NY’s Highest Court Rejects Expansion of Common-Interest Doctrine: NY Legal New Updates

New York’s Court of Appeals has reinstated the New York rule that the common-interest doctrine in New York only applies in the context of actual or threatened litigation. The New York common-interest doctrine is a legal concept in New York’s Mergers & Acquisitions Law that provides an exception to the general rule that attorney-client privilege is waived when protected information is shared with a third party – provided that the communication furthers a near-identical legal interest shared by a client and a third party. This doctrine protects M&A transactions in New York in this limited regard when companies seek to execute the transaction because both companies share a common legal interest at that time, but only when the information concerns legal advice in pending or reasonably anticipated litigation. However, the doctrine does not extend beyond this exception. Recently, the lower Appellate Division in New York attempted to expand the protection provided

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Validity and Enforceability of Electronic Signatures in New York

Federal law governs, in most cases in New York, when the use of an electronic signature is valid and enforceable.  The U.S. Electronic Signatures in Global and National Commerce Act (also called ESIGN Act) defines an electronic signature as “an electronic sound, symbol, or process attached to or logically associated with an electronic record and executed or adopted by a person with intent to sign the record.” This definition covers a broad scope, as businesses use different means, methods and technologies that create electronic signatures, including: Check boxes or buttons that state you agree to certain terms and conditions; PIN numbers or passwords; Signing an electronic keypad; or A graphical representation, image or a scan of a handwritten signature. The ESIGN Act protects the validity and enforceability of signatures made electronically, including: A signature, contract, or other record relating to such transaction may not be denied legal effect, validity, or

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Hiring a New York Divorce Lawyers for International Divorces in New York Courts

Our law firm’s New York attorneys handle many divorce and family matters for our international clients. The major issues that arise are, typically, jurisdiction of the New York courts, service of process and the grounds for the New York divorce.  We wrote an article on the Grounds for a New York divorce and will be posting an article soon, also, on International Service of Divorce Documents in New York soon. New York’s Domestic Relations Law Section 230 allows New York courts to have jurisdiction over the parties in a divorce matter if and only if: “1. The parties were married in the state and either party is a resident thereof when the action is commenced and has been a resident for a continuous period of one year immediately preceding, or 2. The parties have resided in this state as husband and wife and either party is a resident thereof when the

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Suing The New York Government? Exceptions And Extensions To Statutes of Limitation / Notification Periods

When you are suing the New York government, there are strict time limitations for notice and filing your claim, but they are not without exception or without the ability to extend under special circumstances. Recently, we featured a blog post about the statute of limitations when suing a New York municipal entity or authority.  However, there are exceptions to the rule and motion practices you can attempt to pursue if none of those exceptions apply. These statutes of limitations and the statutory period of notice of claims are tricky depending on the nature of the claim and the legal status of the claimant, so consult an attorney in New York immediately should you choose to sue a New York municipal entity or authority. Claim Notification Exceptions in New York If your claim against a New York municipal entity or authority involves a claim by an infant (person under the age of

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SEC Regulation D – Private Offerings: NY Startup Law

Start-ups in New York looking for investment capital should consider the classification of investors that can and cannot partake in private offerings.  Under the Securities and Exchange Commission’s Regulation D, an organization may issue a private offering of stock to raise funds without officially registering to “go public.” We discussed the nature of Regulation D offerings, which are also called “private placements” in an earlier blog post. Only certain types of investors may participate in a Regulation D offering.  To understand why the SEC encourages certain kinds of investors over others, it is important to understand the different types of investors in the market: Accredited Investor: This is defined as an individual that has earned US$200,000 or more on an annual basis for the past two out of the three years and is likely to make that same amount this year. Alternatively, an accredited investor can fail to meet the income threshold,

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Should I Purchase a Franchise Or Start My Own Business in New York: Six Factors For Your Consideration

Choosing between franchise or starting your own business in New York is an important choice that can have a major impact on your future.  The choice may, ultimately come down to your personality. Weighing the pros and cons of purchasing a franchise against starting a non-franchised business begins with some self-reflection.  If you are an independent person that likes to experiment or wants to blaze your own trail, a franchise with rigorous systems and proscribed rules is probably not for you.  If you want to run a business, but do not know where to begin, a franchise with its own established processes and IP may be the right choice for you.  Of course, your initial budget is another factor to weigh. Beyond the above introspection, the pros and cons of a franchised business versus a non-franchised business in terms of both investment and goals for starting a business should be

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Maximum Rates Of Interest Allowed On Private Loans In New York: New York Usury Law

Charging interest rates that exceed the state maximum allowed by law is called usury (also commonly referred to as “loansharking”), which is illegal.  When it comes to determining at what rate a particular interest charge becomes actionable on a civil basis (where a borrower can object to the terms of the loan), and at what rate the charge may actually expose the lender to criminal liability, New York Law can be a little complicated. Usury laws in New York, regulate the maximum interest rate a person or entity may be charged on a money loan.  The applicable laws are the General Obligations Law and the Banking Law, which set civil law limits, and the NY Penal Law, which sets criminal law limits.  Under these laws, if a private loan exceeds the maximum “civil” usury rate, then the entire loan is considered void, and the lender may be denied the right

