Category Archives: Longmont Business Attorney

Contract Law

At one point or another, most of us have entered into some type of agreement with another party. If you have leased or purchased property, started a business partnership, or agreed on the price of home repairs or improvements, then chances are you have signed a contract to solidify the agreement made. These agreements, whether verbal or in writing (except for real estate, which must be in writing), are contracts and are legally binding, however verbal contracts can be more difficult to validate.

Contracts are written to express the responsibilities of each party entering into an agreement, and while this may seem somewhat basic, the way in which a contract is written can be quite complex. A poorly written contract can result in dispute and/or legal action, therefore, hiring a Contract Law attorney can make all the difference when it comes to contract formation and structure. Not only can a Contract Law attorney adequately assist in crafting a contract, they can offer advice on existing contracts and general counsel should a contract need enforcing.

For a contract to be legally effective, there are certain requirements that must be met. These requirements include:

Legal Purpose: The purpose of the contract must not violate any laws. For example, one cannot agree to steal a car in exchange for monetary gain.
Competent Parties: Each party entering into a contract must be of legal age and be of sound mind. In other words, those entering the agreement should be capable of doing so, while understanding what they are doing.
Offer and Acceptance: A contract is considered valid once an offer is made by one party and accepted by another. The offer must state what the “offeror” is committed to be bound to and agreed upon by the party accepting said offer, or the “offeree”.
Consideration: The concept of consideration is that each party of the contract agrees to provide something of value in exchange for the same. Without consideration, there is not binding contract.
Mutual Assent: Mutual assent is the agreeance of the two parties who are entering into a contract. Both parties agree to the terms set once all requirements are in place. Also referred to as the “meeting of the minds”.

Ted Bendelow of Bendelow Law Firm, LLC has over 46 years of general counsel experience to include Contract Law and Breach of Contract. He has proudly served clients in Boulder, Longmont, Denver and throughout Northern Colorado. If you need the expertise of a Contract Law attorney, call Ted Bendelow at Bendelow Law Office, LLC for a consultation.

Business Law Attorney, Colorado

Business law is an area of law that pertains to every aspect of business start-up and ownership. Business creation requires an understanding of the formation, or entity, of the company and the correct filing of the necessary documents with state and local agencies to establish the new business. Once the business is established, the functions of business law include the governance of the company regarding public interaction, tax laws, employee rights, mergers and acquisitions, and business dissolution, to name a few.

Acquiring a business attorney who understands the complexities of business law can make all the difference when it comes to starting and maintaining a business. Ted Bendelow of Bendelow Law Office LLC has practiced law for over 46 years and offers his services in Denver, Boulder, Longmont and throughout northern Colorado.

Some areas of business law that Bendelow Law Office LLC specialize include:

  • New Business Start-Up: After careful analysis and discussion, Bendelow Law Office, LLC will help you determine the best entity for your business. Once the business formation is determined, Bendelow Law Office, LLC will prepare and file the required documents to establish your new company.
  • Business Ownership: For established businesses, Bendelow Law Office, LLC will provide general counsel for various legal needs to include employee benefits and agreements, wage administration, debt collection, and business litigation, as well as other areas of legal counsel that pertain to business law.
  • Compliance Program: Bendelow Law Office LLC will continuously work with your corporation or limited liability company through their compliance program that is offered. This program is designed to assist business owners with proper documentation of the business’s innerworkings.
  • Mergers and Acquisitions: Businesses tend to change. With that said, we can assist you throughout the changes. We offer legal assistance with restructuring, growth, mergers and acquisitions of other companies, and the sale of your business. Should you choose to dissolve a business, our legal team will work with you throughout the process.

These are just a few areas of business law that Bendelow Law Office LLC practice. If you live in Colorado and seek a business attorney, Ted Bendelow of Bendelow Law Firm LLC has the knowledge and expertise in business law to offer trusted, professional legal counsel. Call the experienced team at Bendelow Law Firm LLC for a consultation today.

50-50 AGREEMENTS

When two folks decide to do business together, they commonly agree that they are 50-50 partners, whether a partnership; a corporation or an LLC. That means they both must agree on decisions. That arrangement is fine so long as they agree on everything. It is a recipe for disaster if they don’t.

A 50-50 partnership requires 100% agreement. If partners don’t agree, the business is paralyzed and commonly the relationship is destroyed. The parties are left with some third party – a judge, an arbiter, effectively running the business, because the decision authority now rests with that third party, a party who can easily and unintentionally make bad decisions which can damage, if not destroy the business.

There are two solutions to this dilemma. First, give one-person decision-making authority. That is easily done by allocating ownership at lease 51-49. The hardest part of this approach is getting one of the people to accept the minority role.

