Atlanta Business Lawyer Blog

As an Atlanta property lawyer that regularly handles proceedings dealing with Georgia business, real estate, construction, property, and contract matters, it is imperative that I know when a Georgia contract must be in writing to be legally enforceable. Being an attorney who does not cut corners and can be stubborn about achieving perfection, my quick answer is that every contract must be in writing. However, this is not true. Many contracts are not in writing. This is especially true for Georgia contract disputes and litigation, which in one way or another; end up on my desk to correct. In short, failure to memorialize your contractual agreement causes a plethora of problems, so please put everything in writing.

This is even true if you write your contractual agreement on a napkin from the restaurant, while having lunch with the contracting parties, with the waiter’s pen. The written contract should be a detailed written agreement that is signed, witnessed, and understood by all parties of the contract. Do not sign a contract you do not understand. This is because your signature on a contract affirms that you read, understood the contract fully, and agreed to it. The contract must contain and cover all material terms of the subject matter contract.

Now, the truth be known, the above-referenced scenario, while not a bad idea, is really me making a vain attempt to prevent future problems that could arise stem from uncertainties that often arise from oral contracts, and which are oftentimes prevented by written contract – even if it is on a restaurant napkin. Now it is time for the truth. I must admit I am purposefully wrong to prove a point. Georgia law holds that only certain Georgia contracts must be in writing. I still want to get one last word in that a contract on a restaurant napkin is abundantly better than an oral agreement.

In my Atlanta based property and Georgia real estate transaction and property dispute and litigation law firm, I know that contracts must legally only be in writing when they are subject to the Statute of Frauds. O.C.G.A. § 13-5-31 states that the following contracts do not have to be in writing to be legally enforceable. In short, they are not subject to the Statute of Frauds, which requires them to be in writing.

Conversely, it follows that contracts must be in writing when they are subject to the Statute of Frauds. In my Atlanta property dispute and litigation law firm, I know the exceptions to the Statute of Frauds. To be clear, contracts that must be in writing must meet the requirement that they be in writing because the Statute of Frauds dictates so.

Under O.C.G.A. § 13-5-31, the following types of cases are do not have to be in writing and thus one could say, they are not subject to the Statute of Frauds to be enforceable.

They are as follows:

• There has been performance concerning the contract terms by a party to the contract, and another party to the contract has accepted this performance. This indicates there is a contract, thus Georgia law states there is.

• Where there has been such part performance of the contract as would render it a fraud of the party refusing to comply if the court did not compel a performance.

• The contract has been fully performed. Since the contract has begun and finished, there is no reason to back up in time and require this contractual agreement be in writing.

As such, any oral contract is valid and legal enforceable so long as it complies with one of the above exceptions to the Statute of Frauds.

The binding authority that set forth and solidified the Statute of Frauds can be found in the case of Atlantis Realty Co., Inc. v. Morris, 142 Ga. App. 470, 236 S.E.2d 163, (Ga. Ct. App. 1977).

The lesson of this Blog Article? While it is possibly not evident, is that parties should always take the time to make a contract. Even more so, that certain contracts need not be in writing to be legally enforceable. However, if you are party to a contract, please take the time to put it in writing. If you feel a contract is pending, please take the necessary steps to have this contract put in writing. Truth be known, putting the contract in writing is only half the battle. If you are engaging in business with another party, please retain an experienced Atlanta, Georgia contract attorney to draft your contracts and make them binding on all parties. Additionally, by having your attorney draft the contracts, you can make sure your best interest are protected and promoted. I stated earlier that much litigation is generated from disputes over oral contracts. Well, there is a whole other sector that deals with Georgia contract disputes over poorly, ambiguously, or improperly drafted Georgia contracts. While a contract is just an agreement, in this business environment, a “handshake will not do anymore.” It is sad, but true.

