That area is dispute resolution.

It is not a glamorous topic. However, for small and mid-sized businesses, a poorly handled dispute can cause serious damage. In fact, it can hurt your business more than a bad quarter, a difficult client, or a failed product launch.

In our experience advising small businesses across Los Angeles and beyond, most disputes do not appear out of nowhere. They are predictable. They follow recognizable patterns. And in most cases, they were entirely preventable.

The good news is that you do not need to wait for a legal threat before protecting your business. In fact, learning how disputes start and what they cost is one of the best investments a business owner can make. Knowing how to resolve them efficiently matters just as much. This guide covers all of it.

Where Disputes Actually Come From

Most small business owners picture a dispute as a dramatic confrontation: an angry client threatening to sue, a former partner demanding money, or a vendor refusing to deliver. In reality, most disputes begin far more quietly.

They start with a handshake. Or an assumption. Or a contract that someone copied from a free template without ever actually reading it.

The Three Most Common Origins

After working with hundreds of small businesses, we see the same root causes appear again and again. Recognizing them early is the first step toward avoiding them entirely.

The first is the handshake deal. A business owner lands a new client through a mutual connection. Everyone seems aligned. Work begins. Then, six weeks in, the client insists the deliverables were supposed to include something that nobody discussed. The business owner disagrees. Without a written agreement, no authoritative record of the original terms exists. Both sides dig in. Consequently, what started as a promising relationship turns into a billing dispute that takes months to unwind.

The second is the template contract problem. Many small businesses do use written contracts. Unfortunately, those contracts often come from a generic online source and never get customized. Template contracts frequently omit critical clauses specific to your industry, payment structure, or operating model. They may reference laws from a different state. Moreover, they may not include any dispute resolution provision at all. Consequently, when something goes wrong, the contract that was supposed to protect you ends up being largely useless.

The third is the assumption gap. Two parties enter a business relationship with different understandings of scope, timeline, payment terms, or responsibilities. Neither one thinks to ask clarifying questions because everything seems obvious. Naturally, the project includes revisions. Surely, payment is due within 30 days. Of course, the contractor handles sourcing materials. Until none of that is obvious, and the relationship breaks down over a misunderstanding that a single paragraph could have prevented.

By the time legal action seems necessary, the financial cost, emotional toll, and damage to the relationship have already compounded significantly. In other words, the cost of not addressing things early is almost always far greater than the cost of doing so. A dispute that one clear conversation could have resolved six months earlier now requires lawyers, documentation, and months of back-and-forth. This is why prevention matters so much. Accordingly, understanding your options before a dispute arises puts you in a far stronger position. Indeed, that preparation consistently makes the difference between a manageable situation and a costly one.

The Real Cost of Waiting

Here is a number every small business owner should know: 43 percent of small businesses that go to court over a commercial dispute end up paying more in legal fees than the actual value of the dispute itself.

Read that again. Nearly half of small businesses that litigate a commercial dispute lose more in legal costs than they ever stood to recover.

Why Litigation Is Almost Never the Right First Move

This outcome happens because litigation is expensive, slow, and deeply unpredictable. In California, a straightforward commercial dispute can take 12 to 18 months to resolve in court. Attorney fees can run from $15,000 to $100,000 or more, depending on complexity. Furthermore, at the end of that process, no outcome is guaranteed.

For a small business owner, that timeline and those costs are not just inconvenient. They are potentially catastrophic. While managing a lawsuit, you lose focus on running your business. Key relationships get strained or severed entirely. Additionally, your reputation in your industry may take a hit. And if the dispute involves a core client or supplier, your revenue suffers throughout the entire process.

Consider a Los Angeles-based marketing agency that entered a billing dispute with a former client over a $35,000 project. The client refused to pay the final invoice, claiming the work fell short. The agency pursued litigation. Eighteen months later, they won a judgment. By then, however, they had spent over $40,000 in attorney fees, lost two key employees who burned out from the stress, and earned a reputation in their niche as difficult to work with.

They won the case. Ultimately, they lost far more than they gained.

In contrast, mediation or arbitration initiated early in that same dispute could have resolved the matter in weeks. The cost would have been a fraction of the litigation fees. Furthermore, far less collateral damage to the agency’s team and relationships would have occurred.