A second approach is to provide a mediation/arbitration provision that either party can invoke. It does involve a third party, but the mediator has no authority and simply tries to get the parties to agree. The arbitrator is different, as he/she decides and their decision is generally final. The benefit of the mediation/arbitration approach is the parties get to select the Mediator/Arbitrator. There are procedures set out in the American Arbitration Association (AAA) rules for mediation and arbitration that are commonly followed.

One of the benefits of the mediation/arbitration process is that it has a great tendency to force the parties to reach agreements amongst themselves. The parties don’t want to effectively turn their business over to a stranger, who knows nothing about it.

A third option, we call the “nuclear option” is a “put or call” agreement, whereby one party offers to buy out the other party or sell to the other party, for a fixed priced. The other party must buy or sell for the fixed price.

So, the lesson from this: don’t enter a 50-50 agreement or create a structure to resolve disputes. Otherwise, you have turned your company over to some unknown party.

Starting a New Business

Starting a new business is actually quite simple: get an employer identification number (EIN) from the Internal Revenue Service. In some industries you also need to get a business license, for example for sales tax purposes. Some businesses have further licensure obligation(s), with some licensure state required (realtor) and some locally required (Contractor).

You don’t need to form a corporation or do anything else. You are in business!

Is this a wise approach: no. There are several other steps a prudent business follows:

  1. Get a bookkeeper or accountant to set up a chart of accounts;
  2. Determine the business form you want to be: a sole proprietor; a partnership; a C Corporation; an S Corporation; an LLC; or some combination.
  3. Prepare the necessary paperwork to create the entity. This will involve addressing a variety of issues depending on the type of business (e.g. Manufacturing vs. retail), the market (local, national, international); the number of owners (one, many); the capital requirements and contributions; buy-sell restrictions, etc.
  4. Determine the name of your business. This has two reasons: (a) branding, your image is reflected by the name your use. It is generally the name forever so a lot of thought should go into the decision; (b) availability, folks commonly come up with a great name, only to find someone is already using it. There are several ways to determine availability. The first is the Colorado Secretary of State website. Search for the name you want and see if it is available. As a side note, the Secretary of State has a lot of useful information. A national search is also available for out of state use.

There is a very common misconception by owners: if they form a corporation or LLC, their personal assets will be protected in the event the entity and they are sued.

That position is only partially correct. In a breach of contract matter, the entity generally does protect the individual. However, that is NOT true in the case of tort (e.g. Personal injury). The owner can be personally liable if it is shown he/she was negligent.

So, if you are considering forming a business, we can help in determining what approach is appropriate and help forming and answering the myriad of questions which arise.

Sewer Plant Construction Law Colorado

Bendelow Law Office recently represented a local municipality in Colorado on a four year battle with a developer over construction of a new sewer plant.  The developer wanted to prohibit construction of the facility so it could control development.  The Colorado town (left unnamed here for legal reasons), was facing regulatory penalties over an aged and non-compliant facility, sought to control its future in providing municipal services.  Through multiple judicial forums and administrative proceedings, we fought with court hearings, briefs and experts.  In the end, the plant was built and is operating as designed, in full compliance with all health and regulatory requirements.  Meanwhile, several members of the development group have asked to connect to the new facility.

Here, a win-win situation wasn’t possible, but the local Colorado town municipality overcame enormous opposition, not from the community, but from a development group who perceived its interests as different from the town.  I believe the opposition was misguided and not in its own long range economic best interest, but they certainly have the right to their own opinions and decisions.  Presented with the need to defend the town, I did so.  If we couldn’t negotiate, I was successfully able to litigate.

Small Business Development in Longmont

I represented a small manufacturer that was interested in opening a facility in Longmont.  On the other hand the community was obviously interested in providing local Longmont employment.  Local jobs build a stronger community; keep wealth closer to home with local purchases helping other businesses.  The community as a whole gains the taxes paid, both property and sales.  In short, it is a win-win for everyone.

The task is always to find the middle ground between incentives available from the community and incentives sought by the manufacturer.

Numerous communities, small, medium and large, are competing for primary employers.  On the other hand these communities need to make reasoned decisions about the incentives they can provide.

My goal was to find that middle ground and mold it into an agreement that was acceptable to all concerned.  I am not a contractor, or an economist, or a planner.  What I was able to do was assemble the necessary resources and with their input, forge a reasonable compromise.

I am pleased to report that we succeeded.  The community and the manufacturer reached an agreement, property was purchased and the stage was set for construction.  Now we have to wait for the economy to turn around so the building can be built, people hired and plans turned into reality.

