NY Agency Law Basics: Obtaining an agent to distribute your products in New York

New York Agency law deals with the relationship between an “agent,” and a “principal.” An agency relationship forms when a principal asks an individual to act on behalf of the principal and the action of the agent may bind the principal in some way.  Agency, in short, is a fiduciary relationship where an agent acts for a principal subject to control of the principal. Under these circumstances, a principal will be liable for contracts entered into by agents when (1) the a fiduciary relationship exists between an agent and principle  (2) the agent acted with some kind of authority, and (3) a contractual obligation is created between the agent and a third party.  The idea of authority can be a tricky one to nail down. Actual, Apparent  & Inherent Authority to Act for a Principal in New York An agency relationship can be, and often is, enforced by written agreements

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Federal Trademark Basics: What You Can Learn From The “New York Fashion Week” Trademark Controversy

A growing controversy over the use of a widely-known phrase in the New York fashion industry is a perfect example of why you need to protect your trade names and marks immediately. If you are fashion-forward, or a New York resident, then you have probably heard of the phrase “New York Fashion Week,” which signifies a week-long grouping of events where designers reveal their latest creations put on by the Council of Fashion Designers of America (“CFDA”) and WME-IMG (formerly known as William Morris Endeavor.) Recently, CFDA and WME-IMG were sued by Fashion Week, Inc. for infringing upon its use of the trademarked phrase “New York Fashion Week.” The lawsuit follows a ruling from earlier this year by the Trademark Trial and Appeal Board (TTAB) determining that CFDA and WME-IMG do not have legal rights to the name. In that trademark proceeding, CFDA argued that the trade organization and “its predecessors-in-interest

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Authenticating International Documents for use in New York

If you want to enforce a judgment in New York, or any other international document, headed to or coming from another nation, you should understand the process by which those documents are authenticated. An American court will not take a foreign document at face value. It must be authenticated before it can be considered by a New York court. That means the document must go through a process of authentication, or legalization. Most documents require and Apostille. The easiest method is to obtain an Apostille, which is an authentication of a public document that governments issued if they are a party to the 1961 Hague Convention abolishing the Requirement of Legalization for Foreign Public Documents. The Convention provides for simplified certification of public and/or notarized documents to be used in countries that have joined the Convention. Signatory countries have agreed to recognize public documents issued by other signatory countries under

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Revised New York Court Rule for Submitting Confidential Documents in Commercial Litigation in NY

New changes in how New York Court’s Commercial Division will have litigant file confidential documents submitted takes effect today.  The changes are part of an amendment to the division’s Standard Form of Confidentiality Order that establishes a more formal process for submitting confidential documents in an e-filed case in New York. Litigants in counties with mandatory e-filing (like New York County) will be able to file redacted versions of the confidential documents, but then must move to seal the documents within seven days or they will be required to take steps to replace the redacted filings with un-redacted versions. Previously, litigants could file confidential documents as hard copies with a motion to seal, or sidestep the process of obtaining a formal motion to seal and submit papers directly to the assigned judge’s chambers without filing them. This created problems for New York appeals because without a proper motion on file,

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NY Franchising Red Flags

If you are thinking about entering into a franchise agreement in New York, please consider these New York Franchise Warning Signs.  All of the laws in New York that are intended to protect potential investors in franchises are not meant to act as a substitute for good business sense, so be aware of these common red flags, do your due diligence and hire a New York franchise lawyer to assist in the negotiation and evaluation of the franchise opportunity. Failure to Disclose Legally Necessary Details to Franchisees Under New York law, no offer or sale of a franchise can take place until the franchisor has registered franchise disclosure documents (FDD) with the state of New York.  Sometimes called a prospectus, the FDD contains 20+ different items of information about the franchise including the the history of the fanchisor, required fees and investment costs – among other things.If you do not receive

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IRS 501(c)(3) Organizations vs. IRS 501(c)(4) Organizations: New York Non-Profit Law Basics

We have clients at our law firm in New York operating non-profit businesses in New York that require advice on IRS 501(c)(3) vs. IRS 501(c)(4) organizations. We hope this and a few other articles we have will be useful for the reader. Whether your New York nonprofit should apply for tax exemption under IRS 501(c)(4) depends upon the type of organization you have and the political activities it may be undertaking. New York nonprofits that are civil leagues and local associations that further a social welfare objective, but do not quite meet the level of a charitable organization (religious, educational, charitable purposes), may pursue exemption under 501(c)(3).  For example, a local civic association, homeowner’s association, or the local Lions Club, are organizations that meet this description. New York nonprofits that wish to freely conduct political or lobbying efforts, gain support or opposition for political candidates or take action to pass or

