Understanding Construction Disputes

For businesses and individuals entering into agreements with any risk of the other party failing to adhere to its obligations - perhaps all contracts - it can be more important than possibly ever to include well-drafted arbitration provisions. In other words, if you should already have an arbitration clause in your contract, we recommend to make sure it is in there, now. The state of the State Court backlog in Illinois and many jurisdictions nationwide is perhaps the largest in decades. Since many states have reopened from the COVID-19 shutdowns of 2020, we are only now seeing the actual rescheduling dates of many cases. In Cook County for example, Illinois' largest county court system, cases are proceeding on a case-by-case basis, with some case status hearings being held now by video conference, but others being rescheduled to the fall of 2020 or even as late as February of 2021. This means if you are a Plaintiff attempting to recover a debt, compensate for damages or achieve specific performance, you will need to take your place in this increasingly long line. However, there is a solution that predates the COVID-19 outbreak. Arbitration firms have been offering alternative dispute resolution by phone or video conference for some time. Mediation and arbitration have continued at a faster pace than their State Court alternatives. Currently as of July of 2020 plaintiffs have been achieving outcomes in mediation and arbitration in a time where it would be impossible to obtain a similar judgment in State Courts. As many of you know, federal law mandates that arbitration awards may be enforced in Court, and in a rather more efficient way than filing the entire case in Court. Executed settlements from mediation, properly drafted, are also typically upheld by courts of competent jurisdiction. Be careful however to properly draft and insert mediation and arbitration provisions into contracts. Failing to specify certain conditions or process can invalidate the arbitration provisions. For example, in Illinois a business or individual engaging in residential home repair and remodeling must allow for a home owner to specifically acknowledge and agree to the arbitration provision in writing, not just in the final signature line for the contract, along with other requirements. Finally, it is important to note that arbitration provisions may not be optimal for every contract or dispute.

If you are in need of a business attorney, you want to be certain that you hire the right one to handle your case. Since most attorneys will provide a free consultation, giving you the chance to determine if he or she is the proper fit, it is crucial to prepare for this meeting. Going into this meeting without the right preparation will not be helpful, so make the most of this opportunity by considering some of the following tips: Finding the right one: Before you even schedule a consultation, you need to find an attorney who seems like the right fit for you. Look for a law firm that focuses on your type of legal questions, or a firm that lists your type of case as an area of practice they frequently handle. If you have used an attorney in the past for a different issue, you can even consider asking for a referral. Learn some background knowledge: During your consultation, one of your most important questions will be in regards to the attorney’s background. Remember, this consultation is like a job interview, except you are the one doing the hiring. This is a person whose services you are going to pay for and you deserve to have someone who has the expertise necessary to assist you. Ask how long the attorney has been practicing law and if he or she has practiced in your county or area. How many cases like yours has he or she handled? These are important questions to ask. The legal plan: Another critical question is in regards to the strategy the attorney would use for your case and what outcome he or she expects. No one can foretell the future, but an experienced attorney will be able to provide a general idea of how long your case should take. It is crucial for your attorney’s strategies to align with your needs. Money matters: Oftentimes, a deciding factor in whether or not you choose to hire an attorney is the question of affordability. During your consultation, ask about legal fees. If different individuals are working on your case, they might all bill different rates, so you need to find out what they are. While your consultation will allow you to figure out if an attorney is right for you, it is usually not the time to ask in-depth legal questions, so make sure you focus this meeting on choosing the best attorney for your case. Business Attorneys in Chicago If you own a business, having skilled legal counsel is imperative for dealing with issues that might arise. At Rifkind Patrick LLC, our Chicago business attorneys have the skill and experience to assist you in navigating your legal concerns. Contact us today at (312) 313-0234 to schedule a free case evaluation!