Continue reading " REAL ESTATE – PROPERTY ATTORNEYS IN ATLANTA, GEORGIA, LET YOU KNOW WHICH CONTRACTS MUST BE IN WRITING – DO NOT REGRET FAILING TO RETAIN AN EXPERIENCED REAL ESTATE – PROPERTY LAWYER " »

As an Atlanta, Georgia Corporate Attorney, advising CEOs, CFOs, Secretary, Directors, Officers, Shareholders, it is critical you avoid mingling your personal affairs with any business matters, and vice versa. Many new business owners seek to protect themselves from personal liability by setting up corporations, the most popular being Limited Liability Company (or LLC). Regardless, a corporation can only protect you from personal liability stemming from your corporations liability, to the extent, you take care to separate your role in the corporation from your role as an individual.

Generally, the fist step in protecting yourself from debts and liabilities incurred by your corporation is incorporating your corporation (or business). In Georgia, filing the appropriate documents with the Georgia Secretary of State and creating a Limited Liability Company (or LLC) or a Corporation, can provide protection from personal liability. However, taking this action will not give you absolute protection from liability. Additional steps in your behavior, statements, and actions are critical in protecting yourself from being personally liable for debts of the corporation. When you are held liable for debts of the corporation because the company and your personal affairs are to tightly interwoven, is called Piercing the Corporate Veil.

Piercing the Corporate Veil occurs when opposing counsel (or another party) can show that the CEOs, CFOs, Secretary, Directors, Officers, Shareholders, etc. are mingling corporate their affairs with their individual affairs. Doing this is a huge mistake and you should avoid it at all cost no matter what inconvenience it may cause you or what your personal view of the Georgia law on Piercing the Corporate Veil encompasses.

Under what circumstances can I be personally liable for debts of the LLC, or corporation? And, why should I take additional steps for protection?

As a Corporate Lawyer in Atlanta, Georgia, I know from seeing Piercing the Corporate Veil legal proceedings first-hand that taking additional precautions can prevent creditors from going after your personal assets – such as your money or your home – in the event your business incurs debts that it is unable to pay. These debts can include car loans, bank loans, lease obligations, and money owed to lawyers, accountants, etc., for services rendered to the business.

These extra precautions can also prevent plaintiffs from collecting money from your personal accounts and assets to satisfy a judgment against you. A Georgia business could incur this type of liability in a variety of ways, including:

• A personal injury or accident in your office––coffee burn, slip and fall, etc.

• A product or service that injures a client, either physically or financially

• A car accident that occurs when an employee is making a delivery or driving to meet a client in the scope of work.

• Mismanagement of a client’s money

So what are some extra precautions you must take take?

• Georgia law requires corporate entities to file for renewal every year. This is a quick, relatively low-cost ($50.00 annual fee) process that keeps your corporation or LLC active. If you do not renew your business, the Georgia Secretary of State will administratively dissolve your corporation and, therefore, your protection from personal liability.

• Keep your corporate and personal bank accounts separate. Do not use your business account to pay for personal expenses – taking your family out to dinner with business funds, buying presents for your in-laws with corporate monies, paying for a weekend getaway “on the corporations’ tab”, etc.

• Do not personally guarantee any loans or financial arrangements for the corporation if you can avoid doing so. Acting as a personal guarantor opens the door to personal liability, as creditors can look to you to pay the business’s debts.

• Make sure that all of your contracts entered into using your corporate position and then your name in this capacity (i.e. as President, etc.) Do not use your individual name, even if you are the sole shareholder. For Example:

___________________________
Signed, Larry J. Doe, President
ABC Enterprises of Atlanta, LLC

• Maintain the proper insurance for your business and make sure that the corporation’s name is listed as the “name insured” on the insurance policy. Your Atlanta, Georgia, Corporate Insurance Attorney should be able to help you with this process. Additionally, keep written records of discussions and of how the insurance agents, lawyers, CPAs, advised you to ensure your business is safe or you want to compare it to another opinion at a different time. A personal umbrella policy might also provide additional personal protection for business owners.

Continue reading " ATLANTA, GEORGIA, CORPORATE BUSINESS ATTORNEY GIVES ADVICE TO ENSURE YOU AVOID PERSONAL LIABILITY OF YOUR GEORGIA LIMITED LIABILITY CORPORATION (“LLC”) OR CORPORATION " »

In my Atlanta, Georgia Civil Arbitration Law Firm, I have worked with clients who have taken their business disputes to the court system for resolution and others who have gone through the process of arbitration. Many times, a business contract specifically states that all disputes must be resolved through arbitration, yet unless contractually mandated, arbitration is often overlooked. It is important to note that while both methods have their advantages; arbitration is often the fastest and can be very cost effective.

