Archive for category Contract law
I sold some property that had a lien on it. I can’t afford to pay the lienholder. What is the punishment for this?
Posted by David Leon in Contract law, Criminal Defense, Real Estate Law on 07/05/2010
If you sell secured property (property with a lien on it) and you fail to pay the secured party from the proceeds, you may be charged with Hindering a Secured Creditor, a criminal offense. The potential punishment for this is governed by Tex. Penal Code Sec. 32.33(e):
(1) a Class C misdemeanor if the proceeds obtained from the sale or other disposition are money or goods having a value of less than $20;
(2) a Class B misdemeanor if the proceeds obtained from the sale or other disposition are money or goods having a value of $20 or more but less than $500;
(3) a Class A misdemeanor if the proceeds obtained from the sale or other disposition are money or goods having a value of $500 or more but less than $1,500;
(4) a state jail felony if the proceeds obtained from the sale or other disposition are money or goods having a value of $1,500 or more but less than $20,000;
(5) a felony of the third degree if the proceeds obtained from the sale or other disposition are money or goods having a value of $20,000 or more but less than $100,000;
(6) a felony of the second degree if the proceeds obtained from the sale or other disposition are money or goods having a value of $100,000 or more but less than $200,000; or
(7) a felony of the first degree if the proceeds obtained from the sale or other disposition are money or goods having a value of $200,000 or more.
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I just sold a property that had a lien on it. The lienholder demanded the money from the sale. How long do I have to pay the lienholder?
Posted by David Leon in Business law, Contract law, Real Estate Law on 07/05/2010
As an ideal matter, a lienholder should be paid at closing. Texas penal code sec. 32.33(e) provides: a person is presumed to have intended to appropriate proceeds if the person does not deliver the proceeds to the secured party or account to the secured party for the proceeds before the 11th day after the day that the secured party makes a lawful demand for the proceeds or account.
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There is a lien on my property. I just sold it for cash, but I can’t afford to pay the loan. Now the lienholder is trying to repossess. What can they do to me?
Posted by David Leon in Contract law, Criminal Defense, Real Estate Law on 07/05/2010
A person who is a debtor under a security agreement, and who does not have a right to sell or dispose of the secured property or is required to account to the secured party for the proceeds of a permitted sale or disposition, commits an offense if the person sells or otherwise disposes of the secured property, or does not account to the secured party for the proceeds of a sale or other disposition as required, with intent to appropriate the proceeds or value of the secured property. Tex. Penal Code. 32.33(e)
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Can a common law spouse be a beneficiary of a life insurance policy?
Posted by David Leon in Contract law, Estate planning and probate, Insurance Law on 25/12/2009
Yes. A life insurance applicant may appoint anyone (or any entity) as a beneficiary on a life insurance policy, even a common law spouse. Also, if a common law marriage was in existence, then a common law spouse may have community property interests in a life insurance policy (purchased after the marriage) if the spouse is not listed as a beneficiary.
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Does a late fee make a loan usurious?
Posted by David Leon in Contract law on 05/07/2009
Not necessarily. The Texas Finance Code (Sec. 302) provides a safe harbor for late fees. In order to comply with the safe harbor, the late fee must not accrue until after 10 days past the due date, and the late fee must not be larger than five percent of the late payment (or $7.50, if that amount is greater.)
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What is usury?
Posted by David Leon in Business law, Contract law on 05/07/2009
Usury is the charging of excessive interest rates. The default maximum interest rates are 10% with a written contract, and 6% without a contract, pursuant to Article 16, Sec. 11 of the Texas Constitution. Other Texas statutes govern maximum interest rates for financial institutions, mortgage companies, etc.
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Is it illegal if I hire someone to do my term papers for me?
Posted by David Leon in Contract law, Criminal Defense on 05/07/2009
Sec. 32.50 of the Texas Penal Code makes this a Class C misdemeanor.