Have you decided to close one of your businesses? If so, perhaps the business has not been profitable. Perhaps you want to move on to something else, or perhaps you want to move to another state. Whatever your reason for shutting down operations, there are legal steps that you will need to take before your business can be fully dissolved. When you take the proper steps, you can shield yourself from future legal issues. Winding down a business properly can protect your credit, reputation, and help reduce or prevent litigation regarding the dissolution of a company. This is very important if you plan on starting or running other businesses down the road. The following are just some of the steps you will need to take to close down your business: If you are in a partnership, LLC, or have a corporation, you must have your business associates’ agreement to dissolve the company (or the majority of the owners must agree to close the business). Pay your business’s debts and taxes Notify your employees, vendors, creditors, and customers Cancel any licenses or permits Cancel any applicable fictitious business names Ensure the business is dissolved with the local and state government agencies File final employment tax returns (if you have employees) Report sales of business assets to the IRS Report any exchange or sale of property used in your business to the IRS Report your company’s capital gains or losses File IRS Form 966, Corporate Dissolution or Liquidation File IRS Form 8594, Asset Acquisition Statement Paying Business Debts More than likely, you are going to have numerous business debts, such as money owed to suppliers, the landlord, vendors, utilities, credit card companies, marketing companies, banks, etc. When you notify your creditors that the business is closing, arrange to pay off or settle all of the business debts actually owed. If a creditor agrees to accept less than you owe, be sure to obtain a letter from the creditor stating that the debt is paid in full. If you are dissolving your business in Illinois or Wisconsin, you should speak directly with a business law attorney from Rifkind Patrick LLC, especially if you don’t have the capital to pay all of your bills. It is important that you know your options so you can minimize any risk to your personal assets. Contact Rifkind Patrick LLC today to learn more about business dissolution!

Are you considering having your employees sign a non-compete agreement? If so, you will need to familiarize yourself with the Illinois Freedom to Work Act, signed into law by Governor Bruce Rauner in 2016. The law was created to discourage and prohibit the misuse and abuse of non-compete agreements for low-wage employees. A low wage employee is, “an employee who earns the greater of (1) the hourly rate equal to the minimum wage required by the applicable federal, State, or local minimum wage law or (2) $13.00 per hour,” according to the Act. The Act does not apply to non-compete agreements entered into prior to the law’s effective date, which was January 1, 2017. Instead, it applies to all non-compete agreements entered into after the effective date. Who is Affected by the Act? While the Act is relatively brief, it is having a significant impact on private sector employers who were in the practice of having all employees, regardless of wage, sign non-compete agreements. Under Section 10 of the Act, private sector employers are expressly prohibited from having their low-wage employees enter into non-compete agreements. Section 10(b) of the Act states, “A covenant not to compete entered into between an employer and a low-wage employee is illegal and void.” Under the Act, a covenant not to compete refers to any agreement between an employer and a low-wage employee that bars the low-wage employee from: Performing work for a different employer for a certain time period, Working within a specific geographical area, and Accepting a job with another employer, performing work that is similar to the low-wage employee’s work for their current employer. However, the Act does not expressly affect employer non-solicitation agreements on employees who make $13.00 an hour or less. Further, the Act does not affect confidentiality or non-disclosure agreements between employers and employees. Only non-compete agreements signed after January 1, 2017 are within the Act’s scope. If you are looking to have your employees enter into a non-compete agreement, consider having a Chicago business law attorney from Rifkind Patrick LLC review your situation and determine if a non-compete agreement is necessary to protect your company and its interests. If you have questions or concerns about non-compete agreements in Illinois and Wisconsin, contact our firm to speak with a knowledgeable lawyer right away.

Do you know the most important part of a commercial real estate transaction? It is the “contract of purchase and sale,” which many attest is the road map of the real estate transaction. If a contract is properly negotiated and focused on eliminating any ambiguities, most problems will be avoided and the parties can move towards closing. A contract can be: Bilateral, where both parties are bound to contract conditions, or Unilateral, where only one party is expected to perform under the contract.  Generally, a contract of purchase and sale involves the following elements: letters of intent, bilateral contract requirements, the offer, acceptance, and consideration (without a consideration passing between the parties, it is not binding), such as a promise for a promise, etc. Premises Considerations In a commercial real estate transaction, the property should be well-described in the contract itself, and the contract should contain a legal description of the property. When entering a commercial real estate contract, one should ask: Are there any ingress or egress? This refers to the right to enter, leave, and return to a property. Are parking easements required? Will any furniture or equipment be included? Will overhead cranes be included? (warehouses) Will any movable loading docks be included? (warehouses) Often, the seller will put a provision in the contract that the property is being sold “as is.” This means the seller is not stating that the property is any particular condition. However, selling a property “as is” will not protect a seller against fraudulent concealment of fact, or fraudulent misrepresentations. In order for buyers to protect themselves, they should allow 10 days from signing (or longer) to inspect the property, or to have engineer inspect it for them. Usually, it is the engineer’s job to check the structural soundness of the property and any improvements that were made. In Conclusion When it comes to a commercial real estate transaction, it is important to cover all of your bases, and it all starts with a well-executed contract of purchase and sale. If you are looking for a Chicago real estate lawyer to assist you in this endeavor, contact Rifkind Patrick LLC today. With over 40 years of collective experience, we are qualified to represent you.

