Do I Have a Valid and Binding Contract?

          Is the agreement I just entered into a legally binding contract? In general, a valid contract requires four elements: offer, acceptance, consideration, and performance. The process begins when one party offers the terms for the contract. Next, the other party can accept, reject, or request to modify the contract. At this step there is often back and forth, with negotiation on the terms of the contract. If the parties agree to the terms, then consideration or something of legal value must be offered and accepted. This could be and is often money or services. If the above are met, the next step is performance. In order for the contract to be completed, there must be performance according to the terms of the contract.

            But before you can have a valid contract you must also have parties who have "capacity." In Maryland, this means that the parties must have reached the "age of majority," or 18. In addition, a party must not be under a disability that would prevent them from understanding the contract. They cannot be under "duress," which means unlawful coercion or force, taking away the voluntary consent to contract. A contract with willful misrepresentations may be  fraudulent and nonbinding. Instead, the basis of a valid contract is a mutual agreement, sometimes referred to as "mutual assent," and a "meeting of the minds." Contracts, to be valid, must be entered into freely.

            There are many issues that may arise after a valid contract is entered into. There may be issues such as what contract terms mean, the scope of the contract, the manner of performance, the consideration and the time frame, among others. The language used in a contract is critical. People drafting or signing contracts may not realize the legal implications of terms used.

            Most contracts can be oral or written. Certain contracts, however, such as those under the Uniform Commercial Code for the sale of "goods" must be written. Nevertheless, it is usually advisable to have a written contract. It is important to know that a written contract is interpreted from "the four corners," of the page, and cannot be modified or explained by "parole evidence," or outside evidence regarding what the contract really means. Consequently, it is critical that the written contract accurately says what you intend. There can be many legal issues with both the drafting and enforcement of a contract. If there is a "breach" of contract, or failure of one party to uphold the terms of the contract, legal action may be required.

            If there is a proven breach of contract, another issue is the measure of damages. This can be complicated and may require experts.

            The statute of limitations, or time in which to file suit for a breach of contract in Maryland is generally three years. However, there are some exceptions. Consult an attorney for the specific statute of limitations in any breach of contract case you face.

            Whether you are the promisor (person making the offer) or promissee (person to whom the offer is made), it is advisable to contact an attorney. Often doing so at the negotiation stage can save a lot of headaches and ensure that the contract says and does what you intend.

           

WHAT IS AN "OPERATING AGREEMENT" AND WHY DOES MY LLC NEED ONE?

             Say you've decided to form a limited liability company, commonly referred to as an "LLC." You've heard that an LLC needs an "operating agreement" in Maryland but you don't know what that means or how to proceed. This article will guide you.

            The first thing is to be sure that you have the correct legal entity for your business (see prior blog link on choosing a proper legal entity. You may want to consult a lawyer to discuss the pros and cons of each. If you do decide that an LLC is the correct entity for you, you first need to register the entity with the Maryland State Department of Assessments and Taxation (SDAT). A good link on creating an LLC can be found at http://www.dat.state.md.us/sdatweb/artorgan.pdf.

            Maryland law does not require that an LLC have a written operating agreement. However, it is advisable to put your agreement with your fellow LLC members in writing. The agreement itself is not filed anywhere. Nevertheless, it is a binding contract with legal ramifications. 

            The operating agreement, while not filed with the state, should be kept with the LLC's permanent documents. The operating agreement is an important binding agreement that outlines the roles and responsibilities of the member(s). It should set forth the framework of how the LLC will be funded, run, organized, and managed. It should include specific and detailed information regarding, for example, the name of the LLC, the registered agent, the address, the date of formation, the terms under which the LLC will operate, the purpose of the LLC, the names of the member(s), and procedures relating to meetings. It should specify who will fund the LLC and make financial decisions for the LLC. It should specify the percentage of member(s) ownership, voting rights and responsibilities, and sharing of profit and losses of the LLC. It may include provisions on how to modify or amend the agreement or make changes to the LLC or deal with dissolution of the LLC. The Maryland statute on operating agreements can be found in the Corporations and Associations Annotated Code, Section 4A-402, and linked here for your convenience: http://www.lexisnexis.com/hottopics/mdcode/.

            Sometimes people ask if an LLC has shares of stock like a corporation. It does not. The members own "LLC interests" or "membership interests." The interests that each member has is set forth in the operating agreement and may also be documented in a certificate of ownership or interest. Even if LLC interests are not documented in a certificate, like a stock share, it is very important to documents when interests are transferred, bought or sold.

            The whole purpose of an operating agreement is to provide a well thought out structure of the LLC in advance of starting it. Much of the work in creating a strong operating agreement is a clear vision for your business and a well thought out way to execute it.

            A well thought out and planned operating agreement can get an LLC off to a strong start, with a clear purpose and a way to achieve it clearly spelled out. This can avoid costly litigation and ill will among members should there be a dispute on how the LLC is run. Planning ahead is both wise and cost effective.