The statute says, “A person commits an offense if, with intent to make a profit, the person prepares, sells, offers or advertises for sale, or delivers to another person an academic product when the person knows, or should reasonably have known, that a person intends to submit or use the academic product to satisfy an academic requirement of a person other than the person who prepared the product.
(c) A person commits an offense if, with intent to induce another person to enter into an agreement or obligation to obtain or have prepared an academic product, the person knowingly makes or disseminates a written or oral statement that the person will prepare or cause to be prepared an academic product to be sold for use in satisfying an academic requirement of a person other than the person who prepared the product.”
The statute has a safe harbor provision for jointly prepared assignments with school employees, tutors and transcriptionists.
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Selling a used watch in Texas
Posted by David Leon in Business law, Contract law, Criminal Defense on 25/05/2009
Yes. Title 2, Chapter 17 Subchapter C of the Texas Business and Commerce Code deals specifically with the selling of secondhand watches in the state. Not only must the watch be clearly labeled “secondhand” (17.21) but accurate records must also be maintained under Sec. 17.20. Failure to comply is a crime under Sec. 17.22.
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I contracted with a company to send email ads for me, but I didn't know they violated the law. Can I still be sued?
Posted by David Leon in Business law, Contract law, Intellectual Property, Litigation and judgments on 25/05/2009
Yes, however, you may have a defense. Texas Business and Commerce Code Sec. 321.113 provides a limited immunity from prosecution in the event that a sender acted in good faith in hiring a sender to send compliant unsolicited commercial emails, but the company (without knowledge of the sender) violates the law. However, there may still be liability for violating another state’s laws, if the emails wind up in an out of state user’s mailbox.
QUALIFIED IMMUNITY FROM LIABILITY OF SENDERS. A sender may not be held liable for the transmission of an electronic mail message that violates this chapter if the sender:
(1) contracts in good faith with an electronic mail service provider to transmit electronic mail messages for the sender; and
(2) has no reason to believe the electronic mail service provider will transmit any of the sender’s electronic mail messages in violation of this chapter.
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I run an electronic mail service or internet service provider. Can I be sued if one of my clients sends unsolicited commercial email (spam) without my knowledge?
Posted by David Leon in Business law, Contract law, Litigation and judgments on 25/05/2009
Although you can be sued, you may have a defense under Texas Business and Commerce Code Sec. 321.112. The defense is very specific, and only applies to relay, store and forward servers
IMMUNITY FROM LIABILITY: TELECOMMUNICATIONS UTILITIES AND ELECTRONIC MAIL SERVICE PROVIDERS.
(c) A person injured by a violation of this chapter does not have a cause of action against a telecommunications utility or an electronic mail service provider under this chapter solely because the utility or service provider:
(1) is an intermediary between the sender, or a person acting on behalf of the sender, and the recipient in the transmission of electronic mail that violates this chapter;
(2) provides transmission, routing, relaying, handling, or storing, through an automatic technical process, of an unsolicited commercial electronic mail message through the utility’s or service provider’s computer network or facilities; or
(3) provides telecommunications services, information services, or other services used in the transmission of an electronic mail message that violates this chapter.
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Is it a crime to send a sexually explicit unsolicited commercial email?
Posted by David Leon in Business law, Contract law, Criminal Defense, Intellectual Property, Litigation and judgments on 25/05/2009
Yes, however, Texas Business and Commerce Code Sec. 321.052(a) provides a potential “safe harbor” under Texas law. Failure to comply with 321.052(a) may lead to criminal liability under Sec. 321.101. TRANSMISSION OF MESSAGE CONTAINING OBSCENE MATERIAL OR MATERIAL DEPICTING SEXUAL CONDUCT; CRIMINAL PENALTY. (a) A person commits an offense if the person intentionally takes an action to transmit a message that contains obscene material or material depicting sexual conduct in violation of Section 321.052(a)(1).
(b) An offense under this section is a Class B misdemeanor.
