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Houston Business & Commercial Law Blog

How can you avoid shareholder disputes?

Whether it is a small one-person operation or a large public corporation, the people who own a business are known as the shareholders. The Houston Chronicle points out that shareholders are both directly and indirectly involved in their company’s operations. Consequently, shareholder disputes may disrupt not only how a business functions, but also its bottom line. However, there are things that you may do to help avoid shareholder disputes.

Perhaps the most important thing that you can do is to ensure you have a shareholder agreement in place. This type of legal document will specify how your business will be run, including how day to day matters will be handled and how important decisions will be made. Additionally, shareholder agreements may include details stipulating how disputes will be dealt with.

What is a fiduciary duty?

There are some business relationships in Texas, and elsewhere, which may impose legal requirements of care and loyalty. These requirements may be referred to as a fiduciary duty. According to the Cornell University Law School’s Legal Information Institute, a fiduciary duty is a legal responsibility to act solely in the interests of another person, group or business. Failing to uphold these duties may be considered a breach of your fiduciary duties, which may lead to a business dispute.

There are numerous examples of fiduciary relationships. For example, an investment manager might owe a fiduciary duty to the participants in a pension plan. As a fiduciary, or someone who owes such a duty, you make take legal title to certain assets. However, the assets do not belong to you. Rather, you are only permitted to administer and manage the assets for a specific purpose and for a limited amount of time. While in control of the assets, you are expected and required to manage them in accordance with the wishes of the person who you are representing.

Enforcing non-compete agreements in Texas

As a previous post has discussed, non-compete agreements are a contract clause that Texas employers may use to prohibit workers from working for their competitors after leaving their employment. Sometimes, however, issues may arise when employers seek to enforce such covenants. Therefore, it behooves business owners to understand when covenants not to compete are enforceable to help ensure that these clauses are structured appropriately.

In general, there are certain requirements that must be met in order to enforce non-compete agreements. Under the Texas Free Enterprise and Antitrust Act of 1983, covenants not to compete are only enforceable if they are supporting, or a part of, agreements that are otherwise enforceable. For example, if a legally binding employment contract includes a non-compete agreement, the court may hold an employee to it.

Elements to include in your Texas commercial lease

Like other Texas business owners, you may need to rent a commercial space to run your business out of. When you find a building or space that fits your needs, you will likely sign a lease agreement with a landlord. Here at The Jackson Law Firm, we know that the elements you include in your such an agreement may help you avoid disputes down the line.

Most commercial lease agreements will include a parties clause, which specifies the names of the landlord and the tenant. It may seem like you are stating the obvious, but it is important to ensure all of the information in this portion of the agreement is correct. In order to avoid being held personally responsible for the building under the lease, it is advisable that you use your business’ full legal name, rather than your personal name.

Breach of contract lawsuit settled against former Texas coach

Employment contracts in Texas, and elsewhere, often include clauses, which prevent workers from leaving their jobs and going to work for a competitor. Violating non-compete clauses may result in contract disputes. For the coaches of college and professional sports teams, however, this idea can be complicated, as they are regularly hired and fired between teams and seasons.

In 2014, Oklahoma State University reportedly filed a lawsuit for breach of contract against a former assistant coach. According to reports, the coach left his position with OSU to work for The University of Texas at Austin. OSU suggested that his move to Texas was not a promotion with play-calling duties. Rather, the university argued that the coach had made a lateral move, which was a breach of his contract. OSU reportedly sought close to $600,000 from the coach in the lawsuit.

What elements should you include in your partnership agreement?

As was discussed in a previous post, disputes sometimes arise between business partners in Texas, and elsewhere. Perhaps one of the easiest ways for you to prevent these types of issues from affecting your business is to establish a solid partnership agreement. In order to ensure that your business is able to withstand the inevitable ups and downs of your relationship, there are certain elements, which you should ensure are included in your partnership agreement.

In some cases, you and your partner will each hold equal shares of your business. In others, however, one of you might have more equity than the other. Thus, it is advisable for you to include the percentage of ownership in your partnership agreement. This may help ensure that everyone is on the same page, and will eliminate some disputes in the event you choose to part ways down the road.

How can severance agreements help avoid employment litigation?

As an employer in Texas, or elsewhere, you may deem it necessary at some point to terminate a worker’s employment. Depending on the circumstances, however, this may prove difficult, and could result in costly litigation. In order to avoid a drawn out legal dispute, you may consider using a severance agreement.

According to the U.S. Equal Employment Opportunity Commission, a severance agreement is a type of contract between you and your employee, which stipulates the terms of his or her termination. Essentially, these types of agreements are a type of release. The worker signs the contract, agreeing that he or she will not take legal action against you or your company. In exchange, you provide him or her certain benefits.

How can you defend against a breach of contract claim?

As we have discussed in a previous post, breach of contract occurs when you, or another party, breaks a contract, or fails to fulfil any of the contract’s terms. At The Jackson Law Firm, we are often asked what to do if you have been accused of violating a contract in Texas. In this post then, we will discuss how to defend against breach of contract claims.

In general, business contracts are legally binding documents, meaning you cannot just back out of them. Thus, you must typically have just cause for why you did not follow through with the terms of the contract. In such situations, there are a number of arguments, which the courts may accept as reasonable excuses.

An overview of mechanic’s liens in the state of Texas

In the state of Texas, subcontractors, suppliers and others may have legal claims against property that they helped remodel or improve. These claims, or mechanic’s liens, allow certain workers to come after people, and their property, if they are not paid for their services or goods. This may help ensure that subcontractors and suppliers are not taken advantage of by general contractors, and others.

Generally, mechanic’s liens are legal claims that may be placed against property that was developed, remodeled or improved. Under Texas state law, people may place these types of liens in the following situations:

  •          They specially fabricate materials, even if the material is not delivered
  •          They are architects, engineers or surveyors who prepare plans or plats
  •          They provide labor or supplies for the landscaping, building or improvement of a home
  •          They provide or perform labor or materials for the demolition of certain structures

How are business executives compensated in Texas?

Many workers in Texas, and elsewhere, are paid hourly wages, while others receive annual salaries. As an executive, however, your compensation may be structured differently. In order to make sure you are paid fairly, it is important for you to understand common executive compensation options. If you are not compensated appropriately, it could result in a contract dispute.

Often, executives such as yourself are paid a base salary. An annual figure, this may be paid bi-weekly or monthly, much like typical salaried workers. In general, this pay is not contingent on any other factors. Therefore, it is income that you can count on. According to a CNBC report, 37 percent of the income executives earned in 2014 was cash, or base pay.

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