Most disputes resolve faster, cheaper, and more constructively through alternatives to litigation. For instance, mediation brings in a neutral third party to help both sides reach a mutually acceptable resolution. Arbitration, similarly, uses a private decision-maker whose ruling carries binding weight. Both options preserve confidentiality, move more quickly than court, and give both parties significantly more control over the outcome.

Timing, however, is critical. The earlier a dispute gets addressed, the more options both sides have. The longer it sits unaddressed, the more entrenched each side becomes, and the more expensive every available path grows.

Key Steps Every Small Business Should Take Right Now

You do not need to be in the middle of a dispute to benefit from the steps below. In fact, the best time to take them is when everything is going well and you have space to think clearly.

Step One: Audit Your Contracts

Pull out the contracts you use most frequently. Start with your client services agreement, your vendor agreements, and your contractor or freelancer agreements. Read each one carefully, ideally alongside a business attorney.

As you review, ask yourself these questions. Does the scope of work have a clear, specific definition? Is there any ambiguity about what is included versus excluded? Do the payment terms spell out due dates, late fees, and consequences for non-payment? Does a termination clause explain how either party can exit the relationship and under what conditions? And critically, does the contract include a dispute resolution clause at all?

If the answer to any of these is no, or if the contract came from a generic template that nobody customized, you have a real risk sitting in your files right now. Accordingly, a business attorney can review these agreements, identify the gaps, and help you build contracts that genuinely protect you when it matters most.

Step Two: Define How Disputes Will Be Handled Before They Happen

The most powerful addition to any business contract is a well-drafted dispute resolution clause. This clause specifies exactly what happens if the parties disagree, before either side has already grown frustrated about something.

A strong clause should address several key points. First, it should state whether mediation or arbitration must happen before either party can pursue litigation. Second, it should clarify who bears the cost of those processes. Third, it should specify which state’s laws govern the agreement. Finally, it should include a timeline for initiating the process so disputes do not drag on while both sides wait for the other to act.

Having this clause in your contracts does not signal that you expect trouble. Instead, it signals that you run a professional operation that takes both your interests and your clients’ interests seriously. Most sophisticated counterparties will respect that. Many will actively prefer it.

Step Three: Act Early When Something Feels Off

This is perhaps the most important step of all, and the one most often ignored by business owners who want to avoid conflict.

When a client starts pushing back on an invoice, or when a partner seems to pull in a different direction, the instinct is often to wait and see. Similarly, when a vendor misses a deadline without explanation, many owners assume it will sort itself out. Perhaps it resolves on its own. Perhaps raising the issue creates unnecessary tension.

In practice, waiting almost always makes things worse. The earlier you bring in legal counsel when something feels off, the more leverage you have. Accordingly, the more options remain open to you as well. An attorney can help you send a carefully worded message that opens a dialogue rather than escalating tension. They can help you assess whether the situation warrants formal action or whether a structured conversation is the smarter path. They can also protect your legal rights without burning a relationship that still holds value. In short, early action is not aggressive action. It is a smart action, and it consistently produces better outcomes at lower cost than waiting.

When Winning Is Not Actually Winning

There is a deeply ingrained idea in business culture that disputes get won in courtrooms. That the person who fights hardest and longest comes out on top. That pursuing a negotiated resolution means losing.

Nevertheless, this mindset costs small businesses enormous amounts of money, time, and energy every single year.

Redefining What a Good Outcome Looks Like

Think carefully about what a truly successful resolution actually looks like. In most cases, true success is not a dramatic courtroom victory. Instead, it looks like recovering what you are owed while keeping the relationship intact, wherever possible. It also looks like reaching a clean, documented exit with a problematic partner, so both sides can move forward without ongoing entanglement. Similarly, it looks like resolving the matter quickly so you can redirect your energy back to running your business rather than fighting a legal battle.

A legal victory that takes 18 months, costs $50,000, and leaves your counterparty furious is not a win. In fact, it is a costly detour that delays growth, drains resources, and may have damaged your reputation in ways that quietly close doors for years to come.

True success in dispute resolution means clarity, control, and preservation of your business. Knowing where you stand legally and having a defined path to resolution is essential. Specifically, emerging with your finances, your reputation, and your key relationships as intact as possible represents the real objective.

