Articles Posted in Commercial and Business

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Especially here in South Florida, businesses frequently find themselves doing business with entities based outside the United States. Whether your contractual partners are based in the USA or elsewhere, it is extremely important to make certain that the arbitration clause in your agreement is drafted with the utmost care. That’s because, whether you’re using Florida rules, federal rules or United Nations rules, if you’ve included provisions about how arbitration will occur (or if it is to occur at all,) the courts will generally follow what’s in that contract. This is another reminder of the profound importance of having a skilled and knowledgeable South Florida commercial contract attorney on your side as you negotiate and draft your commercial agreement, because even one seemingly small provision can have major consequences.

A recent CBD oil contract dispute from South Florida is a good example. The plaintiff was an El Salvador-based supplier of hemp-based biotechnology. The defendant was a Doral-based distributor of CBD oil products. The two entities had a distribution agreement whose arbitration clause indicated that “exclusive International Arbitration through JAMS International using UNCITRAL rules in New York.” The contract also specifically declared that a United Nations convention on International Sales of Goods did not apply.

Just four months after the two entities inked their distribution agreement, the supplier served a demand for arbitration on the distributor. Three years later, the dispute (which encompassed a mixture of contract and tort law claims) went before an arbitration panel, which found for the supplier, awarding $3.9 million in damages.

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There are many different situations in which you might need a good South Florida commercial litigation attorney. You might be a Florida corporation needing to sue for breach of contract. You might be a Delaware corporation needing to sue your commercial tenant for breaching a lease in South Florida. Or you might be an out-of-state construction subcontractor who needs to engage in arbitration in Florida or to file a Florida court action against an out-of-state contractor in order to obtain judicial confirmation of the arbitration award you just won. In any of those scenarios, having the right attorney is essential.

A recent case from Miami-Dade County is a good example. S.C., a Texas LLC headquartered in San Marcos, signed several contracts to perform construction services for a utility. The Texas LLC hired a South Dakota corporation to serve as a subcontractor on the project. The South Dakota corporation brought in a Utah-based corporation to serve as its partner. The rights and obligations of each of the three entities were governed by a “Master Agreement for Contract Services.”

The contractor allegedly fell behind in paying invoices that the subcontractor and its partner submitted, so, in accordance with the protocol dictated in the agreement, the subcontractor and its partner filed for arbitration.

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Certainly, the outcome no one who’s been harmed by a breached agreement wants to contemplate is taking your breach of contract case to a judgment on the merits… and losing. However, with the help of a skilled South Florida commercial litigation attorney, your situation, even after a loss on the merits, may still be far from hopeless. Generally, the rules of the law say that there are many things you cannot re-litigate, but the law doesn’t block a subsequent case against the same opponent based on a different breach. The key is to develop the necessary facts to demonstrate that the breach you alleged the second time is distinct from the one that formed the basis of your first case.

An Orlando-area dispute is a good example. Upon learning that a local laundromat was for sale, a potential buyer contacted the seller’s broker about a possible deal. During meetings, the seller represented that “the washers and dryers in the laundromat were fully operational and would remain so for years to come; that the business was debt free and netted a healthy monthly profit; [and] that the laundromat had several large commercial accounts, which would remain with the business after the sale.”

After the sale, the buyer allegedly discovered that the assurances made by the broker and the seller were full of misrepresentations and deceptions. Additionally, the sellers knew the representations were untrue, according to the complaint.

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The Merriam-Webster dictionary defines “at cross-purposes” as an idiom that means “in a way that causes confusion or failure because people are working or talking with different goals or purposes.” This problem of talking or working at cross-purposes occurs in all walks of life, including business. The potential for two sides, whether intentionally or unintentionally, to become at cross-purposes with one another – often without even realizing it – is another example of why meticulous drafting and the right legal counsel matter so much in the commercial contracting process. Whether you’re consummating a new business or working out a mediation agreement, your skilled South Florida commercial contract attorney can help you make sure you get a final agreement that is clear and unambiguous, and that you rectify any problems created by confusion or talking at cross-purposes.

