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In the creation of any commercial contract, there are certain goals you want to accomplish. What is true in most all commercial contracts is that you want an agreement that is completely clear, and where your rights and obligations are unambiguously laid out in “black and white.” Even after you’ve done that, though, you may still have to fight to get the benefit of the bargain that you negotiated and signed. When that happens, be sure to reach out an experienced South Florida commercial litigation attorney about the specifics of your situation.

Why does having a clear and unmistakable agreement matter so much? One reason is that having a contract that is devoid of any vagueness or ambiguity may alter the landscape of your litigation in your favor should your contract partner sue you for breach. As an example, consider the case between a multinational hospitality corporation and an entity that provided corporate registered agent services along with document retrieval and delivery services.

Reportedly, the contract between the two sides said that either one could terminate the contract, with or without cause, without liability, and could do so at any point during the initial term or during any renewal term, as long the canceling party provided written notice within a certain timeframe. The contract’s initial duration was seven years.

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The unprecedented global cessation caused by the COVID-19 pandemic will have lasting effects on companies worldwide. COVID-19 and the government regulations to control the spread thereof have caused an increasing number of businesses to suspend operations and close down facilities, resulting in substantial losses. Any business owner with a commercial insurance policy that has suffered losses due to COVID-19 should have their policy reviewed immediately by an attorney to determine if they can recover their losses through business interruption insurance. Because insurance companies will attempt to deny claims due to the policy language or exclusions contained therein, it is critical for business owners to understand their policy rights, as well as current and future legal developments in the insurance sector relating to COVID-19, to ensure they are afforded the most protection possible.

I. Business Interruption Insurance and Litigation

Business interruption insurance covers business income that is lost or expenses incurred in the event of a stoppage in business operations due to a disaster, such as hurricanes, earthquakes, fire, or pandemics such as COVID-19. In many cases, business interruption insurance will also cover losses caused by government action, otherwise known as civil authority coverage. While each policy is different, business interruption insurance may cover lost profits, fixed costs, expenses associated with moving to a temporary business location, ingress/egress costs, employee wages, and loan payments, among other things. Each business’ coverage will be determined on a case by case basis, and therefore it is imperative that the policyholder understand their policy, including any time limitations or notice requirements thereunder required to trigger coverage.

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On February 19, 2020, the Small Business Reorganization Act (the “SBRA”) went into effect, shortly preceding the unprecedented blow to the global economy caused by the coronavirus (COVID-19) pandemic. The coronavirus, as well as government regulations to control the spread of the virus, have forced both public and private enterprises to discontinue operations, shut down facilities, and in some cases have caused companies to close their doors permanently. Thus, businesses, particularly small businesses, are now struggling and unable to pay their creditors, and will need to rely heavily on the SBRA or other alternatives to bankruptcy in order to survive in these uncertain times. This article will discuss in detail what the SBRA is and its benefits for small businesses, the related Coronavirus Aid, Relief, and Economic Security Act, as well as several alternatives to bankruptcy that could prove to be more affordable and efficient for small businesses.

I. What is the Small Business Reorganization Act?

The SBRA was signed into law on August 23, 2019 and was intended to simplify the Chapter 11 bankruptcy process and offer new methods for small businesses to successfully reorganize. Prior to the SBRA, the primary options for struggling small businesses filing bankruptcy were limited to either Chapter 7 or Chapter 11, both of which have their drawbacks. A Chapter 7 bankruptcy is less costly, but involves the debtor’s assets being liquidated by a trustee to pay creditors, rendering the business unable to survive and retain control of its operations. Conversely, a Chapter 11 bankruptcy permits the debtor to retain control of its operations and restructure its debts through a court-approved plan, but the extensive court oversight and stringent requirements associated therewith can be too expensive for small businesses.

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Recently, singer/actor Justin Timberlake made the celebrity gossip and entertainment news after he was spotted holding hands with his costar from his latest movie, fueling rumors that Timberlake was having an affair with the actress. Timberlake and his wife, according to the New York Daily News, have a prenuptial agreement that says that, if Timberlake cheats and the couple divorces, his infidelity would result in his wife receiving an extra $500,000 in the divorce settlement. That sum would be small compared to actor Michael Douglas, who would owe an extra $5 million if he cheated on wife Catherine Zeta-Jones and the pair divorced, according to the Daily News.