This matters especially for small businesses in tight-knit industries or local markets. In Los Angeles, for example, many industries run on referral networks and personal relationships. A reputation for being litigious or difficult follows a business for years. Consequently, the way you handle a dispute sends a clear message about the kind of partner and business owner you are.

Furthermore, the financial math almost always favors early, negotiated resolution over litigation. A mediation that costs $3,000 and resolves in six weeks beats an 18-month lawsuit every time, even if the court outcome would technically have been more favorable. The lost time, lost focus, and lost opportunities during litigation rarely show up in the final judgment, but they are very real costs nonetheless.

Mediation and arbitration, handled strategically and at the right time, frequently produce outcomes that serve everyone’s long-term interests far better than litigation. Choosing these paths reflects experience and strategic thinking, not weakness. In short, the business owner who resolves a dispute quickly and cleanly is almost always better positioned six months later than the one who chose to fight it out in court.

How Carbon Law Group Approaches Dispute Resolution for Small Businesses

At Carbon Law Group, our dispute resolution practice was built specifically with small and mid-sized businesses in mind. We understand that a $50,000 dispute feels just as high-stakes as a $5 million one. Indeed, when it represents months of work or a significant portion of annual revenue, the financial size matters less than the business impact.

What Working with Our Team Looks Like

Every engagement begins with a free 20-minute call to assess the situation. No legal jargon, no pressure, no obligation. Specifically, the conversation focuses on what is happening, what options exist, and what the realistic outcomes of each path might look like for your specific situation.

From there, we provide clear guidance across every available option. In one situation, a demand letter might make the most sense as a first move. In another, mediation fits better. Occasionally, the best path is a structured conversation that our attorneys facilitate directly. In other cases, the priority is simply tightening up your contracts and processes so the same issue cannot arise again. Regardless of the path, we lay out each option clearly, including cost, timeline, and realistic outcomes, so you can make an informed decision rather than a reactive one.

When formal action is warranted, we build a strategy tailored to both your immediate interests and your longer-term business relationships. Specifically, we represent small businesses in mediation and arbitration proceedings, draft and negotiate settlement agreements, and litigate when that is genuinely the best path forward given the circumstances.

Our approach rests on a simple belief. A dispute addressed early, with good legal guidance and a clear strategy, almost always costs less and produces better outcomes than one allowed to escalate. Moreover, a business that takes its contracts and legal foundations seriously tends to have far fewer disputes in the first place. Furthermore, when one does arise, that business resolves it on its own terms rather than reacting under pressure.

Additionally, we think prevention is just as important as resolution. Many of our most valuable client engagements begin not with an active dispute but with a contract review or a conversation about how to structure a new business relationship properly. That kind of proactive work saves clients far more over time than any single dispute resolution ever could.

If you are currently facing a dispute or if you simply want your business properly protected before one arises, we would like to help.

Take the next step book your consultation today, and safeguard your brand’s future.

Connect with us: Carbon Law Group

Visit our Website: carbonlg.com

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The post Why Small Businesses Can’t Afford to Ignore Dispute Resolution appeared first on Carbon Law Group.

Common Causes of Trademark Confusion

Several factors can cause trademark confusion. Similarities in brand names, logos, or product packaging are the most common. When two brands in the same industry use similar trademarks, consumers may confuse them, leading to lost sales and reputational damage. This confusion can also lead to legal disputes, as one brand may accuse the other of infringement.

Conducting a Thorough Trademark Search

One of the best ways to prevent trademark confusion is by conducting a thorough trademark search before launching your brand. A trademark search involves checking existing trademarks to ensure that your brand’s name, logo, or slogan is unique. This search can reveal potential conflicts with other brands and help you avoid costly disputes.

Securing a Trademark Registration

Securing a trademark registration is another crucial step in preventing trademark confusion. Registering your trademark with the U.S. Patent and Trademark Office (USPTO) gives you exclusive rights to use it in connection with your goods or services. This registration also provides legal protection, allowing you to take action against others who use a similar trademark. Without registration, your brand may be vulnerable to infringement, and you may face challenges in enforcing your rights.