Please note this is state specific, and there may be other state’s law or federal law implications as well.
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I want to send an unsolicited commercial email in Texas. How do I comply?
Posted by David Leon in Business law, Contract law, Intellectual Property on 25/05/2009
Texas provides a limited safe harbor for unsolicited commercial email (a/k/a bulk email or SPAM) Please note, that other states may have different laws that would apply to email sent to residents of that state.
See 321.051 of the Texas Business and Commerce Code. Sec. 321.052.
REQUIREMENT FOR TRANSMISSION OF UNSOLICITED COMMERCIAL ELECTRONIC MAIL MESSAGES.
(a) A person may not intentionally take an action to transmit an unsolicited commercial electronic mail message unless:
(1) “ADV:” appears first in the subject line of the message or, if the message contains obscene material or material depicting sexual conduct, “ADV: ADULT ADVERTISEMENT” appears first in the subject line; and
(2) the sender or a person acting on behalf of the sender provides a functioning return electronic mail address to which a recipient of the message may, at no cost to the recipient, send a reply requesting the removal of the recipient’s electronic mail address from the sender’s electronic mail list.
(b) A sender shall remove a person’s electronic mail address from the sender’s electronic mail list not later than the third day after the date the sender receives a request for removal of that address under Subsection (a)(2).
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How long do I have to sue for breach of contract?
Posted by David Leon in Business law, Contract law, Litigation and judgments on 08/03/2009
Under most circumstances, the statute of limitations for a breach of contract in Texas is four years. (See Sec. 2-275 of the Business & Commerce Code)
However, many contracts may have limiting language altering your right to sue, and some contracts have pre-requisites to your right to sue. Because every contract is different, you should have an attorney review your contract to see if there are any exceptions to the general rule. Additionally, there may be other causes of action that may have shorter limitations periods. Contact Us for more information, or to have your contract review.
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What does FOB mean? What about FAS? What is CIF? and C&F?
Posted by David Leon in Contract law on 08/03/2009
FOB stands for “free on board”. This term is typically used in sales contract, and designates a location for the delivery of goods. For example, FOB Dallas means that the seller would provide the goods at the seller’s expense to Dallas. The buyer is responsible for transport of the goods beyond Dallas.
FAS stands for “free along side”. Typical usage would be FAS (Port or Vessel). This means that the seller is responsible for delivering goods to a specific port or vessel.
CIF stands for “cost insured freight”. This means that the seller will bear the cost of shipping and insurance.
C&F means “cost and freight” which means the seller pays for shipping, but not insurance.
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sworn account suit
Posted by David Leon in Business law, Consumer & Credit, Contract law, Litigation and judgments on 20/02/2009
In Texas, a suit on a sworn account typically involves a business suing a customer who purchased goods and services on a revolving credit account. Typically, this process begins when a customer fails to pay invoices. The aggrieved business will send a demand letter to its customer, with a thirty day notice to pay the invoices. If the customer fails to make arrangements, then the business may file suit on a sworn account. In this action, the business will attach an affidavit to the lawsuit verifying the amount due and owing. The defendant customer then has to file a sworn denial on the account, or face losing the suit. Contact Us if you need help with one of these suits.
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I entered into a contract over the Internet. I’m in Texas and the other party is not, whose law applies?
Posted by David Leon in Business law, Contract law, Litigation and judgments on 15/02/2009
As a general rule, if a contract made solely over the Internet between a person located in this state and a person located outside this state who does not maintain an office or agent in this state for transacting business in this state, then Texas law applies unless each Texas party:
(1) is given notice that the law of the state in which another party to the contract is located applies to the contract; and
(2) agrees to the application of that state’s law.
(Texas Bus & Commerce Code Sec. 271 & 274)
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I sold my house to a company for a low price, and they agreed to lease it back to me. Can I get my house back?