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Partition Actions in New York: NY Real Estate Law Basics

When a dispute occurs with co-owners of real property in New York it is, often, advisable to initiate a partition action. Under New York’ Partition Law, a partition is a remedy available to any person who is a co-owner of New York real property.  Specifically, under N.Y. Real Prop. Acts. Law § 901, the following individuals with New York real property may lawfully apply for a partition of the NY property: A person holding and in possession of real property as joint tenant or tenant in common, in which he has an estate of inheritance, or for life, or for years, may maintain an action for the partition of the property, and for a sale if it appears that a partition cannot be made without great prejudice to the owners. A person holding a future estate as defined in sections forty, forty-a or forty-b of the real property law or a

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Suing New York Banks in Equity: New York Equitable Accounting Remedy

Recently, we discussed a case where we were able to hold JPMorgan Chase to their word with regards to a stipulation made in a New York court.  We represented a defunct New York corporation suing for the return of a substantial amount of funds that the bank allowed a co-owner to withdraw without the two-signature authorization required by the New York corporate resolution.   Our theory of recovery was sound.  The relationship between the bank and its depositor being that of debtor and creditor, the bank cannot charge the account of the depositor with moneys paid out without authority. Although research has failed to disclose any New York cases directly on point, it is obvious that a check signed by one of two depositors, where both signatures are required, is not authority for such payment. Our client had contracted their rights away when they established the account with JPMorgan Chase.  You see,

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Negotiating New York Royalty Agreements

When negotiating the use of your intellectual property, patent or process in exchange for royalties, these three basic tips are key when commencing negotiating New York royalty agreements and royalty agreements throughout most of the world. This week, we discussed some lessons learned from the recent news that the famed Broadway troupe Blue Man Group was sued over a dispute over royalties brought by a composer as an example of how not to handle setting up a royalty agreement. Here, we’ll discuss factors to keep in mind while negotiating a royalty agreements so you can (hopefully) avoid issues. Words Matter – as do Nuanced Agreements Definitions, requirements and terms do not always mean what you think they mean. That is why you should include a section defining material terms in your agreement. These definitions can be crucial, and must be discussed with your attorneys so that the final document is clear and

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Obtaining A New York Liquor License

Qualifying for a liquor license in New York State may seem straightforward, but will get complicated if you do not know the basics. The application process starts with choosing your business’s location in New York, because it can impact your license application.  A New York business selling alcoholic beverages must be 200 feet from schools and religious buildings. Generally, you must also consider that a license for on-premises liquor consumption may be granted for any premise within 500 feet of three or more existing premises licensed and operating with an on-premises liquor license. This rule can be waived by the New York State Liquor Authority if it determines that the license would be “in the public interest” after consulting with the local Community Board and holding a public hearing commonly referred to as “The 500-Foot Hearing.” Additionally, only qualified persons can obtain a New York State liquor license.  The personal

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When Must Your NY Business Agreements Be In Writing?

While it is always advisable to put all your New York business agreements in writing, there are special rules that govern whether a particular contract must be in writing.  The following is the basics of the New York’s Statute of Frauds Sales of goods Like most states, sales transactions are governed in New York by the Uniform Commercial Code, which has a specific section on when it is necessary for your agreement to be in writing.  The section is referred to as the Statute of Frauds.  The Statute of Frauds in New York states that contracts in New York for the price of $500 or more is not enforceable unless there is some writing sufficient to indicate that a contract has been made.Please note that this doesn’t necessarily require a formal long-form contract – only some writing proving there is a contract.  Of course, the UCC contains conditions and further

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Private Placement Memos Get Start-Ups Moving

Recently, I wrote about the two tools available to small businesses to stir interest and investment – the business plan and the private placement memorandum.  Let’s focus on the private placement memorandum. A Private Placement Memorandum (or PPM for short) is a legal document that organized businesses provide to prospective private investors who may be interested in buying stock or some other kind of security in your business in some kind of private transaction. The PPM will put all of your cards on the table: 1.  Your company’s basics:  Who you are, what you are looking to accomplish and the nature of your business.  This can also include the description of your company and management structure. 2. Your terms:  First and foremost, you will need to identify the rights, restrictions and class of your securities.  This section includes the capitalization of your company before and after offering the securities or

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New York Special Use Doctrine Leads to Special Responsibilities for NY Landlords

Here is some important information for landlords to remember – with special uses come special responsibilities! Last year, a firm attorney in New York argued a matter where our client tripped and fell on a broken concrete pedestrian ramp in front of a two-story mixed-use building, leaving her with a broken ankle. When the building owner and the tenant moved for summary judgment, I opposed it by citing the “special use” doctrine, and won our client a mid-six figure settlement. If you own a commercial or mixed use property, you should know that people making personal injury claims against you have the burden to show that you caused, created or had “actual or constructive notice” of the condition which caused the injury.  But most owners don’t realize that there is a third category for special circumstances that is a “special” exception for curb cuts and ramps that provide access from