Monitoring Your Trademark

Even after securing a trademark, it’s important to monitor its use to prevent trademark confusion. Regularly checking for new trademarks that may conflict with yours can help you catch potential issues early. If you notice a similar trademark being used by another brand, you may need to take legal action to protect your rights. This could involve sending a cease-and-desist letter or filing a lawsuit for trademark infringement.

Avoiding Descriptive or Generic Names

When choosing a trademark, avoid using descriptive or generic names. These types of names are less likely to receive trademark protection and are more prone to causing confusion. Instead, opt for a unique, distinctive name that clearly sets your brand apart from others in your industry. A distinctive trademark is easier to protect and less likely to be confused with others.

The Role of Legal Counsel in Preventing Trademark Confusion

Preventing trademark confusion can be complex, but legal counsel can help. An experienced trademark attorney can assist with conducting trademark searches, securing registrations, and monitoring your trademark. They can also provide guidance on how to respond to potential trademark disputes. By working with a legal professional, you can better protect your brand and reduce the risk of costly legal battles.

Addressing Potential Trademark Disputes

If you find yourself facing a potential trademark dispute, it’s important to address it promptly. Ignoring the issue can lead to more significant problems down the road, including lawsuits and financial penalties. Early intervention can often resolve disputes before they escalate. This might involve negotiating with the other party or making adjustments to your trademark to reduce misunderstandings.

How Carbon Law Group Can Help

Trademark confusion can be a serious threat to your brand, but you don’t have to handle it alone. The experienced attorneys at Carbon Law Group can help you prevent trademark confusion by guiding you through the trademark registration process, conducting thorough searches, and providing legal representation if disputes arise. Their expertise in trademark law ensures that your brand is protected from potential conflicts.

Conclusion

Trademark confusion can lead to costly disputes and damage your brand’s reputation. By taking proactive steps like conducting thorough trademark searches, securing registrations, and working with legal counsel, you can protect your brand and prevent misunderstandings. Don’t leave your brand’s future to chance—reach out to Carbon Law Group for expert assistance in safeguarding your trademark.

Final Thoughts

Trademark confusion is avoidable with careful planning and the right legal support. By understanding the common causes of confusion and taking steps to protect your brand, you can avoid costly disputes and maintain your brand’s integrity. Contact Carbon Law Group today to learn how they can help you prevent trademark confusion and protect your brand for the long term.

The post Trademark Confusion: How to Prevent Costly Disputes appeared first on Carbon Law Group.

The Consumers Legal Remedies Act (CLRA) is a set of California statutes that protects consumers from false advertising, fraud, and other unfair business practices. This law allows consumers to bring individual or class action lawsuits to recover damages and to stop unlawful business practices. California Civil Code 1770(a) lists almost two dozen unfair and deceptive acts of consumer fraud. The most important prohibited business practices for cosmetic and personal care are:

• Misrepresentation of a professional affiliation or endorsement.
• Misrepresenting that goods or services have characteristics, ingredients, uses, benefits, or quantities that they do not have
• Using deceptive representations or designations of geographic origin.
• Representing that goods or services are of a particular quality or grade if they are of another.
• Disparaging the goods, services, or business of another by false or misleading representation of fact.
• Advertising goods or services with the intent not to sell them as advertised.

Any consumer who has suffered damage as a result of any prohibited business practices by the CLRA can bring suit.

Remedies for violation of the CLRA can include:

• The consumer’s actual monetary damages,
• A court order enjoining (prohibiting) the unfair practices,
• Restitution of property,
• Punitive damages,
• Recovery of attorney’s fees,
• Injunctive relief, and
• Any other relief that the court deems proper.

However, it is very important for businesses to note that 30 days or more before a plaintiff may file a lawsuit under CLRA, the consumer plaintiff must notify the potential defendant and ask the business to correct, repair, replace or otherwise rectify the goods or services alleged to be in violation of the CLRA. This gives businesses 30 days to evaluate the CLRA claim and take actions to remedy the situation. 

If you ever receive a CLRA notice, you will have 30 days to remedy the situation or agree to do so (and then actually do it) within a reasonable time. If the consumer’s claim is legitimate and certain business practices of yours were in fact unfair or deceptive, you must also within a reasonable time cease to engage in the prohibited business practices. See Cal. Civ. Code 1782.

