If you are a small-business owner, contacting a lawyer is often a scary proposition. It appears to be costly and only a little bit comes back in return. Legal advice and guidance in varied forms is vital to any small business. It is true that you will get a bill. However, hiring an attorney doesn’t have to break the bank.
Here are six business reasons why your company may benefit from the involvement of an attorney:

1. You’re starting a business.

Most businesses decide to start running their business before ever calling a lawyer for legal advice. Don’ make the same mistake. Before you receive a penny, contact a lawyer to review your business structure, legal ramifications and other elements designed to protect your business and help it flourish.  Remember than a lawyer isn’t someone you go to just when you have a trouble.
2. Check your contracts.

Make sure that any contracts that you have are in writing. Oral contracts often mean an unpleasant lawsuit later.  It is important for an attorney to review every contract you use in your business, both with customers as well as suppliers – or draw up suitable contracts if none are in place.

3. Check if any money is owed.

With the economy in poor shape, it has been more difficult to collect money owed to you. An attorney can help by devising a course of action to collect any funds.  In the alternative, if you any money a lawyer can often provide defenses and negotiate on your behalf.
4. Begin to draw on your wealth.

An experienced estate attorney also is essential in setting programs to fund retirement from the proceeds that come from the business. In my experience, many entrepreneurs start late and wait till their 50’s to start an estate plan. An attorney can help you start taking the wealth out of the business now to fund your retirement.

5. Plan for your retirement.

You probably want your business to continue when your retire. A business attorney can address succession.

6. Resolve a business dispute.

Just hiring an attorney will signal that you mean business. Hiring a lawyer early may help you avoid lengthy and costly court action.
Don’t fear the cost.

Legal advice costs money. But it doesn’t need to be as prohibitively expensive as you might fear. Some matters can be handled on as-needed basis and you may not need to a large retainer.

Breach of contract occurs when a binding agreement or bargained-for exchange is not honored by one or more of the parties to the contract by non-performance or interference with the other party’s performance. If the party does not fulfill his contractual promise, or has given information to the other side that he will not perform his duty as mentioned in the contract or if by his action and conduct he seems to be unable to perform the contract, that party is said to breach the contract.

An example of a breach of contract lawsuit is when a client has failed to pay as per a written agreemtn. What should you do?  First you should see whether the other side has any defenses. Should you call a lawyer and start a lawsuit?

Below, is quick guide that summarizes the basic steps, legal process and expenses of a breach of contract lawsuit.

Legal Steps:

1. Prove existence of Agreement;

2. Prove breach of Agreement (failure on one side to perform or pay);

3. Prove damages due to breach (loss of profit, damage to business).

Legal Process:

1. File Complaint with the Court;

2. Defendant answers the Complaint, and could start a counterclaim;

3. Period of Discovery which are oral and written questions from each side. Interrogatories and Bills of Particulars are written discovery. Depositions are discovery interviews.

4. Discovery conferences. For example, in New York County, you will have a preliminary conference and a series of compliance, status and settlement conferences.

5. Motions requesting certain relief. For example, a party may make a summary judgment motion if they believe that there are no issues of fact and that they are entitled to judgment as a matter of law.

6. Trial


1. Timeframe: Between 1 and 5 years.

2. Retainer: A common breach of contract retainer is between $5 and $20 thousand dollars.

3. Court costs: Between $500 and $10,0000.00.

4. If a case proceeds to trial, $20-$100,000 is not uncommon.

If you have any questions regarding a breach of contract, contact me at the Law Office of Frederic R. Abramson at 212-233-0666

While litigation may sometimes be your only recourse, many times it is a result of signing a bad contract or not fully examining the contract you have signed.  Here are ten things to know before entering into an agreement in New York that can help protect your business and your assets:

1.      Know the Other Party

Be sure that the business you are contracting with is registered to do business in the state in which you operate your business.  Should there be a problem later on, it will be much easier to institute a lawsuit as the states maintain addresses for service of process on registered corporations.  In addition, if the business is not properly registered in the state, there could be legal issues with your contract.  The business should also be licensed in the specific type of business it conducts, if this is required.

2.       Pricing Issues

If you are a buyer or a seller, know what you are paying or getting paid, when the money is due, how it is to be paid, where it is being paid to.

