Archive for the ‘Business’ Category

Can I sue for back child support if we just had a verbal agreement?

Sunday, October 23rd, 2011

I found this question in my email this week, and it is one that I get relatively often.

This is not just a question about child support.  It is also a question about whether or not you can enforce the terms of a verbal agreement.

Verbal agreements are valid.  You don’t necessarily need to have a written agreement to do anything, and we do it all the time.  Simple things like ‘I’ll meet you at noon for lunch’ is an agreement.  Or ‘I’ll pay for dinner if you get the tip’ is an agreement.  Most of the time these agreements work just fine and there are no problems.

But what if one party doesn’t do what was agreed?  What if I paid for dinner and you didn’t bring any money for the tip?  Or what if you brought money for the tip, but I didn’t bring enough money for dinner?

The problem is not whether the agreement was valid, the problem is whether or not you can enforce the terms of the agreement.

When you sue someone, you are asking the court to enforce the terms of your agreement.

The problem with verbal agreements is that there are often no other witnesses.  So if and when you go to court to ask the judge to enforce the agreement, the other person can just say that they didn’t make the verbal agreement.  Then it’s your word against theirs and the judge has a hard time finding sufficient evidence to enforce what you assert is an agreement.  Maybe the other person thought that they had only agreed to pay a tip up to one dollar?  Or maybe I agreed to pay for dinner, but only up to $10 and you ordered something much more expensive?  Or maybe I thought that the dinner was going to be that night and you cancelled and wanted to have the agreement reinstated for a dinner two months later?  And what if there was a witness to the agreement, but he is no longer available to testify, or maybe he forgot?  Maybe the other person thought it was a joke?  Or maybe the other person felt that they had to agree or something bad would happen to them?

Without something in writing, it is more difficult to prove the actual terms of the agreement.

Most people go to court to get a child support order.  An order of the court gives you extra power of enforcement because you can now bring a contempt charge if the person refuses to obey an order of the court.  The courts take these very seriously and a non-paying parent can be put in jail.

In the Commonwealth of Virginia, the amount that should be paid for child support is actually located in the Code of Virginia in Section 20-108.2 There are also online resources that can help you to calculate the correct amount of child support such as the Child Support Obligation Calculator on the Department of Social Services website.   The amount in the child support obligation calculator is the amount that the laws of Virginia say should be paid for the support of the child.  The laws of Virginia also allow the parents to agree to a different amount of support, so long as both parents agree that the different amount will be sufficient to pay for the child and that the custodial parent will not need to use government funds to supplement their household income.  The parents cannot agree to a lesser amount of support if the child is going to be eligible for TANF or WIC or any other government funds.  The parents may also agree to a higher amount of support if they wish.

If you are going to do this all on your own without the help of either the court or DCSE, then I suggest that you complete the form online and include a print-out of the calculation with a written agreement that is signed and dated by both parents.  However, I do not recommend doing it yourself.

My advice in these cases is for the parents to go to court to get the order.  It is not expensive, and you don’t necessarily need an attorney.  You can also go to the Department of Social Services, Division of Child Support Enforcement to file the paperwork and you may not need to go to court at all.

As long as both sides to an agreement do what they are supposed to do, there is never a problem.  But if one side does not perform as they agreed, it is much easier to enforce the agreement if there is a court order, or at least some writing as proof of the agreement.

In my experience, there is seldom a writing as a back-up to a verbal agreement to pay child support.  Also, a verbal agreement to pay child support is seldom enforced by the courts because there is just not sufficient evidence to prove that the agreement ever existed.  What usually happens is that the court will order support to be paid from the date of the petition for the court hearing until the child reaches the age of maturity, but there is seldom an award for ‘back’ child support because there really isn’t any provable ‘back’ support due.

3 day right to rescission

Monday, September 19th, 2011

I get calls from people who bought something (maybe a car from a ‘buy here – pay here’ lot) and they want to know if they can take it back because they are still within the first 3 days.  They always start the conversation with “‘There is a 3 day right to rescission, right?’

Well, maybe right.  But most often, WRONG.

First of all, a rescission is a way of voiding the contract.  It means that things would go back to the prior status as if the contract never happened.  Another way to think of this is that you are cancelling the contract.

There is a 3 day right to rescission when you refinance your home mortgage.  Of course, that also means that the funds are not released until the end of that 3 day period either.

You can also rescind the ‘refund anticipation’ loan from your tax preparer within one day.  Of course, you must either return the check uncashed or give the same amount in cash to payback the loan in full.

There are also some other types of right to rescission, but they are not really common in everyday life.

The big point is that when there is a right to rescission, it will be written into the contract.  That is only one of the reasons that it is very important for people to read contracts before signing.  You really need to know what is in that agreement!  Most of the time there will be a notice of a “Right to Cancel”, or “Cancellation”, or “Right to Rescind”.  As with other parts of the contract, if you don’t understand what something means, don’t sign the contract until it has been explained to you so that you do understand.

If you are talking to a salesperson and he says that you have a right to take the car back at no cost to you, ask him where that is written in the contract, just so you can read it yourself to be sure.  Or, you can just make it a point to wait a few days before you make any big purchase so you have time to consider whether you really want the item.