Carbon Law Group has the depth of knowledge and experience to help you navigate the complex web of California consumer protection regulations. We focus on reducing and managing your risk of litigation by advising on product labeling and negotiating with consumers that send your business a CLRA notice. To learn more, call us today, and we can begin discussing your options immediately. 

The post Tik Tok Tik Tok… Counting down 30 days to your CLRA deadline appeared first on Carbon Law Group.

Breach of Contract 

It is fairly inevitable that a breach of contract will occur, whether or not it was intentional or not. For instance, in the event of a miscommunication that resulted in 800 oranges being sent instead of 800 lb of oranges, or if produce rots while in transit, it is important that the existing contract spells out what will happen in these situations. Because it is not possible to anticipate every possible kind of issue that could arise with a contract, many contracts will stipulate that in the event of a breach of contract, the issue will be remedied through arbitration. This means that if a breach of contract occurred and if your contract stipulated arbitration, an arbitrator will review the terms of the contract, determine whether it was breached, and settle on an appropriate solution to remedy the breach. It will be relevant in these sessions what the exact terms of the contract were. Regardless of whether you go to court or to arbitration, the four corners of the agreement will dictate. This means that it is invaluable to have an experienced business and contract attorney draft and review your contracts from the start, to ensure that even if something goes wrong, you will still be in a good position. 

The essential elements of a claim of breach of contract, whether express or implied, are the contract, plaintiff’s performance or excuse for nonperformance, defendant’s breach, and the resulting damages to the plaintiff.” San Mateo Union High School Dist. v. County of San Mateo (2013) 213 CA4th 418, 439, 152 CR3d 530, 548. Remedies are awarded to a non-breaching party as compensation for losses resulting from a breach of contract. Remedies for a breach of contract are intended to protect three interests of the non-breaching party, including:

1. Expectation Interest. The interest in the prospective gain resulting from the performance of the contract (also referred to in California as compensatory damages);
2. Reliance Interest. The detriment that results from a change in position because of the contract;
3. Restitution Interest. The interest in the benefit conferred on the other party as a result of the contract.

Talk to the Business Lawyers at the Carbon Law Group

If you are ready to take your business to the next level with expert contract drafting and review, the experienced business attorneys at the Carbon Law Group are ready to help. Contact the Carbon Law Group today to schedule a consultation. 

The post How to Handle Breaches of Contract appeared first on Carbon Law Group.

If you’re a sole proprietor, the formalities for closing down a business are less stringent. It is a decision you make on your own, without the need to consult with partners or board members.

However, if your business is a partnership with a written partnership agreement, an LLC, or a corporation, you will need to follow the rules of dissolution contained in the partnership agreement, operating agreement, or articles of incorporation, and perhaps reference the state statutes if your agreements do not include terms pertaining to winding down a business. Typically, these agreements contain clauses that require a two-thirds or majority vote in order to dissolve the business.

These operating documents should be archived in the company’s records as well as filed with the state.

2. File with the State

All limited and general partnerships that filed with the state at the beginning of the partnership must file dissolution papers with the state. This places creditors on notice that the business cannot incur any further business debt.

Once you’ve voted to dissolve an LLC or corporation, you must file paperwork with the state, certifying the decision to terminate the business. This paperwork will relieve the company of future tax burdens, and give official notice that the company can no longer take on business debt.

3. Notify the IRS and State and Local Tax Agencies

When you end a business, the company is still liable for any taxes for the prior and current year. This means that you must continue making deductions from paychecks and continue payroll reporting obligations. You’ll need to file your quarterly or annual taxes, and capital gains, and liquidations forms.

You’ll also be responsible for all final tax forms that need to be filed. This includes income tax, any sales tax that has been collected, and payroll taxes.

The IRS has a comprehensive checklist for business owners who are preparing to shut down. The checklist contains forms that must be filled out or continued to be filed as the business shuts down.

Consulting an accountant, tax advisor, or attorney is advised in order to meet the particular requirements of your locality and state tax agencies.

4. Cancel Business Licenses

In addition to reporting to local, state, and federal tax agencies, you will need to file paperwork other local agencies to terminate business licenses or permits. By cancelling licenses and permits, you prevent others from using your business account or name to run a business and leave you holding the bag for taxes or penalties. Find the agency that granted any license you may have and terminate everything.

