Articles Tagged with “New Jersey Business lawyers”

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New Jersey business law allows people and businesses to manage their relationships by entering contracts which define the terms of that relationship.  Contracts are enforceable by the full force of the law.  For instance, if one party owes another money under a contract but doesn’t pay, the wronged party can go to court; if it can prove its case the court will enter a judgment in its favor and it can then have the county sheriff go seize the breaching party’s property to pay the debt.

In some cases, all or part of a contract may not be enforceable.  This area of New Jersey business law contains three distinct and important concepts: void contracts, voidable contracts, and severability.

Void Contracts or Contract Provisions

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signature-962355__340-300x225Contracts Under New Jersey Business Law

Under New Jersey business law, when two or more parties enter into a contract they are essentially writing their own law which will govern their relationship.  A valid contract – one where each of the parties exchange value (“consideration”) and agree to the terms which will govern their relationship or transaction – will be enforced by courts.  If there is a dispute, a court will make a decision which can be fully enforced.

The Covenant of Good Faith and Fair Dealing

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signature-962364__340-300x225Representing parties negotiating contracts and litigating over breach of contracts are some of our attorneys’ main practice areas.  New Jersey contract law recognizes both contracts and “quasi-contracts.”  This post examines what these are and the differences between them.

Contracts

New Jersey contract law defines a contract as a voluntary agreement for mutual obligations based on a common understanding resulting from “offer and acceptance.”   New Jersey’s Model Civil Jury Charges have laid out the required elements to create a binding contract: (1) a meeting of the minds between the parties to the contract, (2) offer and acceptance, (3) valid consideration, ie., mutuality of obligations,  and (4) certainty — clear and definite terms.

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american-963191__340-300x200New Jersey’s Uniform Fraudulent Transfer Act, often referred to as the “UFTA,” is designed to protect creditors from debtors who transfer assets to avoid paying their debts.  New Jersey’s Supreme Court recently issued a landmark decision on the UFTA.

In the case of Motorword, Inc. vs. William Benkendorf, et al., the New Jersey Supreme Court overturned an Appellate Division decision which had approved of the cancellation of a loan in a very fact-sensitive decision.  Carol and Morton Salkind owned multiple companies, including Motorworld, Inc., Fox Development, Inc., and Giant Associates, Inc.  Benk did landscaping work for Fox and Giant; Fox and Giant paid approximately $4,000,000 to Benk, but still owed about $1,000,000.  Morton Salkind and Benk’s owner, William Benkendorf, were longtime friends and business associates, but Benkendorf did not expect to collect the last $1,000,000.

Benkendorf ran into trouble with the IRS and needed to resolve some payroll tax issues.  He asked Morton for a loan.  Morton agreed, but required that it go through Motorworld, and that the debts of Giant and Fox could not be used to offset the loan obligation.  They signed the note for the loan, and Carol loaned $500,000 to Motorworld to fund the loan.  Benkendorf did not pay, despite extensions and amendments, and incurred significant interest and penalties which increased the amount due to more than $1,000,000.  Eventually, because of Benkendorf’s financial difficulties, Morton agreed to forgive the loan from Motorworld in exchange for Berkendorf forgiving the amounts due from Fox and Giant.  So essentially the debts owed between the Salkinds’ companies and Benkendorf and his companies were mutually extinguished, which would be fine and fair – and legal – if the story ended there.  (Of course, if it did the courts would have never become involved….)

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briefcase.jpgIt isn’t every day that the activity of your business catches the attention of the White House. In February 2013, the Executive Office issued its Administration Strategy on Mitigating the Theft of U.S. Trade Secrets, the result of the collaboration of different departments to develop a strategy to protect the innovation that drives the American economy. Trade secret theft is bad for businesses, and it is bad for the United States, with results that could be detrimental to our economy and American jobs. Efforts to steal American trade secrets are on the rise, but your corporation can act to protect itself.

The Administration proposed voluntary “best practices” for private industry to implement to protect its trade secrets, which are geared toward identifying the threat to targeted technologies and examining corporate procedures in light of the threat and potential impact. Businesses are responsible for making sure they have information and reporting systems and for monitoring those systems to avoid illegal conduct by the businesses employees as well as to protect against outside threats. The following are some of the steps to take in developing company procedures:

  • Determine the specific information to be regarded as a trade secret.
  • Take reasonable measures to protect the secrecy of the information.
  • Identify potential risks and threats to identified trade secrets.
  • Take additional measures to protect trade secret information where appropriate.
  • Examine internal operations and policies to determine whether current approaches are mitigating the risks and factors associated with trade secret misappropriation, considering the following areas:
  • research and development compartmentalization
  • information security policies,
  • physical security policies, and
  • human resource policies.
  • Periodically reevaluate procedures to determine the adequacy of mitigating threats to the trade secrets.
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