Business Law

A Baker’s Dozen of Things Businesses Should Know About Business Law

1. If you click “I agree” to a website’s terms and conditions, the terms and conditions are likely enforceable against you.

2. If a worker invents something in the course of the worker’s employment, the right to patent that invention does not automatically belong to the employer.

3. Misclassifying a worker as an exempt employee or as an independent contractor could cost the employer a lot of money. Employers are required to deduct and submit payroll taxes to the taxing authorities for their employees, and non-exempt employees are entitled to overtime pay.

4. A company that buys another business can be held responsible for unpaid taxes of the purchased business. An asset purchase agreement might say that the seller is responsible for all pre-sale liabilities, but the taxing authorities can still go after the purchaser of a business.

5. A company that buys another business can be held responsible for the environmental liabilities of the purchased business.

6. If you buy or sell goods or services using purchase orders instead of signed contracts, your “small print” terms and conditions may very well not be effective. Consider having your customers sign a contract if you offer a limited repair and replacement warranty.

7. An employer can be held liable for injuries caused to another, if its employee negligently causes a motor vehicle accident in the course of employment, e.g. while talking on a cell phone.

8. Owners of trade secrets must take reasonable precautions to keep the information secret. That probably means, at a minimum, requiring third parties to sign a non-disclosure agreement before being granted access to the information.

9. If you don’t “perfect” a security interest in goods you sell as security for payment by filing a UCC financing statement with the Secretary of State, you might lose your security interest if your customer files for bankruptcy before paying your invoice.

10. A Phase I report done in conjunction with the purchase of a business won’t tell you if the business is operating in compliance with environmental laws.

11. If you sign your customer’s purchase order, it is more likely that their onerous “fine print” terms will be enforceable against you.

12. If you don’t send your own “fine print” terms with an order acknowledgement, it is more likely that your customer’s fine print terms will be enforceable against you.

13. If your business leases property from another, it could be liable for existing contamination.

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