            If you search online you can find a number of sites with "free" or "for a small fee" websites that will provide forms for your operating agreement. Be careful. While these can be a good starting point, if you haven't fully thought out all the angles of setting up and running your LLC, these may not be advisable for you. An experienced business attorney can make sure you have considered all the issues important to your specific LLC and mission, and prepare an operating agreement that covers what you need.

SHOULD I HAVE A LAWYER REVIEW MY COMMERCIAL LEASE AGREEMENT?

            You're an owner leasing commercial rental property or a tenant wishing to lease. You've

agreed on the important lease terms such as square footage, rent, and term. So why should you

spend the time and money to involve a lawyer you ask? On both sides, it's advisable.

            Leases are contracts and commercial leases are usually contracts involving a lot of money

over a long term. Therefore, you want to be sure that the written lease agreement actually

reflects what you agreed upon. The precise wording in these contracts is critical and has

legal ramifications. Lay people may not be aware what the terms mean legally. It's important

before you sign any lease agreement to understand what you are signing, what rights you are

getting and what rights you are giving up.

            You also need to know what liability you may face. In addition, you need to protect

yourself in case problems arise. Many questions can arise after a lease agreement is signed.

These are as varied as the individual deal itself. For example, if something major like the heat or

air conditioning breaks, is the landlord or the tenant responsible for the cost of repair? Another

example could be who is responsible to clean snow from the sidewalks, landlord or tenant?

Other issues may include use of the property, term, rent (there are different types of commercial

rentals, and ways to calculate the rent), subletting, renewal, default, warranties, insolvency,

signage, parking, covenants, restrictions, maintenance and repairs, build outs and property

changes, lease modifications, zoning, insurance and utilities, taxes and assessments, rights with

respect to other tenants, and  other issues particular to your lease. You can see that the list of

issues is long.

            When you've gone through all of the stress of getting to the point where you sign the

lease, you may be just ready to sign the lease. But don't, without carefully reviewing the lease

and your understanding of it with a business attorney. This extra step can make for a sound

deal that meets your needs. A knowledgeable attorney can advise you before you sign if the

lease has potential problems. If so, addressing them in advance is often much easier and cost effective.

Why Every Designer Needs a Lawyer

Why Every Designer Needs a Lawyer

If you’re a designer, you’ve undoubtedly pushed out many of your personal creative projects online. In all likelihood, you’ve spent a lot of your time and hard work to create designs that affect others in a profound manner. All you ask for is recognition and credit for your creative expression — yet what happens if somebody claims your work as their own?

This is, by and large, a huge fear for many designers. Whether you’re a graphic designer, a web developer or a UI/UX artist, it can be a flagrant offense when others steal your intellectual property. What you should know: you can legally protect your creative property. By partnering with the right lawyer, you can grant yourself peace of mind.

All designers are defined by the content they produce and when something as subjective as ‘creativity’ comes into play, it can become a breeding ground of legal issues. Take a look at Apple and Samsung’s patent lawsuit: after Apple had initially won the lawsuit in 2014, its victory was overturned on Samsung’s appeal.

Designers need their own contracts and their rights protected above all. Here’s how a lawyer can help you with all of that:

A lawyer can draft a contract tailored to your needs

Prior to entering any agreement between yourself and a client, a lawyer would urge you to prepare a contract. This contract exists as a formal legal document that both you (the designer) and your client are blinded to. The client must understand that before they acquire your services and commission you, the contract is there to protect your rights. Especially when time is of the essence, a lawyer will help you draft a contract based on the context of your needs and requirements even under the pressure of time constraints.

A lawyer saves you time and reduces your risks

In most — if not, all — contracts, a proper contract will have the designer’s terms and conditions included in it. This is to create transparency and clarity between both parties. Your terms of services are another layer of protection for your and your creative property. Undoubtedly, you’ve come across other businesses’ or designers’ individual terms and conditions and they’re seemingly filled with legal jargon. You might be tempted to find a terms and conditions template and substitute your name in, but it may not give you the customization and proper protection you need. Instead of putting yourself through the risk and hassle, a lawyer grants you the security that your terms and conditions are done the right way.

Lawyers help designers understand their rights

It’s important to distinguish the difference between selling your work and selling your rights. While both reward you with your livelihood, only one protects your copyright. In the harsh reality of the world, companies can and will discretely add clauses to contracts that abolish your rights to your work. Without any experience, a designer can negligently gloss over the fact. A lawyer can help you identify these clauses, and can then proceed to either have the clause removed or, in the very least, have its scope mitigated. As a designer, it’s important you protect your brand as much as your intellectual property.

Hiring a lawyer is the smartest investment you’ll make. Not only will you grant yourself peace of mind, but you’ll free up your time from handling the legalities of your profession. You’ll have more time to focus your energy towards your passion, rather than redirecting it towards the constant worrying of protecting your intellectual property.

Written by Daza Design

Daza Design is an online design agency that provides website, logo, and print design services. Their top-notch services have helped clients in a wide range of industries. They love all things design. It’s what they do from pixels to print.

You can reach Daza Design at:

Tel: (213) 674-0048

Email: team@dazadesign.com