In Georgia, it can take a minimum of a year for a case to go to trial, while the date of the final arbitration hearing can be set much sooner. Disputes are often resolved just a few months after the arbitration process is initiated. The disadvantage to arbitration is that the parties named in the dispute will pay for the time of an arbitrator. Arbitrators belong to arbitration associations that are usually private businesses, and fees for an arbitrator can cost several hundred dollars per hour. The court system, on the other hand, is funded by tax revenue and requires that the parties pay only filing fees and some other expenses and costs.

Besides the timing advantage, another strong point to arbitration is that the parties can choose the arbitrator that will preside over the case. Arbitrators have been trained in specific technical areas of the law and can be picked with this in mind. Judges in court proceedings cannot be picked and, although they have a broad knowledge of the law, the judge assigned to a case may not possess proficiency in the area that the dispute covers. In complex Georgia Business Disputes, having the option to choose a knowledgeable arbitrator will ensure that all parties are treated fairly under Georgia law.

When involved in business disputes resolved in the court system or through arbitration, it is advisable to retain an Atlanta, Georgia Arbitration Attorney. The lawyers at The Adams Law Offices have practice experience in all areas of Business Arbitration, Construction Arbitration, Contract Arbitration, and numerous other areas of law in which arbitration is an appropriate potential resolution.

The Georgia Arbitration Attorneys at The Adams Law Offices are well versed in the Georgia Arbitration Process despite the various rules and regulations set forth by different arbitration companies. Arbitration is a somewhat new alternative to litigation. While arbitration has been around for centuries, its modern day application is rapidly increasing.

At The Adams Law Offices, our Atlanta, Georgia Arbitration Lawyers know how to use the arbitration process to your advantage. The rules in an arbitration proceeding are usually more casual and the arbitrator or arbitration panel is usually more knowledgeable about the subject matter of the arbitration. The Adams Law Offices Atlanta, Georgia Arbitration lawyers keep abreast of the arbitration trends in various areas of law as well as the tendencies of local and regional arbitration panels. Protecting and promoting the best interests of you, your families, and your business, are at the heart of our goals. We invite you to let us educate you about the Georgia Arbitration Process. It can be effective, less costly, and in many cases such as Georgia New Construction Arbitration Cases, binding with no right to appeal.

Continue reading " ATLANTA ARBITRATION ATTORNEYS SAY GEORGIA ARBITRATION PROCESS MORE EFFECTIVE THAN COURT TRIALS – AND OFTEN OVERLOOKED AS RESOLUTION " »

As an Atlanta, small business lawyer, I deal with non-competition (non-compete) and Non-Solicitation laws on a regular basis. The Atlanta Small Business Lawyers at The Adams Law Offices specialize in Georgia Contract Law for small to medium sized businesses. The Adams Law Offices is a well-known and well-respected Atlanta Small Business Law Firm. Our Firm represents a numerous small and medium sized businesses in an abundance of capacities. In this Blog, I analyze the “Georgia Restrictive Covenants Act”, which I believe will significantly change relationships between employers and employee in small and medium sized businesses. I believe this will be especially true in small to medium sized businesses and businesses that employ in specialty areas.

THE “GEORGIA RESTRICTIVE COVENANTS ACT” – THE “BLUE PENCIL” COMES OUT

I write this Blog as an Atlanta, Georgia, Small Business Attorney, to let you know a most recent change in Georgia Contract Law, which is bound to have a profound affect on Atlanta Small Business Employer – Employee relations. Georgia voters have favored a constitutional amendment on November 2nd, 2010, which speculated on stringent trade laws; thereby setting constraints on trade and its laws for workers in Georgia. The newly enabled law allows Georgia Courts to repair Restrictive (Non-Compete) Covenants in Georgia Contracts, which bind the employee. In the past, any illegality in the Georgia Restrictive Non-Compete Covenants would have caused the whole contract to fail.