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New York May Make Airbnb Short-Term Rentals Illegal: New York Rental Law Updates

New York may pass legislation by the end of the week making it illegal for New Yorkers to list short-term rentals on Airbnb. In a rare show of bipartisan support, a bill to ban Airbnb-style posts for short-term sublets could get floor votes on the floors of the New York State Assembly and New York State Senate this week.  If the Anti-AirBnB Law is signed into law, advertising short-term sublets or any use other than permanent residency of these sublets shall be illegal in New York. The legislation seems focused on commercial users of Airbnb who turn their residences into illegal and unregulated hotels. Under these new New York laws, the liability for advertising short-term rentals would shift from building owners to the renters and those who place the advertisements on sites like Airbnb, with penalties ranging from $1,000 for a first offense to $7,500 for third and subsequent violations.

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Protect Your NY Company’s Confidential Information

Every NY business keeps confidential information that it must protect from three common occurrences in the course of operations: Accidental Disclosure The most common way a NY business will lose protection of confidential information is through accidental disclosure. This is most likely because NY businesses fail to outline to employees, independent contractors, consultants and service providers what information must remain confidential. Failure to Create Confidentiality Agreements & Non-Compete Agreements Sometimes, a NY business may identify the confidential information that it will need to offer to an employee, independent contractor, consultant or service provider, but not take any additional steps to preserve that confidentiality. If and when that confidentiality is breached, the NY business is left with little to no legal recourse, in most cases, until the business has a confidentiality agreement. Theft by Ex-Employees Some employees who leave a NY business may be tempted to make a copy of confidential

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Definition of a Franchise in New York State: New York Franchise Law Basics

New York has a broad definition of a franchise, thus, leading to a broad range of mere “licensing” and “agent/distributor” relationships as franchises.  Any business organization that is deemed or may be deemed a franchise by the State of New York should, immediately, retain a New York-based franchise attorney with significant experience in the business and legal side of franchising in NY.  A designation of a business relationship as a franchise, immediately, requires obligations of the franchisor including disclosure and registration requirements.  Our New York franchise lawyers shall be writing followup articles on franchise obligations under New York law over the next few weeks. Definition of a Franchise in New York Section 608 of the New York code defines a franchise in New York as: 3. “Franchise” means a contract or agreement, either expressed or implied, whether oral or written, between two or more persons by which: (a) A franchisee

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A Chapter 11 Bankruptcy May Save Your NY Business: New York Bankruptcy Law

With news that Gawker is filing for Chapter 11 bankruptcy protection after losing a $140 million dollar judgment to Hulk Hogan for defamation, now is a good time to introduce New York businesses to what a Chapter 11 bankruptcy is, and how it may save your NY business. Chapter 11 of the U.S. Bankruptcy Code is titled “Reorganization,” because it created legal tools for businesses to remain in possession of their assets and restructure so it may continue operating.  This is available for all sizes of businesses. The goal is to obtain permission to reorganize your business based upon a court-approved plan that sets out the terms and duration for debt to be repaid. Plans can include discounted payment amounts, modification of debt, reductions in principal or interest. Filing a Chapter 11 Petition in U.S. Bankruptcy Court is not a simple matter. Your business shall need an NY Bankruptcy attorney

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Enforcing a New York Judgment Abroad: Service under the Hague Service Convention

We are presently working on a case where a New York law firm obtained a judgement against a Korean debtor in a New York court and the attorney in New York failed to serve the defendant under the Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters (“Hague Service Convention”).  This New York lawyer, wrongfully, believed that all that was needed to be complied with is service under the requirements of New York law.  The attorney was mistaken. If you are interested in enforcing a New York judgment in Korea please see our sister blog at: Enforcing of Foreign Judgments in Korea. If you are interested in enforcing a foreign judgment in New York please see: Enforcement of a Foreign Judgment in New York. Too many local New York attorneys think in this fashion, because of the lack of experience in international law.  This sad

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Are NYC Rent-Controlled Tenants Using AirBnB Breaching Their Leases?

AirBnB may be an answer to homeowners and property owners looking to supplement income, but if you are a New York City landlord of a rent-controlled property – beware!  Your tenants may be breaking the law!  For the uninitiated, AirBnB is an online marketplace where prospective guests look for a bed to stay in from hosts listing spare rooms and properties for short term rentals.  They operate very much like a hotel where guests stay in the host’s property for a fee. In New York City, landlords and property managers have been cracking down on tenants seeking to get in on the AirBnB action by subletting out their space for amounts exceeding their subsidized rent, in clear violation of the New York Landlord-Tenant Law.  Recent decisions shed some light on why AirBnB, though seeing a growth in popularity, are facing many legal issues when the hosts is not the property owner.