5. Notification to Creditors

Whether you’re a partnership, LLC, or corporation, businesses have an obligation to creditors to inform them of an impending closing. You’ll need to inform lenders, insurers, suppliers, vendors, and service providers that the business will no longer be contracting for their services and give a method as to how the company intends to wind up its business with those creditors.

Certain states may also require a dissolving company to place an ad in the local newspaper or other publication announcing the closing.

6. Settle Creditor Claims

Once you get claims from creditors, you’ll need to inspect the claims and either accept or reject them.

7. Collect Money Owed to the Business

The flip side of settling creditor claims is to collect any money owed to the company. It is advisable to collect any money owed several months in advance to the closing of your business, as it will be challenging to do so, once your doors are closed.

8. Inform Other Stakeholders About the Closure

You will need to let your landlord, clients employees about the close of the business. For the landlord, you will need to follow the terms outlined in the lease agreement.

In terms of informing Clients and Employees, it is a good idea to be as considerate as possible.  Providing fair warning is not only proper business etiquette, it maintains good relationships. Former clients and employees can be contacted when you open your next business, as long as you leave on good terms. Depending on your industry, clients may be required by law to be informed before your business closes.

Customers should also be told of the impending closing. Be sure to service their orders to the best of your ability. These people could be your first customers at your next business venture. Also, as noted above, try to collect money owed to you while the business is still running.

9. Sell and Distribute Your Assets

After you’ve settled the claims of your creditors, all that’s left is the business assets, The distribution of these assets remains proportional to the stake of each owner in the business.

10. Find the Right Attorney to Help You Dissolve Your Business

Finding the right attorney to help you during this stressful time can help alleviate some of the stress and trauma related to closing your business.

If you need help closing down your business, feel free to email us at contact@0517.info or set up an appointment.

The post 10 Steps to closing down a business appeared first on Carbon Law Group.

• Duty of Care. This requires that directors ensure that they have done the required homework to make wise, informed decisions for the benefit of the shareholders. In other words, directors need to make sure they are well informed and of all material information that will allow them to make smart decisions for the welfare of the company.
• Duty of Loyalty. Directors are forbidden from using their position of trust and confidence for their own private interests. This is based on the public policy interest that holds directors must not use information that they acquired in a position of authority for their own private gain, often at the expense of the company.

What is a breach of Fiduciary Duty?

A breach of fiduciary duty occurs when the fiduciary acts in the interest of themselves, rather than the best interest of the employer or principal.

A fiduciary’s actions must be free of conflicts of interest and self-dealing. As a fiduciary, you can’t use the principal for your own personal advantage. In other words, you can’t use corporate property or corporate assets for your own personal gain, nor can you take advantage of a corporate opportunity for your own personal pursuits. Depending on the actions of the fiduciary, fraud may also be an issue, but this is typically a more complex legal matter.

A breach of fiduciary duty complaint is much easier to prove than fraud as there’s no need to prove fraudulent or criminal intent. To win a breach of fiduciary duty complaint, the claimant only has to prove that you were in a fiduciary position and you breached that duty for your own personal gain.

How to Avoid a Breach of Fiduciary Duty

One way to avoid breaching your fiduciary duties is to ensure that decisions are documented every time a major decision is made by the board of directors or shareholders on the company’s behalf.

It’s also important to understand the basics of fiduciary duty so that you know what’s to be expected of you, and what actions might be in breach of your duty.

The post What is Fiduciary Duty? appeared first on Carbon Law Group.

Lack of Consideration

In legal terms, “consideration” refers to something of value given by both parties to a contract that induces them to enter into the agreement. If there has been no consideration, or bargained-for exchange, a court will deem the contract invalid and it can be terminated.

Lack of Capacity

A court will not observe the contractual obligations of an individual that lacks capacity (e.g. minor or someone deemed mentally incompetent). Although a court does not recognize minors, a contract made by an adult to a child is accepted. A person is considered mentally incompetent if he lacks the ability to understand the agreement.

Statute of Frauds

Most oral contracts are enforceable.  However, there are certain contracts that need to be in writing to be enforceable. Some examples of this include marital agreements, service agreements that cannot be performed within a year, land contracts, and contracts for goods of $500 dollars or more. Even though these contracts must be written and signed, a court can determine whether informal writings such as emails, invoices and letters meet the statute of fraud requirement.