History of Dealing with Legal Remedies for Property Owners with Polybutylene

Anyone whose business or interests lie in real estate would want to know about a product liability case that effected property values nationwide. It concerns the Qest Quik Sert plastic (polybutylene) plumbing system that was installed in the supply lines of a large number of single family homes condominiums, town homes, apartments, mobile homes, and manufactured homes throughout the United States. It is estimated that between 20,000 and 40,000 properties in Colorado have this system.
The plastic system is a component plumbing system which is manufactured from polybutylene and celcon resins (i.e. plastic). It is assembled with a combination of plastic tubing, plastic fittings, and metal crimp rings. The system was installed in homes built between approximately 1978 through 1993, however, in 1987, the plastic fittings were replaced by metal. Experts have testified that the system is defective (i.e. the fittings crack causing leaks, pipes and fittings pull apart, plastic resins chemically react to chlorine which causes the pipes to erode, continuously circulating hot water weakens the pipes causing leaks and under freezing conditions the pipe/fittings connections loosen).
The system was developed, manufactured, and marketed by U.S. Brass and Vanguard Plastics, Inc. in conjunction with Shell Oil Company, Hoescht-Celanese Corporation, and E.I. du Pont de Nemours & Company. U.S. Brass, Vanguard and other manufactures designed, manufactured, and sold the polybutylene plumbing system. The system was marketed nationally to plumbing manufacturers and cities and counties were lobbied in order to put polybutylene plumbing systems on the list of approved products, despite knowledge of numerous failures and ongoing litigation involving the system. The plastic was marketed as a material suitable for use as fittings for plumbing applications, despite conclusive data that was available in the 1960s and 1970s that chlorinated tap water could erode the fittings. Juries in numerous court cases have found that the manufacturers sold the system despite knowledge of the problems and that they misrepresented their products, knowingly engaged in deceptive trade practices, and acted with gross negligence.
The system is identifiable by looking under a kitchen or bathroom sink, and/or at the plumbing leading to and from the water heater. The piping and fittings are light grey in color and the letters Q-E-S-T, or simply the letter Q are often embossed on a valve or fitting. The piping and fittings are connected with an aluminum, copper or brass crimp ring which is approximately one-half inch wide.
This plumbing has affected property value. Owners and realtors have had difficulty selling property because of the problems associated with the plumbing. Plumbing leaks have damaged and stained carpets, walls, and baseboards. Vinyl flooring curls up at the edges or the seam. Insulation, sheet rock, furniture, and rugs have been ruined. In some cases, ant, spider, roach, and termite problems have developed due to wood rot.
Other damages include the loss of personal time and wages to deal with plumbing problems. Some property owners have had to pay hotel bills while their tenants were turned out of their homes while repairs were being made to the property. Some people have experienced an increase in insurance premiums and utility bills. Many plumbers refuse to work on the polybutylene plumbing system.
In 1989, I became involved in litigation involving the system almost everywhere it was installed and became a national problem. This system was the subject matter of a “60 Minutes” segment in 1990 and was also highlighted on the “Good Morning America” show on March 11, 1993.
I researched and handled claims regarding serious problems with this defective plastic plumbing system for several years. After extensive negotiations with the manufacturers of this product we settled the claims of over 10,000 single-family home, town home, condominium, apartment, manufactured, and mobile home owners which were plumbed with the system throughout Colorado. We were part of a national settlement of $1.2 billion in 1993, the largest property settlement in history as of that time.

Business Law – Joint Owners

Capable. Lean. Agile.

It is a common practice when two folks start a business to decide on joint ownership. It might be as 50-50 partners in a partnership, or 50% ownership in stock, or as equal members and joint managers of an LLC. Let me suggest it is a recipe for major trouble, or a disaster.

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The problem comes when there is a disagreement. How do you settle it? Somebody has to concede, or there is no resolution–which is what commonly happens. Since neither party has a majority, either party can block a decision. The decision then gets made by a third party–either an arbitrator or a judge. That means you have turned your business and the resolution of the dispute over to someone you don’t know, who knows nothing about the nuances of your business, or the effect of resolving the impasse. His/her job is to resolve the dispute–that’s it.

Usually the dispute is over a big issue. Sometimes it is financial, sometimes it is emotional. Whatever the basis, it is obviously important enough to the parties to create this impasse and commonly means the relationship cannot continue.

As radical and unacceptable as this may sound, I suggest that someone has to have the final decision making authority, otherwise you are back to the judge or arbitrator. Remember that the decision maker has a fiduciary duty to the best interests of the business, not their personal interests.