To put it plainly, a fatally drafted Georgia Non-Compete clause or Non-Solicitation Clause drafted by an employer will be given effect as if it were drafted within the limits of the law. Thus, it alters already existing law, which previously rendered the entire restrictive covenant ineffective. This means if any of the restrictive covenants in the contract were unenforceable, whether because of geographical restrictions, scope of work restrictions, or time constraints, the whole contract will be held void ab initio. Now, the Judge can write in the restrictive covenants so that they are enforceable. This action is referred to as “blue penciling” and is tantamount to the judge correcting the contract so that the restrictive covenants are enforceable.

The new law is viewed as dubious, given the incongruity/discrepancy in the date of it being effective. While those who drafted the Georgia House Bill 173 declared that it would be enforced from November 3rd, 2010, the Georgia Constitution asserts that new laws should come into effect from the beginning of the coming year, January 1st. How this drafting error will affect anyone legally is uncertain and chances are that it may have to do the rounds of the courts to determine how it will be applied.

In its most practical aspect, what concerns those employees who intend to start a new business venture, is that; (a) An employment contract implemented before November 3rd, 2010, consisting of a restrictive covenant (a Georgia Non-Compete or Non-Solicitation Clause) will not be qualified for the new law; and, (b) Conversely, any employment contract implemented after November 3rd, 2010, with restrictive covenants; in particular, the restrictive covenants referred to as Non-Compete or Non-Solicitation Clauses, will fall under the new law. However, given the discrepancy in the dates, employment contracts may not be carry the power of this law as the date of commencement, or the new law may be held unconstitutional. This grey area in Georgia Contract Law may be of great concern to those workers aspiring to compete with their previous employers. This is particularly true in a densely populated competitive area such as Atlanta.

Continue reading " ATLANTA SMALL BUSINESS ATTORNEY – (NON-COMPETE, NON-SOLICIT CLAUSES) AND THE “BLUE PENCIL” – FALLOUT FROM THE “GEORGIA RESTRICTIVE COVENANTS ACT” " »

As an Atlanta Partnership Dispute Attorney, I realize that a partnership is created anytime two or more people go into business together. Our Top Atlanta Business Partnership Lawyers typically refer to “partnerships” as specific legal entities called general partnerships or limited partnerships. However, for simplicity in this discussion we will refer to any group of people who are in business whether shareholders in a closely held corporation or members of an LLC as “partners.”

REDUCE YOUR PARTNERSHIP TO WRITING!

My first and foremost advice as an Atlanta Business Partnership Lawyer, is to reduce your Georgia Partnership Relationship to writing. The worst thing partners can do is establish a business or enter into some form of joint venture without a clear agreement. This agreement should be reduced to writing to avoid any ambiguities or misunderstandings about these responsibilities. With or without a written partnership agreement, disputes will occur. If the dispute cannot be resolved between the partners, each partner needs effective legal representation. Atlanta, Georgia, Litigation or Negotiation, Mediation or Arbitration (Collectively referred to as Alternative Dispute Resolution - ADR) may become necessary. While Georgia Partnership Litigation is never a pleasant option, the consequences of not enforcing your rights may be far worse. AThe Adams Law Offices Atlanta-Based Business Attorneys are exceptional ADR masters and may possibly carry the day and protect your best interests without see in the inside of a courtroom

QUESTIONS YOU SHOULD ASK YOURSELF

Are you the minority shareholder in a closely held corporation? Are you being prevented from viewing the company’s financial documents, which precludes you from knowing whether you are receiving your proper share of business profits? Is the majority shareholder paying himself an exorbitant salary (or flying on a private jet)? Not taking action to protect your legal rights and interests can cost you lots of money over the years.

MORE QUESTIONS YOU SHOULD ASK YOURSELF

Are you the majority shareholder? Have you exercised your fiduciary duties to your partners in responsible and reasonable manner? Can you avoid a lawsuit from your partners for breach of your fiduciary duty?

TAKE ACTION IMMEDIATELY!

Other Atlanta, Georgia Partnership Disputes may arise when one partner takes an opportunity for herself, which, should have been presented to the business, over competing business by one partner or over business funding. Whether you are an individual, family, business, or other type of clientele, please take the opportunity to let us assist you. Without action, your problems will almost surely get worse and you will find yourself in at the point of no return.