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A Good Business Plan May Turn your New York Startup Into Dollars

Recently, we wrote about the two main tools available to small businesses to stir interest in and investment in your business – the business plan and the private placement memorandum.  While this blog is, mainly, for New York businesses, the following article can apply to business throughout the world. A business plan is a document created by businesses with a few goals in mind.  It should introduce your business idea, describe the fundamentals of your business and provide financial data to show potential investors that your business idea may be profitable. A business plan canentice potential investors or simply be a road map for yourself to chart the course of your business.  For now, let’s focus on how to use a business plan to raise money for your start-up. If you want your business plan to be attractive to investors, it must be a more persuasive document than a simple

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Vital Business Agreements Before Starting a Business in New York: NY Startup Basics

The following is a list of the basic business agreements that we advise prior to operating a New York business. This list is not intended to be exhaustive and some types of NY companies require specialized business agreements that are unique to the specific industry. Basic New York Corporate Agreements Operating/Shareholder Agreement Employee Agreements Consulting/Independent Contractor Agreements Confidentiality Agreement Terms of Use/Privacy Policy for Website Vendor Agreements License Agreements Service & Sales Agreement Intellectual Property Agreement Lease Agreement Joint Venture Agreement/Shareholder Agreements For a no cost consultation, CONTACT US for an appointment. (c) Sean Hayes – SJ IPG. All Rights reserved.  Do not duplicate any content on this blog without the express written permission of the author. info@ipglegal.com.

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New York S Corp vs. LLC Basics: Choosing your Corporate Entity in New York

Many of our New York law firm clients considering establishing a business entity in New York, often, are conflicted whether they should choose to establish a New York S Corporation (“S Corp”) or a New York limited liability company (“LLC”).  Choosing whether to establish as a New York S Corporation or an LLC is, often, an important decision for a New York company and its shareholders/members, thus, don’t take this choice for granted and consider the pros and cons with New York business-savvy attorney. The following may help initiate the conversation with your New York attorney.  If you are doing a deal with a non-American company or individual make sure to hire an international lawyer with experience working on transnational deals.  Additionally, these corporate forms are, generally, not available for professional corporations (i.e. law firms). NY S Corporation Basics An NY S Corporation is a Pass-Through Entity meaning that each

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New York Partnership & Joint Venture Due Diligence Checklist

We, regretfully, see too many New York, New Jersey and Connecticut companies entering into business relationships with foreign nationals & corporations with little foresight.  Often cultural and divergent business ethics leads to immediate issues.  The following Merger & Acquisition Due Diligence Checklist is intended as a guide to vetting a prospective partner/joint venture for business in New York.  The list is not exhaustive and an experienced New York attorney is, normally, necessary to join your due diligence team.  This list is, also, useful for those doing being with New York companies and individuals, but was specifically tailored based on experience with Asian companies.  Please don’t chase an opportunity without considering the risks.  The cost is, likely, less than you think and risks are, likely, greater than you imagine. This New York-Focused Merger & Acquisition Due Diligence Checklist is not a substitute for retaining a New York attorney to assist with your New

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Proving Civil Fraud In NY

Fraud comes in different forms in New York, which recognizes both common law fraud and statutory fraudulent behavior. In business, as in life, people are not always as reputable and they appear. Unfortunately, there are less than scrupulous business actors who will resort to fraudulent misrepresentations to gain what you have – recourse does exist. New York Civil Common Law Fraudulent Misrepresentation the defendant made an intentional material false representation; the plaintiff reasonably relied upon the defendant’s fraudulent misrepresentation; and the plaintiff suffered damage as a result of their reliance on the fraudulent misrepresentation. The burden of proving the elements of fraudulent misrepresentations is by “clear and convincing evidence” which is a substantially greater burden of proof than the normal “preponderance of the evidence” standard. This standard, usually, means that a plaintiff needs to establish at trial by clear and convincing evidence that a defendant had actual knowledge of some material

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IP Infringement vs. Fair Use? Protecting Federal Trademarks in New York State

Seems like a lot of high-profile trademark issues are happening all over New York. A recent federal matter outlines the basics of federal trademark litigation and the arguments a New York business may use to attempt to enforce a trademark against a violator of your trademark. A federal judge in New York State recently ruled that The Car-Freshner Corporation – which makes the pine tree-shaped air fresheners that hang in millions of vehicles across the country –  has demonstrated that it may lay claim to the tree-shaped symbol through its various federal trademark registrations and more than 60 years. Car-Freshner claims that Sun Cedar, a non-profit business based out of Kansas, violated the Lanham Act and New York Law by making and marketing a car air-freshener in the same tree-shape and using a virtually identical symbol that Car-Freshner has registered as its trademark as early as 1961. It further argued

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