If you have any questions about this or any other legal subject, please feel free to give us a call at 757-234-4650 or visit our website at http://www.BeaversLaw.com.

My business is an LLC…that means I’m protected…right?

Sunday, July 31st, 2011

I had a client come in recently that had a small construction company that he had set up as an LLC.  That part was fine, and a lot of people use an LLC as a business structure.  This client thought that as long as there was an LLC, all of his personal assets were protected in case there was any legal action against the company.  He had started the company with $100.00 and he had been told that his personal liability would be limited to the amount of his initial investment.

The problem is that even though he had set up the LLC, he did not really treat the LLC as a separate legal entity.  He used the company checking account to pay all of his personal expenses.  Since the income from the LLC flowed through his personal income tax return, that made sense to him.  After all, it was really his money.  So when the house payments were made using checks from the company checking account, it never dawned on him that the house might be considered as belonging to the company and might be attached if someone got a judgement against the company.

He had used an online service to create the LLC and he had filed the ‘Articles of Organization’ just as required.  He had also paid the fees to the service to get the name of his LLC approved and to get a new tax ID for his company (as an aside, you really don’t need to pay for these services).  When he went to the bank to open his checking account, the bank required that he have a business license for the area, so he did that too.  He was all set.  And since the company was his only source of income, he thought it would be easier to just use the one account for all of his banking needs.  That way, he didn’t need to pay any service fees for a different checking account.

He didn’t create an ‘Operating Agreement’ because it wasn’t required by the state and nobody at the internet site told him it might be a good idea.  He didn’t keep track of any changes to how he was managing the company or how he spent the money, because nobody told him he should.

Let’s suppose that one of his customers didn’t like something he had done and the customer sued the company.  The owner thinks his house and cars are safe because they were titled in his personal name and the customer had sued the company. The customer will probably argue that the house and vehicles really belonged to the company because all of the payments had been made by the company directly from the company checking account.  What would happen?

As with most legal situations, the answer is ‘it depends’.  The one thing that we can be sure of is that there will be legal fees to try to sort it all out.

It would be much easier to separate the business assets from the client’s personal assets if the client had created an ‘Operating Agreement’ and established a set amount each month to be paid to himself as a salary which was then put into a separate checking account out of which he paid his personal expenses.  The ‘Operating Agreement’ can also make provisions for the payment of a bonus if there is a month where the income is more than usual.  The ‘Operating Agreement’ might also make provisions for the company use of a personal asset like a truck.

In fact, the ‘Operating Agreement’ can outline a lot of different things that can happen with a company and tells everyone how the company will be managed and operated.  As long as you act according to the terms of the ‘Operating Agreement’, it is much easier to establish whether something is an asset of the company or a personal asset.

I know it seems cheaper to set up your company using an internet service instead of going to an attorney, but you should consider the possibility of future costs as well as the costs today.  Even if all you do is get an initial consultation, what you learn in that consultation might save you a lot more in the long run.

If you have any questions about this or any other legal subject, please feel free to give us a call at 757-234-4650 or visit our website at http://www.BeaversLaw.com.

Read before you sign!

Sunday, August 1st, 2010

It seems that I get calls about legal problems in bulk.  Over the past few days I’ve had several calls from people who have signed a contract (or a lease) and then realized that it was not a good deal.

The problem is that once you have signed the contract, you are usually stuck.

You should take your time to review the contract before you sign.  Read ALL of the fine print.  And only then make the decision to sign.

Some of the language in the contract may be difficult for you to understand because it is in ‘legalese’.  This does not mean that it is bad, it may just be hard for you to understand easily.

Some of the time these contracts are about a business deal.  But sometimes these contracts can be about everyday life such as dance or music lessons.  The subject matter doesn’t really matter.  It is still a contract!

I can help.  I will review your contract and explain what it means in simple language.

Our August Special is a review of your contract for only $50 regardless of the length of the contract.

Why am I doing this service for such a low price?  Because I think it is important for you to know what you are signing before you are legally obligated to follow through.

When do I need a business lawyer?

Saturday, October 31st, 2009

Obviously, you should contact an attorney if you have received notice that you are being sued. But it would probably be a better idea to have legal advice at the earliest possible stage of the game. An attorney can help get you out of a mess, but even more importantly, your attorney can help keep you from getting into that mess in the first place!

The old adage that you should never sign anything until your attorney has had a chance to review it is based on truth.

As a business attorney, I review contracts of all types and make recommendations that will hopefully take into account as many of the ‘what if’ scenarios as possible. Once I have the basics of the contract terms completed, I ask ‘what if ….?’ and then make sure to write down the answer.

For example, in a commercial lease, I will ask ‘what if there is a fire in the property next door and the property involved in this lease has smoke damage?’ Or in starting a new business partnership, I will ask ‘what if one of the partners is injured in an accident and is not able to come to work for 3 months? or 6 months? or ever again?’ Or perhaps, ‘what if your partner and his/her spouse get a divorce?’

Thinking about the ‘what ifs’ and drafting the document to handle those situations is why you should always have an attorney assist you in all of your business needs.

Most of us want to help you have a very successful business, and the best way we can do that is to keep you from ever needing an attorney to help you with a lawsuit!