Should you ever find yourself in a position where you or your partners have a dispute, you should immediately seek legal advice to protect your interests. We will work to resolve disputes informally and inexpensively, but when litigation or ADR is necessary, The Adams Law Offices will be glad to be your zealous advocate for your position to obtain you the best possible result. An initial consultation on these matters is available without cost or obligation. The Adams Law Offices Attorneys are Smart, Resourceful, and Aggressive and may be your saving action. However, you need to act by Contacting Us immediately.

Continue reading " TOP ATLANTA, GEORGIA PARTNERSHIP ATTORNEY TELLS OF THE IMPORTANCE OF WRITTEN AGREEMENTS AND QUICK ACTION IN CASE OF BUSINESS PARTNERSHIP TROUBLE " »

As an ATL business lawyer, handling numerous Non-Competition (non-compete) and Non-Solicitation laws on a regular basis. The Atlanta Small Business Lawyers at The Adams Law Offices specialize in Georgia Contract Law for small to medium sized businesses. The Adams Law Offices is a well-known and well-respected Atlanta Small Business Law Firm. Our Firm represents a numerous small and medium sized businesses in an abundance of capacities. In this Blog, I analyze the “Georgia Restrictive Covenants Act”, which I believe will significantly change relationships between employers and employee in small and medium sized businesses. I believe this will be especially true in small to medium sized businesses and businesses that employ in specialty areas.

THE “GEORGIA RESTRICTIVE COVENANTS ACT” – THE “BLUE PENCIL” COMES OUT

I write this Blog as an Atlanta, Georgia, Small Business Attorney, to let you know a most recent change in Georgia Contract Law, which is bound to have a profound affect on Atlanta Small Business Employer – Employee relations. Georgia voters have favored a constitutional amendment on November 2nd, 2010, which speculated on stringent trade laws; thereby setting constraints on trade and its laws for workers in Georgia. The newly enabled law allows Georgia Courts to repair Restrictive (Non-Compete) Covenants in Georgia Contracts, which bind the employee. In the past, any illegality in the Georgia Restrictive Non-Compete Covenants would have caused the whole contract to fail.

To put it plainly, a fatally drafted Georgia Non-Compete clause or Non-Solicitation Clause drafted by an employer will be given effect as if it were drafted within the limits of the law. Thus, it alters already existing law, which previously rendered the entire restrictive covenant ineffective. This means if any of the restrictive covenants in the contract were unenforceable, whether because of geographical restrictions, scope of work restrictions, or time constraints, the whole contract will be held void ab initio. Now, the Judge can write in the restrictive covenants so that they are enforceable. This action is referred to as “blue penciling” and is tantamount to the judge correcting the contract so that the restrictive covenants are enforceable.

The new law is viewed as dubious, given the incongruity/discrepancy in the date of it being effective. While those who drafted the Georgia House Bill 173 declared that it would be enforced from November 3rd, 2010, the Georgia Constitution asserts that new laws should come into effect from the beginning of the coming year, January 1st. How this drafting error will affect anyone legally is uncertain and chances are that it may have to do the rounds of the courts to determine how it will be applied.

In its most practical aspect, what concerns those employees who intend to start a new business venture, is that; (a) An employment contract implemented before November 3rd, 2010, consisting of a restrictive covenant (a Georgia Non-Compete or Non-Solicitation Clause) will not be qualified for the new law; and, (b) Conversely, any employment contract implemented after November 3rd, 2010, with restrictive covenants; in particular, the restrictive covenants referred to as Non-Compete or Non-Solicitation Clauses, will fall under the new law. However, given the discrepancy in the dates, employment contracts may not be carry the power of this law as the date of commencement, or the new law may be held unconstitutional. This grey area in Georgia Contract Law may be of great concern to those workers aspiring to compete with their previous employers. This is particularly true in a densely populated competitive area such as Atlanta.

Continue reading " ATL BUSINESS LAWYERS FOR SMALL ATLANTA BUSINESSES – (NON-COMPETE, NON-SOLICIT CLAUSES) AND THE “BLUE PENCIL” – FALLOUT FROM THE “GEORGIA RESTRICTIVE COVENANTS ACT” " »