You have decided to start a business – congratulations! Before you apply for that SBA loan, or tap into your 401(k) for funding, you want to break down the startup process into manageable steps, so you can begin your entrepreneurial journey with ease and confidence. If your to-do-list is daunting, do not let it discourage you. Being your own boss can be very rewarding, it is just a matter of organization and systematic execution. As business law attorneys, we help startups launch their new ventures every day. If you are feeling overwhelmed by the number of tasks that lay ahead, here is a startup checklist that will help you prioritize, so you can tackle the primary issues first and address the secondary tasks at a future date. Get your family’s support. When going into business for yourself, it is important to have your family’s support. If you are single, this is not an issue, but if you are married, it will be a lot easier to build a business if you have your spouse’s support. If your startup requires you to move and you have a spouse and older children, it will be a lot easier if their goals align with yours. Create a detailed business plan. A solid business plan is a blueprint for your business. If you are planning on getting a loan, a business plan will be required of you. Even though your business plan will be a road map for at least the next two years, you will need to revisit it regularly to make adjustments and amendments as needed. Figure out the funding. Are you creating a lean startup, or will you need tens of thousands, if not hundreds of thousands to get your business off the ground? Will you be looking for investors? In any case, you have to figure out the funding. Often, new business owners fund their businesses through investors, SBA loans, and Rollovers for Business Startups, otherwise known as ROBS. If you need to find financing, it is best to start looking sooner than later. Decide on a business name. You will need to do research once you decide on a business name. You want to make sure that someone else is not already using it; you can find out by searching the name on Google and by using a corporate search name tool to ensure the name you came up with is not already being used by someone else. Be sure to check the proposed business name on the state and federal level. Select a legal structure. How you structure your business is critical; certain structures, such as the LLC, shield your personal assets, while others do not. We recommend discussing the different legal structures with a business law attorney. Apply for the required business licenses. Depending on your industry, you may need more than one business license. You will discover that most business licenses are handled locally and on the state level. Obtain an Employer Identification Number (EIN). You will need an Employer Identification Number (EIN) so you can avoid having to give out your Social Security number, so you can be separated from the business, and so you can open a business bank account. Create a website. These days, virtually all businesses need a website so they can establish an online presence, be found on Google, and so they can be credible. We suggest creating a website sooner than later, even if you have not launched the business yet. We are only scratching the surface in regards to what needs to be done to launch a startup. If you are taking the leap into entrepreneurship, you will benefit by speaking with a Chicago business law attorney from our firm. Contact us today to schedule a free 30-minute consultation with an experienced member of our legal team.

The National Academy of Jurisprudence (NAJ) has recently recognized Aaron E. Rifkind as one of 100 premier trial attorneys in the state of Illinois. This is a distinction reserved for attorneys who have established themselves through their professionalism and excellence in service. Membership into NAJ’s Premier 100 requires the satisfaction of stringent criteria and standards as established by the NAJ’s Board of Directors. Less than 1% of the 1.2 million attorneys currently practicing in the U.S. will be selected to receive this important and prestigious designation. Criteria for membership may include, but is not limited to, the following: An individual attorney’s commitment to ethics and professionalism Notable verdicts, achievements or settlements Board Certified Specialization as designated by the State Bar or other leading organization Nominations from the Board of Directors, industry leading trial attorneys, and existing Premier 100 Trial Attorney membership Membership and executive positions held within state trial attorney organizations or other leading organizations Any Current ratings or ranking profiles as identified by reputable and credible online or local evaluations Aaron E. Rifkind has been in practice since 2009 and focuses his practice to business litigation and business transaction. He has been recognized for his commitment to providing excellent representation for clients both inside and outside of the courtroom. For more information about Aaron, check out his profile by clicking here.

