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4 lawsuits that may catch your small business off guard

Growing a small business is often an effective way to realize financial freedom. Further, if you have a brilliant idea, in-demand product or necessary service, your small business probably plays and important role in the community. Still, a lawsuit may bring your organization to a standstill. 

According to some estimates, more than 50% of small businesses are parties to litigation at any given time. Therefore, even if your company has managed to stay out of court until now, you probably cannot avoid a lawsuit forever. Here are four types of litigation that may sneak up on both you and your business.

The pros and cons of non-compete agreements

When considering new opportunities in Texas, pay close attention to non-compete agreements. Non-compete agreements have traditionally been enforceable in Texas that fairly restrict the ability to work in a specific industry, in a specific location, for a specific period of time. However, the key word here is "fairly," so non-compete agreements that are too broad in their definition of the nature of the work, are too far-reaching in their geographical coverage, or are restrictive for too long a time period will not be enforceable.

Whether you are looking to start a new role or you are looking to bring someone else into a new role, you want to be sure you understand the terms so you will know exactly how enforceable the non-compete is.

The basics of easements

If you are looking for a new home to buy in Texas, there will be many things you should evaluate before you make a final decision to purchase a specific property. Factors like the condition and age of key systems such as heating, cooling and electrical will be important to asses. The age and condition of the roof is also a major factor when buying a home. In addition, you will want to fully understand the property lines around your home and what other parties might have access to some part of your property.

An easement is something that grants another party access to a piece of your property for a specific reason. As explained by Zillow, it is common for utility companies to be granted easement access to perform maintenance or checks on your service. It is also common for a particular easement to allow the general public the ability to pass through your property to some other public space, such as a park or a lake. Some easements give a neighbor the ability to use your driveway, for example, to access their property.

What is a limited liability partnership?

When you start a business in Texas, you have many options as to its structure. Even once you decide on a partnership between you and one or more other individuals, you still have a variety of options available. The most common options are a general partnership and a limited partnership, each of which has its own advantages and disadvantages. According to FindLaw, however, you also have a third option, the limited liability partnership, which combines some of the advantages of each of the two other types of partnerships. 

One of the major advantages of an LLP is that if you already have an existing partnership, you do not need to modify the partnership agreement already in place. Once you have identified the appropriate state agency, all you have to do is to register as an LLP by submitting your application. The application requirements vary somewhat by state, but at the very least, you will have to disclose your place of business and each of the partners' names. 

Reviewing home purchasing contingencies

There is no denying that the process of purchasing a new home in Dallas is an exciting one. Such excitement may prompt you to want to rush into putting a property that you think is your dream home under contract with the hopes of completing your purchase as soon as possible. Yet many clients have come to us here at Palmer & Manual PLLC in your same position without first thinking about what protections they may want to place in their purchasing contracts to help keep them from making a potentially port decision. Such additional thought need not deter you from pursuing a property, but rather ensure that you are getting what you think you are paying for. 

Whenever you (as a potential buyer) put a home under contract, you will want to ensure that certain contingencies are put into the purchasing agreement to help protect your down payment. Such contingencies are meant to allow you to back out of a contract (with your down payment) if information surfaces that causes you to question your decision to buy the home. Per, two of the more common contingencies meant to protect you as a buyer include home inspection and appraisal contingencies. If the home does not appraise for the value the seller is asking for, or if issues with the home’s structural integrity arise during an inspection, these contingencies would essentially void your contract. 

Benefits of writing up a partnership agreement

Forming a business as a partnership is exciting. But even if you run the business with a best friend, close family member or trustworthy colleague, you never know when things can go sour. A partnership dispute can cause your business to falter, especially if you do not have a strong agreement in place. 

Writing up a partnership agreement can give you the tools necessary to avoid and resolve arguments. Here are the main advantages of putting this document in writing. 

Forming a Business Partnership

Forming a business as a partnership is exciting. But even if you run the business with a best friend, close family member or trustworthy colleague, you never know when things can go sour. A partnership dispute can cause your business to falter, especially if you do not have a strong agreement in place. In our experience, typically a successful business produce more disputes than a struggling business. With a division of responsibilities, there will be natural differences in expense reimbursement, re-investment goals, and even procedural policies. These disagreements may seem small, but add up over time and can fracture even the strongest relationships.

Writing the general and specific elements of the partnership agreement can give you the tools necessary to avoid and resolve arguments. Here are the main advantages of putting this document in writing.

Communication guidelines under the FDCPA

The word "harassment" is often thrown around quite liberally when it comes to debt collections. Many in Dallas may understand that they legitimately owe on their debts; they just do not like to be reminded of it. You (as a business owner) have every right to collect what is owed to you; at the same time, you do not want your reputation damaged by those who you have to pursue for outstanding debts. A question that is often posed to us here at Palmer & Manuel PLLCB by clients in your same position is what does the law dictate when it comes to communicating with those that owe your company money? 

To adequately answer that question, you must be familiar with the Fair Debt Collection Practices Act. This is a federal law that serves to not only protect consumers' (debtors') rights, but also guide the collection efforts for creditors. While many may view any contact made by creditors as harassment, according to the FDCPA, your debtors can indeed be contacted in regard to their liabilities within reasonable hours and through the proper channels. According to the Federal Trade Commission, "reasonable hours" means anytime between 8:00 am and 9:00 pm, and "proper channels" is typically limited to a debtor's personal phone number (your debtor cannot be contacted at their place of business unless they have given permission to do so). 

How should I select a business partner?

If you are like many entrepreneurs in Texas, you might consider partnering with another person to help get a new venture off the ground. The reasons people enter into partnerships vary and may include increased access to capital, specific industry or market expertise, expanded production capabilities and more. While a partnership may have many positive benefits, it should not be something rushed into.

As recommended by Entrepreneur magazine, business people should carefully evaluate potential partners and partnership agreements before making any final decision or signing a contract. If two people have never worked together before, it might be wise to establish some sort of trial period in which the two can test out their ability to work together and make joint decisions. It will be important for each party to truly understand each other's style to assess compatibility.

Putting a home under contract

With all of the excitement that comes with searching for a new home in Dallas, one might start to wonder people say buying a home is such a stressful process. Finding a home certainly can be fun; actually buying it can be a different story. Many think that the hardest part of the entire process is putting an offer in and having it accepted. Oftentimes, however, it is at that very point when the stress truly sets in. 

When one has a home under contract, they typically view the house as being as good as theirs. While they are one step closer to making that a reality, much can still happen to derail the sale. Typically, however, any actions that nullify the proposed sale of a home will not come from the seller. According to, while a seller can continue to receive offers on a home while it is under contract, they cannot reject the current contract for a better offer. If they do attempt to back out of the sale (without having good cause to do so), the buyer can take them to court to either force the sale via a court order or sue for breach of contract. 

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