed be considered as harassment since age-related discrimination include age-based jokes or comments, offensive gestures, labeling or name-calling, and other verbal or non-verbal conduct that is insulting to an individual 40 years old and above.

In such cases where employees are harassed through unwelcome or offensive conduct based on his/her age which creates a hostile work environment, a complaint for age discrimination may be filed to the appropriate courts.

Any employers who commit a labor law violation of this kind will be subject under the law to compensate their aggrieved employee. The unreasonable and unlawful conducts of employers towards their elderly employees should be given due consequence.

Workers who believe that they have been discriminated against on the basis of their age may try to settle the issue with his/her employer. In case they weren’t able to come to a settlement, they have the right to file charges.

Issuing Discipline Letters before Dismissals

Before arriving at the final decision and the offering of severance package agreement, one important step in the termination process is the issuance of corrective actions or discipline letters to an erring worker.

Discipline letters must precede termination of an employee and all the information contained in the letter must also become part of the documents in a severance package negotiations.

Reading the article, “You Also Must Document All the Corrective Actions (Discipline Letter)”, posted March 10, 2008, provides one with hints on what a discipline letter is all about.

According to the article, a discipline letter must document all the corrective actions an employer did to improve job productivity. Issuing discipline letters to erring employees help to foster respect among the workforce.

Discipline letters may be issued under the following circumstances:

• Dismal work performance
• gross misconduct
• repeated misbehavior
• excessive absenteeism and tardiness

A discipline letter will almost always provide hints on how a worker performs or how he repeatedly violates certain office policies despite several attempts to curb his bad behavior.

The letter will also act as a record of his transgression and could provide substantial information when an employer finally writes a dismissal notice to an employee.

In writing a dismissal notice, all these information must be taken into account. A dismissal letter must be written professionally and accurately.

In a discipline letter, an employer must write what he expects of the employee and what he must do to correct his mistakes or violations. If, despite all this, an employee fails to correct himself and continues with his bad behavior, then a dismissal notice may be issued.

After a dismissal notice has been given and the severance package comes under discussion, presenting all the information in the discipline letter can help an employer in the negotiations for the severance package agreement.

In all aspects, I agree with this process in as much as I believe that an employee who commits mistakes must always be given a second chance to set things straight.

But if all remedies fail, then it is within the prerogative of an employer to do the necessary thing based on the company’s labor policy and within the parameters of the law.

Online Corporate Establishment: Its Implications

With the advanced technology that we have today, everything seems to be at our fingertips. We can just dial the phone for our pizza delivery, email a friend from the other side of the world, click on the mouse for our online needs, etc.

But how about forming a corporation online, can it be possibly done?

Corporation establishment simply refers to the creation of a new corporation in the manner set by the applicable laws in the state where such corporation is to be established. It may also either refer to the original creation of a new corporation or the reincorporation of one that has already existed, but whose personality ceased to carry on because it was terminated voluntary or involuntary.

The following are helpful tips of creating your own corporation?

• Establish legal structure
• Create an accounting system
• Register the business name
• Set up sound business processes

The normal course of incorporation entails a lot of paper works. It takes a lot of good faith to create one. But due to the advent of technology, even incorporation can be made possible through a click of the mouse. And you can start your business right away.

This is how online incorporation works:

• Five minutes to complete the process
• Prepare the necessary documents, submit to the state and monitor the filing
• Send state copies and complete order

It is of my humble opinion that despite the fast-paced world and the advanced technology, sometimes the traditional way of doing things is still the best and effective way. It is but a common knowledge that not every thing can be better accomplished or transacted through the net. There are times when personal interaction with the other person is advised.

This is because in your personal dealings with the other, you can test their sincerity and good faith which cannot be possibly determine in the web. Although, the law does not require that it be done personally by the incorporators.

Furthermore, establishing a corporation entails a lot of paperwork and good faith on the part of the applicant. In applying online, you cannot witness the immediate reaction of the other party. It is as if you are dealing with a mediator. And how can you be sure that you will not encounter any problems in the future?

Dispute mechanisms

In the corporate context, shareholders disputes are integral issues that are common and widespread.

Shareholders disputes may arise in the form of boardroom conflicts, corporate governance-related disputes, breach of fiduciary duties, internal shareholder’s agreement, voting rights or dividend payment disputes, stock ownership disputes and stock transfer disputes.