If one party (defendant) intentionally interferes with another’s (plaintiff’s) contractual relations with a third party, the defendant can be liable for damages in a tort action. This is referred to as “tortious interference” in business law. In simple terms, a tortious interference claim for damages can be filed by a plaintiff against a defendant who decides to wrongfully interfere with the plaintiff’s business or contractual relationship with another individual or company. For a plaintiff to prevail in a tortious interference claim, he or she would need to prove the following elements of the claim: A valid contract existed between the plaintiff and a third party The defendant was aware of the contract between the plaintiff and third party The defendant’s actions were both intentional and improper The defendant’s actions directly caused injury to the plaintiff The plaintiff must have suffered damages In our experience, tortious interference claims frequently combat wrongful competition or immoral conduct by a former employee. For example, an employee could improperly use a confidential, proprietary data set belonging to a former employer to win the business of a former client of that employer. When a defendant wrongfully interferes with another’s business relationship or economic opportunity, he or she can be held liable for damages. If you are considering filing a tortious interference claim, please understand that these claims are highly-factual, rely heavily on the evidence, and it will be necessary prove the aforementioned elements of the claim to prevail in court. Three Most Common Tortious Interference Claims The courts generally recognize three members of the “tortious interference family,” including: 1) tortious interference with an existing contract, 2) tortious interference with business relations, and 3) tortious interference with an economic advantage. If there is no valid contract between the plaintiff and a third party, it can be more difficult to establish the business relationship; however, that does not mean it is impossible. Some jurisdictions, such as Illinois, are willing to recognize that a defendant interfered with the plaintiff’s “economic advantage” when it can be proven in court. To establish a claim in the absence of a contract, the plaintiff must show they had “reasonable expectation” of economic advantage, and the defendant knew about it. The plaintiff would also have to prove the realistic probability that he or she would have received the economic benefit, if it were not for the defendant’s interference. To learn more about tortious interference in Illinois or Wisconsin, contact our business litigation firm today!

As tax season approaches, naturally our firm receives more calls from business owners with tax questions, however, tax questions come year-round. All yearlong entrepreneurs ask, “How should I form my small business?” After all, the format of a business not only impacts financial performance, but it can either shield a business owner’s personal assets, or it can leave them vulnerable to liabilities and lawsuits. Since shielding assets is usually a priority for business owners, we are going to focus this post on the Limited Liability Company (LLC), which is one of the best ways to “wall off” a business owner’s personal assets from the debts and other liabilities of their business. Many startups are structured as LLCs and for good reason. LLCs offer some of the positive attributes of partnerships, sole proprietorships, and corporations, without some of the drawbacks of these entities. One of the distinct advantages of an LLC – the business is not taxed on its profits, as corporations (C-Corps) are. With an LLC, the owner of the company reports the profits and loss on their personal taxes returns, which is similar to the reporting requirements of a general partnership or a sole proprietorship. This process is referred to as “pass-through” taxation, and business owners do not file corporate tax returns with LLCs. Instead, the business owner reports their share of the company’s profits and losses on their personal tax returns. LLCs Don’t Have a Residency Requirement LLCs do not have “residency requirements,” which means the owner of an LLC does not have to be a U.S. citizen, nor do they have to be a permanent resident (green card holder). As a matter of fact, the absence of the residency requirement is one of the main reasons why so many immigrant-owned businesses are structured as LLCs. LLCs Limit Personal Liability An LLC is a legal entity that is separate and distinct from the owner of the company or the owners. Like the shareholders of a corporation, the owner of an LLC is not personally liable for the company’s debts or other legal liabilities. While the LLC owner may lose the money they invested in the company, unlike a general partner or sole proprietor, the owner of an LLC does not risk losing their home or their personal bank account because they are shielded. Other advantages of an LLC include: It’s less complex than other corporate entities There’s less paperwork involved than other corporate entities More flexibility in profit-sharing LLCs avoid double taxation LLCs allow entrepreneurs to run their own show If you are interested in learning more about the benefits of an LLC, please contact Rifkind Patrick LLC to speak with a Chicago business attorney. We would be glad to discuss LLCs, and all other types of business entities with you.