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Every New York Business Owner Needs A Will

No one ever wants to think about it, but sooner or later we all meet our maker and before meeting your maker – have a will drafted that complies with New York law and your wishes. Small business owners especially need a will, as their businesses can suffer based on the time it requires to resolve the estate matter.  Not let this happen.  Having a professional drafted will is cheap and painless. A “Last Will and Testament” helps protect your loved ones and allows you to determine what happens to your property – on your terms.  With a will you can leave your property to whomever or whatever entity you want, ensure that any minor children get proper care and settle financial concerns that would be left to your grieving loved ones.  In New York, the alternative to passing without a will, is “Intestacy” and not your own wishes, but

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New York Independent Contractor or Employee? Taxi Union Sues Uber

Lawyers, in New York, representing 5,000 Uber drivers in New York City filed a lawsuit in NY on behalf of 10 of these alleged New York employees in federal court in Manhattan last week accusing the ride-share company of depriving these New York drivers of various employment protections they should have by declaring them as “independent contractors” rather than treating them as employees. This New York independent contractor lawsuit is a pivotal case that can lead to changes in Independent Contractor Law/Employment Law in New York.  We suggest a review of your independent contractor agreements by your attorney and, also, advise following this case closely if you have hired independent contractors. Get your New York attorney on this matter immediately. It is essential to have a carefully drafted independent contract agreement and protocols in place to assist in guaranteeing that an independent contractor is not deemed an employee. New York Taxi

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Registering Your New York Nonprofit For Fundraising Purpopses

If your New York nonprofit is fundraising in New York, then you may likely need to register with the New York Attorney General’s office. Before soliciting contributions from individuals, foundations, corporations or government agencies within New York, a New York nonprofit must register with the NY Attorney General’s General Charities Bureau, unless it falls within one of the many exceptions: Exceptions to the New York Nonprofit Filing Requirements Religious organizations or other organizations with a religious purpose (i.e., a religious school); Educational institutions that solicit contributions only from alumni, the student body, faculty, trustees and their families, and other educational organizations that report to or are chartered by the Board of Regents of the State University of New York are exempt; PTAs (Parent-Teacher Associations); Fraternal, patriotic, social or alumni membership organizations that limit their solicitations to its membership; Law enforcement support groups, veterans organizations, and volunteer firefighter/volunteer ambulance service organizations; Any

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Terminating A Franchise Agreement In New York: NY Franchise Law Basics

The termination or cancellation of a New York franchise relationship requires planning, a thorough understanding of your particular New York franchise agreement and procedural formalities.  Typically, it is advisable to consult with your franchise lawyer. New York Franchise Terminations (Franchisee Considerations) For example, preparation should begin before signing a franchise agreement by a New York franchisee.  Before signing, a would-be franchisee should consider the written terms outlining the right to terminate the franchise agreement.  Other clauses, of course, should be reviewed.  This post, only, addresses one issue of many that a franchisee should consider. Typically, a franchisor shall lay out several conditions it would consider to be breaches of the franchise agreement that trigger termination.  These conditions will not afford an opportunity for either party to cure or correct the specific condition.  These incurable breaches are, typically, material breaches of franchise agreement and, often, New York law.  In some cases, a

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Enforcement of Liquidated Damages Clauses in NY?

When NY businesses contract with others, and those contracts include a clause for liquidated damages, be careful that your New York liquidated damage clause is enforceable in New York and not a mere penalty, or you may have negotiated your way into a New York court. In New York, parties generally are free to set the terms of their own contracts and may agree on the damages for breach in certain circumstances. Specifically, parties are free to agree to liquidated damages, which is damage calculation, typically, used when: damages are difficult or impossible to calculate; and where the amount agreed upon bears a reasonable relationship to the probable loss. Our New York law office drafts, has enforced and has challenged liquidated damage clauses in numerous industries including real estate, service agreements, supply agreements and vendor agreements. When damages resulting from a breach are readily calculable or where the agreed upon

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Prohibiting Dreadlocks Is Not Racial Discrimination: EEOC New York

The U.S. Court of Appeals for the 11th Circuit ruled that a company’s grooming policy prohibiting dreadlocks was not racial discrimination under federal employment law. In EEOC v. Castastophe Management Solutions, a female job seeker responded to an ad for a sales job. The applicant was qualified and interviewed well.  However, as a condition to hiring her, the business requested that she change her hairstyle from dreadlocks to a “professional-looking” haircut because part of her job duties would be selling the business to the public.  The job seeker refused and contacted the Equal Employment Opportunity Commission (EEOC) stating that the business discriminated against her on the basis of her race. T he EEOC then brought a claim for intentional racial discrimination. The EEOC argued that prohibition of dreadlocks in the workplace constitutes race discrimination because dreadlocks are a manner of wearing hair that is physiologically and culturally associated with people

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