The importance of having an agreement that was drafted in sufficient detail so as to avoid confusion and ambiguity was on display in a recent case in South Florida. A Miami-based motor club signed a servicer’s agreement with a Coconut Grove-based marketing entity. The arrangement called for the motor club to provide roadside assistance services to truckers and trucking companies, and for the marketer to sell those services as membership plans.

A dispute arose over certain fees that, according to the motor club, the marketer had retained wrongfully. After mediation, the two sides worked out (and signed) an agreement. That document said in Paragraph 1a that the motor club was entitled to receive a sum of $350,000 from the marketer. Later on, the document stated that the motor club was to receive “the Settlement Sum and the amount referenced in paragraph 1a above.”

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In any commercial litigation matter, there are at least two sides. For the purposes of this discussion, those sides are not “plaintiff” and “defendant.” They are: (1) the side who initially might appear to have the “upper hand” and (2) the side who initially appears potentially to have the relatively weaker case. Obviously, everyone prefers to be in category #1. However, even if you find yourself in group #2, that is not cause for simply giving up. Success — either partial or complete — is still possibly within reach, and it starts by keeping your case alive. In other words, it starts with securing representation from an experienced South Florida commercial litigation attorney and developing a case that is strong enough to survive a motion to dismiss or a motion for summary judgment.

A good example of this is a South Florida dispute around a broker contract. In 2016, the owner of a Fort Lauderdale nightclub negotiated a contract with a business broker to facilitate the sale of the nightclub. The broker received back a contract with a signature that bore the name of the principal owner, L.A., followed by “MGRM,” indicating the owner was signing as managing member of the nightclub’s LLC and in his individual capacity as a guarantor.

Several months later, the broker learned that the club owner planned to close the business and re-open it under new ownership, so the broker demanded payment of its commission. The demand was refused, and the broker sued. If that the contract had a clear provision that stated that a decision by the client to close the business and re-open it under new ownership triggered an obligation to pay the broker its commission, then those facts might potentially seem to give the broker a clear advantage.

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There are many things your business may have to address, and knowing how to respond effectively is essential. One of these may be facing a lawsuit in some far-away jurisdiction where you don’t operate. What you definitely should not do is simply ignore the case. If you find yourself as the defendant in a commercial litigation action in Florida when you have no contacts with Florida, you need to contact a knowledgeable Florida attorney. Your skilled South Florida commercial litigation attorney can go to court for you for the express limited purpose of getting that lawsuit dismissed for lack of jurisdiction. That way, you will not be in peril of a potentially damaging judgment that could result if you made the mistake of just ignoring the lawsuit.

A recent case from the Tampa Bay area is good example of a proper response. The case involved two companies engaged in a tortious interference action. The plaintiff’s case asserted that the defendant induced an engineer to leave his job with the plaintiff to take a managerial position within the defendant’s Virginia office.

The plaintiff was a Florida corporation headquartered in St. Petersburg and the plaintiff sued in state court in Pinellas County. The defendant, however, was a California corporation based in San Diego, and did not want to face a trial in Florida. The California company retained local counsel and asked the court to dismiss the plaintiff’s case. This was a wise move.

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The seeds of success – or failure – in your Florida commercial litigation action are often sown long before either side calls a single witness or makes a single argument or statement at trial. Getting the evidence you need to obtain a favorable judgment often relies on doing the right discovery during the pre-trial process. That means not only identifying what you need, but also knowing how to go about getting it and the defeating of the other side’s arguments that you’re not entitled to that information. This requires an in-depth knowledge of your case, the law and the rules of procedure. To make sure you have that on your side, you need an experienced South Florida commercial litigation attorney.

A recent case from the Tampa Bay area is a good example of these processes in action. The underlying lawsuit revolved around data that was generated by a footwear sanitation device. A Largo-based doctor approached the St. Petersburg-based entity that collected the data about purchasing the rights to it. The sides signed a letter of intent and proceeded. Three years later, the relationship broke down and litigation ensued.