These types of provisions in prenuptial agreements, which are generally dubbed “lifestyle’ clauses, can address everything from sexual fidelity to a spouse’s weight to the frequency of sex…even down to how often the in-laws visit, and they are increasing in popularity. If you desire to learn more about the creation or the enforcement of your prenuptial agreement with a lifestyle clause, be sure to retain an experienced Florida prenuptial agreement attorney.

If you are in a position of high visibility in South Florida business and/or society, you probably have certain expectations of your partner… expectations you might desire to be placed in a prenuptial agreement. As a person of social and/or professional prominence, you might be concerned that a husband who notoriously cheats on you could damage your standing in society, and so desire a fidelity clause in your prenup. Alternately, you might be a high-powered business professional who’s concerned that a wife whose appearance goes from South Beach supermodel to obese could harm your business prospects by negatively impacting your professional “brand,” thereby making you interested in a weight (or similar appearance) clause in your prenup.

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Arbitration clauses can be very important parts of commercial contracts. As with any contract clause, one of the keys is understanding exactly what situations the clause covers and what situations it doesn’t. Florida law says that “no party may be forced to submit a dispute to arbitration that the party did not intend and agree to arbitrate.” In other words, there must be a clearly enforceable arbitration clause and it must clearly cover the dispute at issue, or else there is no right to seek compulsory arbitration. Without question, whether you are seeking to enforce an arbitration clause or seeking bypass it and proceed in court, it pays to have the skill and knowledge of an experienced South Florida commercial litigation attorney on your side.

A dispute over the construction of an apartment complex was a good example of how this analysis works. In late 2006, a Tennessee-based construction firm inked a deal to construct an apartment complex for seniors in Titusville. The agreement was spelled out across two documents – a primary contract and a supplemental conditions document.

Not happy with the construction work, the complex sued the construction firm for breach of contract. The construction firm asked the court to dismiss or stay the litigation action. According to the construction firm, the agreement called for alternative dispute resolution of claims like the one lodged by the complex. Specifically, the agreement required that the parties mediate and, if that failed, undergo arbitration of the claims.

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The ever-increasing threat of the coronavirus (COVID-19) pandemic has driven consumers into a frenzy over common sanitation and disinfecting products, in addition to gloves, masks, and other personal protective equipment. As a result, businesses that offer such products could see the increasing demand as an opportunity to augment their profit margins by charging higher prices. However, it is imperative that these businesses be fully informed of the consequences and liability that could result from this type of conduct, otherwise known as price gouging. Each state regulates price gouging differently, so businesses should be aware of the price gouging laws for each state in which they do business. This article will discuss in detail price gouging in the State of Florida.

On March 9, 2020, Florida Governor Ron DeSantis declared a state of emergency due to the spread of the coronavirus, triggering Florida’s Price Gouging Law, Section 501.160, Florida Statutes. According to Florida’s First District Court of Appeal, the Price Gouging Law was passed to prevent dramatic increases in the prices of certain essential commodities during certain periods of disaster. The Law prohibits unconscionable price increases, which it defines as a “gross disparity” between the average cost of the commodity 30 days prior to a declared state of emergency and the current price of the commodity. However, the Law exempts price increases attributable to “additional costs or regional, national or international market trends.” The essential commodities covered under Florida’s Price Gouging Law are constantly changing, so companies doing business in Florida must stay apprised of any modifications that could potentially affect their operations. At this time, the essential commodities covered under Florida’s Price Gouging Law are the following:

•Protective masks used to protect you from others if you are sick;

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The COVID-19 pandemic has affected almost all business sectors in South Florida. Commercial rental property is no exception. The shutdown of non-essential businesses in Miami-Dade and Broward Counties has left many commercial tenants severely restricted or completely unable to generate revenue. The current circumstances have also placed great financial pressures on commercial landlords, as well. For tenants and landlords facing major issues, there may be alternatives to eviction. These may include things like workouts or lease restructuring, among other possibilities. To discuss your options and what makes the most business sense for you, be sure you are working with an experienced South Florida commercial real estate attorney.