From the foregoing corporate disputes, the corporate governance conflicts are the most popular. Governance issues can be a fertile source for disputes and conflicts.

Corporate governance conflicts are often unavoidable. It is beyond cavil that corporate disputes would arise on this particular aspect alone.

Customarily, corporate affairs are handled by the board of directors who are shareholders themselves. The board is accountable to the corporation as the principal. All their actuations and corporate decisions must have a direct bearing to the legitimate expectations of the corporate shareholders.

Shareholder’s dispute can be resolved through various mechanisms, short of litigation.

Adequate mechanism may be formulated to address shareholder’s dispute. Mechanism such as mediation, negotiation and arbitration may be formulated as a management tool to strive conflict resolution.

Dispute Mechanism

Mediation deals more on constructive approach that brings to surface the issues of mutual concern. It enables parties to commence into a negotiation.

Negotiation is a voluntary and informal process in which parties identify issues of concerns, explore options for resolution and search for mutually acceptable agreement. In this wise, lawyer representation is permissive.

Arbitration is a private process where disputants agree that their disputes be heard by an appointed individual or body after considerations of evidences and arguments.

However, despite having those alternative mechanisms, it is an inevitable fact, that shareholder’s dispute would more likely end up in litigation.

Litigation would have a final say in resolving the clash of shareholder’s interest, in almost all situations. Litigation in court is the optimum recourse of shareholder’s (specially the minority) in resolving shareholder’s disputes and conflicts.

Through litigation, the conflicts can be well-settled and attain legal ease.

In litigation of this sort, an experienced corporate lawyer may be the right person to deal with.

Whatever avenue were chosen, when a dispute arises, consideration for the best interest of the corporation is primordial. Disputes must be resolved effectively, expeditiously and efficiently.

Taking into account the underlying principle of corporate dealings, which is, “time is of the essence”.

Why Time is Gold

Many of us commit mistakes every now and then. When we were young we were forgiven for our little mistakes, but as we get older, our infractions were given penalties or punishment.

I just come across an article,”A Litigator’s Nightmare: Late Filing Costs… 1 Million”, posted January 8, 2008, which is about a news article that came out of the Washington Street Journal. The incident happened in California wherein a client was fined $1 million for missing the deadline for filing a motion by 1 minute.

According to the article, the reason for the delay in the filing of the legal motion was the heavy traffic encountered by the messenger who was supposed to deliver the needed documents for submission to the court. Unfortunately, however, the intended documents missed the deadline and were filed the following office day instead. The judge did not consider the excuse as reasonable and gave the corresponding penalty.

The article underscores the need for people to pay great attention to time constraints, especially in vital concerns like meeting deadlines and submitting requirements. This may also serve as a reminder for people to value time as a precious commodity.

Relatively, this may also remind us of the great importance of the statute of limitation in filing cases, specifically personal injury cases. In California law, the clock starts ticking not from the time that one files a case but from the “accrual of the knowledge of an injury”. This means that if you get involved in an accident, the statutory time begins as soon as your doctor informed you of the injuries. And as always necessary, you will need the services of a competent lawyer who will file the claim for your injuries.

This also applies to the filing of social security benefit claims, which have their deadlines to meet. For example, when a claim is denied in the initial stage, a claimant has only sixty days with which to file for reconsideration.

This brings us to the point that a lawyer’s services are essential in these instances. One cannot discount the benefits of having a lawyer who will attend to one’s legal needs. Besides, seeing to it that all deadlines will be met, a lawyer can best represent your interest in a legal proceeding, especially if you are in disposed or injured in an accident.

Fictitious Business Name: A Deceitful Implication?

A fictitious business name otherwise known as “assumed name” or DBA short for “doing business as” is a name used other than the legal or registered name of the company as long as it is not used for fraudulent purposes.

Using a fictitious name allows one to legally do business at a minimal cost and without having to establish an entirely new business entity. Through it, one can transact business, accept payments or advertise.

In sole proprietorship, an assumed name allows the proprietor to use a business name rather than the personal name. It permits the use of a typical business name without creating a formal legal entity thus making it the least expensive way of doing business. It also allows single legal entities to operate multiple businesses without creating a new legal entity for each business. By doing this, business costs and expenses are minimized while still letting you to expand.

