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Daytona Beach, Florida
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The Daytona Law Blog

Should you arbitrate a business dispute?

Disputes between business partners can tear a Florida company apart, which is why many businesses build ways to resolve conflicts into their contracts. Some companies employ mediation or civil litigation, but arbitration is commonly used to handle many disputes. Arbitration mimics a civil trial in that the disputing parties make their case before a person who looks at the evidence and renders a judgment. Arbitration, like any form of resolution, has its benefits and drawbacks which should be carefully considered before going forward with it.

Per Chron.com, companies typically like to use arbitration because it costs less than civil litigation, takes less time, and is more private. Going to arbitration means that details about the case that could be embarrassing if made public will be kept confidential in the arbitration process. Also, sometimes corporate or technical matters may be so detailed and sophisticated that the company prefers a specialist to arbitrate as opposed to a judge who might not be familiar with the concepts involved.

Buyout agreements: What are they and why do you need one?

If you plan to start a business in Florida, or if you already own and operate one, you may benefit from a sound buyout agreement. A buyout agreement, also known as a buy-sell agreement, is an agreement between the owners of a business that details what will become of an owner's share of the business should he or she choose to back out for any reason. The agreement also goes into effect when certain triggering events such as death, disability or conflict occur. FitSmallBusiness.com explains why you need a buy-sell agreement and what elements to include in yours. 

The sole purpose of a buyout agreement is to offer you guidance in the event that an unforeseeable happening occurs. Though you should maintain a positive attitude about your business partnership, plan for the worst. Unfortunately, life is full of curve balls, many of which have the potential to derail even your best of intentions. Some events that may occur during your time as a business owner include the following:

  •       A partner may divorce and part of his or her share may end up in the hands of an angry ex-spouse.
  •       You or a partner may pass away and, as survivors contest their rights to a share of the business, the business could die in probate.
  •       If you decide to exit without a buy-sell agreement, you or your heirs may not receive fair compensation for your portion of the company.
  •       If you or a partner have to find a buyer for a share of the business on short notice, you may not receive market value.

What is a trademark infringement

If you are like many business owners or executives in Florida, you know that your intellectual property should be carefully protected. Similarly, you know that avoiding an issue with another company's intellectual property can be important. In monitoring these things, it is good for you to understand the world of trademark infringements as trademarks may be among the types of intellectual property commonly involved in disputes.

As explained by the United States Patent and Trademark Office, the responsibility for enforcing any trademark rests squarely on the shoulders of the entity that holds the trademark. If that company does not enforce their marks, nobody else will. An allegation of infringement generally includes the assertion that another party is using the mark without approval and in a manner that is likely to cause confusion in the marketplace. This confusion, it should be noted, does not have to be intentional.

US companies face threat to intellectual property from China

In Florida, new businesses are started every day. While business owners are often focused on the basics of running the business, there are much more complicated matters that will eventually come up. One of these is the reality of protecting intellectual property. According to the The Heartland Institute, the United States is ranked number one in intellectual property protection among the 50 largest economies in the world, but China still remains a large problem.

The ranking is based on things such as copyright, trademark, patent, trade secrets protection and around 40 indicators that are vital to innovation. In the United States alone, industries heavy in intellectual property supply up to 45 million jobs and contribute up to $6 trillion to the United States GDP.

Understanding contract consideration

Your business partnerships in Daytona Beach are much more clearly defined when you have a contract in place. Yet as many of the companies that we here at Smith Bigman Brock have worked with in the past can attest to, simply having a written contract does not mean that such an agreement is valid (and, by extension, enforceable). It is the language and terms within a contract that confirms its validity. 

One of the basic elements that must be present in order for an agreement to be considered a contract is consideration. The Florida Bar defines "consideration" as "the exchange of promises to act and/or provide goods, services or money." Essentially, your contract consideration is the mutual benefits both you and your partner will receive from the agreement. For example, if you are a service provider, then the benefit your partner receives is your services. Your benefit is the payment for those services (or other services received in return). A contract cannot be "one-sided," or have benefits so heavily offered to one party of the agreement in order to be considered valid. 

Copyright protections and the need for clarity

Business people in Florida across a variety of industries may find themselves without a clear understanding of copyrights. This type of protection is one of many forms of intellectual property and may also be one that has the potential for unintentional violations by individuals or companies.

As explained by the United States Patent and Trademark Office, virtually any type of creative work may be covered by copyright. This includes those works developed purely for artistic exploration or enjoyment as well as things created for commercial purposes. One example of a purely artistic work is a painting. Two examples of works created for commercial purposes are a company logo or website.

When do I need a nondisclosure agreement?

If you work for a company in Florida and need to hire an outside vendor to perform some work for your company, you may well need to share sensitive business or industry information with that vendor in order for them to do the work you want them to do. Certainly, this sounds a bit concerning as the information you would share must be kept in confidence and not used incorrectly. This is what a nondisclosure agreement is for.

Sharing information with a vendor is just one of the many situations in which the use of an NDA, also referred to as a confidentiality agreement, is important. As explained by Forbes, you may even find it helpful to have your employees sign NDAs to protect the business while still giving employees access to the data they need to do their jobs. If you have developed a new product, service or technology and want to discuss this with a potential partner or buyer, you should again enlist the protections allowed by a confidentiality agreement.

Understanding an unfair competitive advantage

Most any business in Florida has some sort of competition and that makes it understandable that owners and management teams spend a good deal of energy on finding ways for their companies to outdo their competitors. This is part and parcel of a capitalist society and economy. However, there is a line between what is a reasonable and legal competitive advantage and what is an unreasonable and illegal competitive advantage.

As explained by Quora, a competitive advantage can generally be thought of as anything that allows one company to provide better value to its customers or clients than its competitors. This better value may come in the form of superior product quality, a more pleasing price, faster turnaround and service times or something else.

Tips on creating a business partnership

Many people in Florida have dreams of owning their own businesses. In some cases, this may be achieved by working with another person and establishing a partnership. However, it is important that entrepreneurs proceed with caution before signing up to partner with another person as there may be serious legal and financial ramifications if a partnership does not work out as intended or hoped. 

According to Inc. magazine, there are some things that partners should have in common and some things they should not. Values, a work ethic and expectations for the business and each other should be shared for maximum synergy between partners. Skills, knowledge and even industry contacts may be best if not shared so that each person can bring something unique to the business and provide strength in different areas.

Detailing the Deceptive and Unfair Trade Practices Act

Most in Daytona Beach may anticipate that the business world will be cutthroat and competitive. Yet simply because you and your company are in a state of constant competition with your competitors does not mean that you (and them) are not required to follow ethical practice guidelines. Some might hear the term "unfair competition" and roll their eyes, believing it to only be an accusation made by companies that are falling behind in their markets. Yet several business representatives often come to us here at Smith Bigman Brock asking for specific examples of unfair competitive practices. 

Finding an answer to such a question requires a knowledge of Florida's Deceptive and Unfair Trade Practices Act. Here, it adopts the same standards set forth by the Federal Trade Commission Act. This legislation defines unfair trade practices to be: 

  • Any that harm (or are likely to harm) consumers
  • Any that cannot be reasonably avoided by consumers
  • Any whose benefits are not outweighed by the countervailing benefits to both consumers and competitors

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