Posted by David Leon in Contract law, Real Estate Law on 15/02/2009
Possibly. Texas Property Code provides that the taking of a deed under these circumstances may be considered a deceptive trade practice. Accordingly, the deed may be void and no lien would attach to the homestead property as a result of the purported sale.
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A company offered to buy my house at a discount and then rent it back to me.
Posted by David Leon in Contract law, Real Estate Law on 15/02/2009
First, if the house is mortgaged, then the transfer of the interest in the property may violate the mortgage’s “due on sale” clause. This means that the mortgage company has the option to call the entire amount of the loan due and payable. Further, such a transaction, may be considered to be a loan, if the house was sold at less than fair market value. This means that all payments made from the seller to the buyer in excess of the sales price will considered to be interest subject to the Texas Finance Code. These cases tend to be fact specific, Contact Us if you wish to discuss.
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I’m still confused about this independent contractor vs. employee determination. Can I ask the IRS for a determination?
Posted by David Leon in Business law, Contract law, Employment law on 18/01/2009
Yes! The IRS has Form SS-8, Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding
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Independent Contractors versus Employees in Texas
Posted by David Leon in Business law, Contract law, Employment law on 18/01/2009
The IRS uses three main criteria when determining whether or not someone is an employee or independent contractor.
From the IRS.gov website:
Behavioral: Does the company control or have the right to control what the worker does and how the worker does his or her job?
Financial: Are the business aspects of the worker’s job controlled by the payer? (these include things like how worker is paid, whether expenses are reimbursed, who provides tools/supplies, etc.)
Type of Relationship: Are there written contracts or employee type benefits (i.e. pension plan, insurance, vacation pay, etc.)? Will the relationship continue and is the work performed a key aspect of the business?
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Independent Contractors versus Employees in Texas
Posted by David Leon in Business law, Contract law, Employment law on 18/01/2009
No, there is no “bright line” test determine whether or not a person is an employee or an independent contractor. The IRS will look at the entire relationship between the parties.
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Independent Contractors versus Employees in Texas
Posted by David Leon in Business law, Contract law, Employment law on 18/01/2009
No. From the perspective of the IRS, the IRS doesn’t care if you label a person an employee, independent contractor or anything else. The IRS will look at the entire relationship between the parties. If you incorrectly label someone an independent contractor when they are in fact an employee, you could face serious liability. The IRS has its own criteria for determining a person’s status as employee vs. independent contractor.
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Independent Contractors versus Employees in Texas
Posted by David Leon in Business law, Contract law, Employment law on 18/01/2009
This is a common question. Many small business owners want help, but don’t want the added hassle (or taxes) of hiring employees. Many business owners believe that they can just simply classify someone as an independent contractor by contract and be done with it. The problem is that the IRS may not agree with your assessment as to whether a person is an employee or independent contractor (even if your agreement specifically states such.) The IRS has its own criteria for determining a person’s status. The contract is only a factor, but it is not determinative. The IRS will look at the entire relationship. Further, if you incorrectly classify someone as an independent contractor, you can face some serious fines from the IRS.
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I have a contract and the other side did not perform as promised. What can I do?
Posted by David Leon in Contract law, Litigation and judgments on 24/11/2007
Breach of contract cases are very common. The first step is to document everything possible. You should keep track of who you spoke with, what you discussed, the dates and the times. When possible, you should also follow up any communications with written letters.
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I have a simple transaction that I need to complete for my business. Do I need a contract?
Posted by David Leon in Business law, Contract law on 24/11/2007
The purpose of the contract is to ensure that both sides of an agreement are fully aware of their respective obligations. This is referred to as a “meeting of the minds.” In some cases, one or both parties may have had a different expectation of a transaction, even if the transaction was supposed to be simple. Also, sometimes there is a situation that prevents one side or the other from performing as promised. This is where you need to have a well drafted contract. If done properly, contracts can help avoid litigation, and can protect you and your business if an unexpected event occurs. Contact Us for more information.
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