As reported, several South Florida commercial landlords are working with their tenants to keep those tenants out of the eviction process and in the spaces they currently occupy. Two South Florida-based landlords offered their tenants options including rent deferments, rent forbearances and partial rent payments, according to the report.

Landlords have several options if they have tenants impacted by COVID-19-related restrictions that are having difficulties paying rent. A landlord may declare a tenant in default and immediately begin pursuing legal action against the tenant and any guarantors, the landlord can declare a tenant in default but hold off on taking any enforcement action or the landlord can negotiate an amendment to the tenant’s lease.

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Chapter 11 bankruptcy can provide a debtor with much-needed protection from creditors. Sometimes, though, creditors don’t abide by the rules and instead step over the line. When that happens, you need to know what to do ensure that your business is afforded the protection that the bankruptcy law says it should have. As part of this process, you’ll want to be sure that you have a South Florida attorney experienced in Chapter 11 bankruptcy issues representing your business.

Once you have filed for Chapter 11 bankruptcy and gone through all of the required steps of that process, the court will enter an order releasing your business from the obligation of paying most of its pre-bankruptcy debts. This, of course, is called the discharge order. Once it’s entered, the creditors whose amounts were included in the discharge are forever foreclosed from collecting those debts.

A recent U.S. Supreme Court decision looks at the very important question of what happens when a creditor attempts to collect a debt that has already been discharged in bankruptcy. The case involved B.T., a part-owner of business in Oregon who filed Chapter 7 bankruptcy. At the time that B.T. filed, the business and some other owners were litigating a civil lawsuit filed against B.T.

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No business, neither big nor small, has proven to be immune to the rapidly increasing threat of the coronavirus (COVID-19) that has significantly disrupted commercial operations all over the globe. In response to this pandemic, public and private enterprises have implemented procedures to slow the spread of the coronavirus, including closing facilities and ceasing operations. As a result, businesses are now evaluating their options concerning performance of their contracts. Accordingly, it is critical for these businesses to be aware of the various defenses available to potentially excuse nonperformance of their contractual obligations in these uncertain times. One of these defenses is to invoke a force majeure clause contained in a contract.

A force majeure clause in Florida is a standard contractual clause that permits parties to allocate the risk of loss if performance becomes impossible or impracticable due to “force majeure events,” such as acts of God, hurricanes, earthquakes, epidemics, terrorism, government acts, labor strikes, and lock-outs, among other things. The Florida Supreme Court, in holding that a hurricane constituted and act of God excusing a party’s performance under a contract, defined such an act as follows:

An act of God, such as will excuse nonperformance of a legal contract, must be an act or occurrence so extraordinary and unprecedented that human foresight could not foresee or guard against it, and the effect of which could not be prevented or avoid by the exercise of reasonable prudence, diligence, and care or by the use of those means which the situation of the party renders it reasonable that he should employ.[1]

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A summary judgment can be an important tool and a huge benefit in your commercial litigation case. A summary judgment on liability, for example, means that the court can decide the issue of liability without even having to have a full trial on that. A summary judgment in your favor, if you’re the plaintiff, means that, in addition to your not having to worry about proving liability at trial, it also keeps out any affirmative defenses the other side had if those defenses only relate to the question of liability. To do that though, you need all of the right documentation and other evidence, along with all the proper arguments, which is why it helps to have a knowledgeable Florida landlord-tenant attorney handling your case.

A recent commercial lease dispute case was a good example. The tenant and its landlord had a five-year lease. Like many commercial lease agreements, this one included a guaranty. The guaranty said that the guarantor promised “the due prompt and punctual performance of all obligations of, and the prompt payment when due.”

Problems emerged, the landlord told the tenant to vacate the space and the tenant sued the landlord for illegal self-help because, allegedly, the landlord changed the locks on the space and refused the tenant entry unless it paid rent. The landlord countersued for breach of contract and for unpaid rent. The landlord’s countersuit also named the guarantor as a party.

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