3.      What is the Exact Product or Service

While this may seem obvious there are thousands of lawsuits on just this issue.  Be sure you and the other party are on the same page, literally and figuratively.

4.      Delivery of the Goods or Services

Specify exact time frames for delivery of the product or service and when payment is due in relation to this time frame.

5.      Condition of the Product or Service

Are the items new or used?  If used, how much?  If new, in original packaging or repackaged?  If a service contract, specify who will be doing the service and his or her credentials?

6.      Warranties

What are the guaranties on the product or service?  What period of time do they cover?  What is the procedure for repairing or replacing an item or correcting a service mistake?

7.      Getting out of the Contract

While most contracts are made to avoid getting out of them, you can sometimes negotiate an “out” clause for poor performance or lack of proper delivery or other essential things.

8.      Renewal of the Contract

Is there an automatic renewal?  Is there any option to renew?

9.      Default

There are several ways to default on a contract. Two prevalent ways are non-payment and non-performance.  Non-payment can include not getting paid in full, on time or at all.  Non-performance can be not doing the job properly, in full, or not how you expected it to be done.  All of these can be combated with remedies in the contract.

10.  Remedies

Make sure the contract has a section dealing with remedies for defaults.  Remedies are compensation to the injured party for such defaults.  Outside of the contract there are other ways to be compensated for default in contracts, including state statutes, federal statutes like the UCC, fraud actions and illegality of the contract, dealing with minors, duress, undue influences, etc.

If you have any questions regarding contract law, contact me at the Law Office of Frederic R. Abramson at 212-233-0666

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1. If you copy a form from the Internet, you have no idea who drafted it. In all likelihood, the business owner acted as his or her own legal counsel and simply copied the terms of the contract from other forms from the Internet.

2. The legal document is out of date. Laws change constantly. Who knows when the contract was initially drafted?

3. The legal document is not relevant to your state. Every state has different laws governing contracts. Moreover, simply copying a contract from another state may require you to litigate in that state.

4. The contract is not relevant to your business. Remember, every business is different and the terms of each agreement needs to be tailored specifically for your business.

5. The legal document may be copyrighted. You may have to pay damages if you use a form without consent.

6. Poorly worded documents can create liability. For instance, certain governmental agencies, like the Federal Trade Commission, have brought actions against companies due to errors in legal documents. Are you protected legally from forms found on the Internet? Failure could cost you and your business.

23 Legal Issues for Start-ups and Businesses

by Fred Abramson on April 14, 2009 · 1 comment

Do you have that entrepreneurial drive? It takes more than a great idea to start a new business and keep it running. Unfortunately, entrepreneurs and business owners are often confused about the legal aspects involved in running a business. Below is a list of 23 legal issue’s for both start-ups and businesses that should be discussed with an attorney.

1. Select Entity type: Sole proprietorship, Partnership, S or LLC?

2. Incorporation of your business;

3. Create Articles of Incorporation;

4. Create Bylaw’s;

5. Create a Shareholder’s or Membership Agreement;

6. Create an Employment Agreement;

7. Check for Trademark issues, protect intellectual capital;

8. Create a Buy-Sell Agreement;

9. Draft an Independent Contractor Agreement;

10. Non-disclosure Agreement;

11. A Sample Convertible Note;

12. Board of Advisor Agreement;

13. Purchase/Service Agreements;

14. Term and Conditions;

15. Draft an Employee Handbook;

16. Draft a Non-Compete Agreement;

17. Check for any legal limitations or restrictions;

18. Create a Stock Option Plan and Equity Based Compensation;

19. Looking for Venture Capital, you may need a Term Sheet.

20. Create a Client Contract or Fee Agreement.

21. Technology Assignment Agreement;

22. Invention Assignment Agreement;

23. Review any Leases

Is a Handshake Agreement Enough to Protect You?

March 5, 2009

You worked out all the details, and you shook hands on the deal, but there is no written contract. Is that enough to protect you and the agreements you think you have in place? The answer is “it depends”. Many contracts do not need to be in writing. However, those that fall under the Statute […]

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Legal Reasons For Keeping Email

February 17, 2009

Your email box is probably stuffed with e-mails. We all know that the Nigerian Money Letter is spam and can be deleted (sorry). But what should you do with your business emails? My advice: keep all email correspondence for 5 years.  Here’s why:  potential litigation.  Email is powerful evidence in court. If your company is […]

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