My only concern now is how to determine if the entity under an assume name is created not by fraudulent means. Because it may happen that someone could just establish a fictitious business to defraud people or as a conduit of another company to evade legal claims against said company.

Of course, this will be difficult to determine because of the presumption of good faith in the establishment or incorporation of a business. In other words, a business entity’s wicked intentions can only be determined when fraud is actually committed or someone reports on its fraudulent intentions.

My only advice is to observe extra precautions in your every business dealings. Don’t invest your money or part from it without knowing everything. Remember, you can never be deceived without your permission.

Business partnership favored over Business Corporation

When beginning a business, a decision has to be made as to what form of business unit to establish.

The usual forms of business entity are the following:

• the sole proprietorship,
• Business partnership;
• Corporation,

• Limited Liability Company (LLC).

Choosing the right business entity relatively depends on the resources, the line of endeavor, economic factor or finances and tax considerations.

When you have a considerable amount of finances, a choice of having a business partnership is more likely recommended than a corporation.

From among the various forms of business organization, partnership is said to be a highly adaptable form.

The advantages of a business partnership are the following:

• Each partner shares directly in the business's profits and shares control in the operation of the business;
• As to liability, partners are jointly and independently liable for the partnership's debts;

· The partner’s relationship may be formed informally;

· The federal law plays a minimal role in partnership law except in the diversity action, or in instances where a partnership agreement contains an effective choice-of-law provision designating the application of federal law;

· For state and federal tax purposes, a partnership is not a taxable entity. Partnership income is taxable to the partners in proportion to their share in the company's profits.

In contrast, formation of a corporate entity involves a complex process.

In the process of incorporation, you would mind the varying state or federal law requirements.

Aside from the state requirements, incorporation of a corporation is a formal act and needs the vesting of the state.

The sharing of profits as well as the distribution of liabilities is pretty much tricky in a corporate entity.

Viewing the foregoing, to my mind, it is beyond cavil that a business partnership is more likely favored than a corporation.

This assessment however, is necessary limited and focused more on the practical applicability of the form of business organization that most people can afford to venture.

This is of course not discounting the great avenue of a business corporation.

For practicality and viability considerations, business partnership is more favored than a corporate entity.

Issues on COBRA and Dependent Eligibility Audits

According to California law, employees are entitled to certain benefits which employers normally provide to their workers. To ensure that these benefits will be rightfully awarded to employees at the same time protect their rights, the state employee benefits law was created.

Included among these benefits is the health care coverage for workers and their dependents, which is specifically provided under the state’s Consolidated Omnibus Budget Reconciliation Act of 1985 () (COBRA).

But reading the article, ”Employers Are Taking Steps to Reduce Costs Associated with Employee Benefits”, posted on November 29, 2007, contradicts nearly everything the law says. This article is about the practice of some employers who terminate medical coverage for worker’s dependents unless they can show proof of qualification to the benefit.

According to the article, many employers have started conducting so-called ‘dependent eligibility audits’, wherein employees are required to produce proof that their spouses and children qualify for medical benefits. If they fail, coverage for the worker’s dependents is terminated.

While the cost of providing this benefit may have increased in recent years, it is not reasonable enough to deprive workers of this vital benefit. The intention behind establishing this ‘audits’ may be good, as it had found out that 15 percent of those claimed as dependents are not actually entitled to coverage. But on the whole, more workers need the benefits than those few who try to cheat the system.

But under COBRA, these employers must “provide an employee and the employee's spouse or dependents (if covered) with notice of the right to continue coverage if the employee's job is terminated, the marriage is terminated, or a dependent child ceases to be a dependent under the terms of the plan.”

Clearly, the COBRA provision said, “The covered individual can elect to continue, for a limited period, the coverage that he or she had before the termination. The employer can require that the covered individual pay up to 102 percent of the cost of coverage.”

In addition to this, state statutes and regulations mandate California employers who offer group health insurance, health maintenance coverage, or group life insurance to comply with these laws. And usually the employer's plans are covered by both California laws and ERISA which may overlap, and even contradict each other. In many cases the federal law preempts state regulation.

The California laws regulating group health plans are similar to ERISA in a way that both establish minimum standards for coverage, limitations on cancellation and conversion, and procedures to follow upon termination of employment

In the face of all this confusion, will a final decision on the matter be forthcoming?