Mutual Mistake

If both parties involved in a contract are mistaken about the same facts, the contract may be voidable.

Misrepresentation

A misrepresentation is a false statement of facts that encourages a person to sign the contract.

Breach

A breach arises when a party fails to perform any term of a contract absent a legal excuse. However, for a contract to be terminated the contract must be considered in major breach.  To determine whether a breach was major or minor, the courts will look 6 guidelines including:

1) The extent to which the breaching party has already performed,

2) Whether the breach was intentional, negligent or the result of an innocent mistake,

3) How certain it is that the breaching party will perform the rest of the contract,

4) How much of the benefit of the contract the non-breaching party has gotten despite the breach,

5) The extent to which the innocent party can be compensated and,

6) How difficult it would be on the breaching party if the court were to decide that the breach was material and that the innocent party was under no obligation to perform his side of the bargain

Discharge by Frustration

A contract may be frustrated where there exists a change in circumstances, after the contract was made, which is not the fault of either of the parties, which renders the contract either impossible to perform or deprives the contract of its commercial purpose.

Impossibility of Performance

A contract can be cancelled under what is called an “impossibility theory”. Types of impossibility theories observed by the court include acts of God, death, or legal impossibility.

Of course, it is always a good idea to have your contracts looked over by a lawyer.

Book an appointment with us to have your contracts reviewed to ensure your business is protected!

The post Top Reasons to Terminate a Contract appeared first on Carbon Law Group.

In business it is important to get all agreements in writing that clearly spells out each party’s rights and obligations upfront. This ensures there is no confusion or disagreement later on down the line.

❒ Keep it simple.

A contract does not need to be filled with legal jargon. Instead, create clear and concise sentences. Use numbers and headers to alert the reader what contents are in each section.

❒ Deal with the right person.

Make sure the person you negotiate with has the authority to bind the business and has a vested interest in making sure the business performs its obligations under the agreement.

❒ Identify each party correctly.

You need to include the correct legal names of the parties to the contract so it’s clear who is responsible for performing the obligations under the agreement.

❒ Spell out all of the details.

The body of the agreement should spell out the rights and obligations of each party in detail.

❒ Specify payment obligations.

Specify payment terms including when each payment will be due, on what terms, and what method of payment will be used.

❒ Agree on circumstances that terminate the contract.

It makes sense to set out the circumstances under which the parties can terminate the contract. For instance, if one party misses too many important deadlines, the other party should have the right to terminate the contract without being held legally responsible for breaching the contract.

❒ Agree on a way to resolve disputes.

Write into your agreement what you and the other party will do if something goes wrong. You can decide that you will handle your dispute through arbitration or mediation instead of going to court, which takes up a lot of time and money.

❒ Pick a state law to govern the contract.

If your business is located in more than one state, you will want to specify which state you will be dissolving the business, and ensure you are adhering to all of the laws that apply to that state.

❒ Have a Lawyer Assist You:

It is a good idea during to consult a lawyer when you have questions about contracts.  At Carbon Law Group we are here to assist you with any questions you may have and get your contracts on track.

The post Mastering Contracts – Checklist appeared first on Carbon Law Group.

Typically, most business people do not want to be in a situation where they feel compelled to get out of a contract before the end of the contract term. However, sometimes there are situations that force parties to an agreement to terminate a contract. If it becomes necessary to do so, the following precautions should be taken:

Review the Contract

It seems obvious, but reading and understanding the contract is a must!

Review the contract, including any amendments, letters or emails. Pay particular attention to whether the contract contains any provisions that specify whether a penalty may be assessed for a breach or early termination, and whether early termination entitles the other party to recover damages.

Take the Direct Approach

Approach the other party to the agreement to see if a settlement can be negotiated. Being up front with the other party may relieve you from liability for bad faith or malicious dealing, and it may prevent having to settle the matter through legal means.

Discuss your Dilemma with Legal Counsel

Usually the language of a contract is difficult to understand or interpret. Proper legal counsel can help ensure you take the right course of action for dealing with next steps.

The post Practical tips for avoiding breach of contracts appeared first on Carbon Law Group.