The doctor, at one point during the pre-trial discovery process, sought to take 18 new depositions and to complete three additional ones that had been continued. The doctor’s side stated that the numerous depositions were needed to establish essential elements of the case, including that an enforceable agreement had been established between the sides. They also argued that they needed the depositions to secure evidence about what the parties’ course of dealings was.

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If you find yourself embroiled in a commercial contract dispute, it helps to understand how the courts will go about interpreting your agreement. The law has created certain rules that set the standard for how judges should interpret contracts. For example, if an agreement provision mentions some, but not all members of particular class or group of items, then the law says that courts should interpret that language as carrying with it the definitive implication that those class or group items not included were intentionally excluded. For more about this and other rules of contract interpretation and how they may benefit you in your breach of contract or wrongful termination lawsuit, be sure you have retained an experienced Florida business litigation attorney to represent your interests.

A recent case from Miami-Dade County was a real-life illustration of this principle. The origin of the case was a multi-million-dollar contract where the Miami-Dade County Expressway Authority (MDX) retained a Dallas-area consultant to provide a toll-by-plate system for the county’s toll roads. The authority made many assertions regarding the failing project, including accusing the contractor of intentionally underbidding the project and lying about its ability to do the job.

The contractor, however, believed that MDX was the party engaging in misconduct and sued. The contractor alleged that the authority breached the contract. The authority subsequently terminated the contract, leading the contractor to add a claim for wrongful termination onto its already pending lawsuit.

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A Broward County business that was a party to a commercial lease agreement found out the hard way recently one of the many ways that such an agreement can go wrong and leave you with no recourse in the courts. That problem, in the Broward business’s situation, was an imperfectly drafted lease agreement. Don’t let that pitfall ensnare you. Be sure that the commercial lease agreement you sign will protect your business interests fully and be recognized as enforceable by the courts. To be sure you are executing the right commercial lease agreement, start by retaining the services of a skilled South Florida commercial lease attorney.

Z.C. was the owner of that Broward County business, which rented wave runners, parasails and scuba diving equipment. In 2007, the rental business inked a lease with a hotel’s owner that allowed the business to operate on a beach adjacent to the hotel. The lease agreement stated that the term of the lease was from September 18, 2007 until “the demolition of the property.” The parties worded the contract that way because the owner allegedly desired to allow the equipment rental business to stay as long as he operated a hotel there. (The owner allegedly was considering demolishing the hotel and converting the property into condominiums and, if that happened, then the equipment rental business would be expected to leave.)

Three years after the parties signed the lease, the owner sold the property rather than converting it into condos. Several months after the transaction, the new owner and operator of the hotel terminated the lease. The rental business sued the new hotel owner for breaching the lease, but the hotel owner emerged successful from the lawsuit.

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More than four decades ago, country singer Kenny Rogers achieved massive success with a song called “The Gambler.” The song gives the listener several tidbits about playing cards (and presumably about life,) including the value of not overplaying one’s hand. The benefit of refraining from overplaying one’s position is something that can be realized in a variety of settings, including in creating your commercial contract. Even when it seems like you have the “upper hand,” going too far has the potential to cause catastrophic results. To make sure you get a commercial contract that balances your positional strengths with proper restraint to avoid court intervention or other problems, be sure you have the skills of an experienced Florida business attorney on your side.

As an example, there’s this federal case recently before the Eleventh Circuit Court of Appeals. The parties were a Brazilian travel agency that specialized in cruises and cruise packages and a Florida company the travel agency hired to design a website. That “one-of-a-kind” website would allow users to book in Portuguese and pay in Brazilian currency.

What made these parties’ contract noteworthy was the exculpatory clause that the Boca Raton-based entity negotiated. The clause that was included in the final agreement stated that “for any direct, special, indirect, incidental, consequential, punitive, exemplary or any other damages regardless of kind or type (whether in contract, tort (including negligence), or otherwise), including but not limited to loss of profits, data, or goodwill.” The clause also said that the company would not be liable even if it “knew or should have known of the possibility of such damages.”

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