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CLEVELAND, OHIO 44114
216.696.4200
Since the 1860's, Schneider, Smeltz, Ranney & LaFond has offered thoughtful, practical solutions to the complex legal issues facing our clients. | |
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 Seller's Remedies for Breach of Contract under the Uniform Commercial Code |
From time to time, the best decision to make for your business is one that requires breaching a contract. Breaching a contract may mean the difference between closing your doors or living to fight another day. If the contract involves the sale of goods, and both parties to the contract are "merchants", then the impact of the breach is governed by the Uniform Commercial Code.
The UCC states that remedies for a breach of contract are to be "administered to the end that the aggrieved party may be put in as good a position as if the other party had fully performed." The aggrieved party is not entitled to a financial windfall.
If a buyer doesn't accept goods when it is supposed to, or otherwise repudiates a contract, then the seller may:
- withhold delivery of the goods;
- stop delivery in transit;
- resell the goods and recover damages;
- recover damages equal to the difference between the market price of the goods and the contract price; or
- cancel the contract.
Continued Below |
| Social Networking and Employers |
It's interesting to see how advances in computer-based communication technologies are changing how we (or those we know) act and interact. The novelty is ever-refreshed with smaller, faster, cooler gadgets like smartphones and innovations in "social networking" formats like Facebook and Twitter. In a recent article in Crain's Cleveland Business, Chuck Soder discussed employer social networking policies from a marketing point of view. Social networking policies are also a "hot issue" for employment lawyers these days. Although there is still no real consensus as to what the "right" policy is, the pertinent issues are coming to light.
The first thing employers should already recognize is that the new technologies are challenging the nature of the traditional employment relationship. "Social networking" itself is still changing. It's impossible to tell what the next social networking fad will be, and impossible to say what will become of the current social networking giants.
There are good and bad aspects of social networking, depending on who's asking. Marketing and communications companies, for instance, have to stay alert to new media. New-technologies companies have to promote their relevance or hipness by addressing cutting edge trends. On the other hand, other companies, such as financial companies or law firms, place a premium on confidentiality, and should develop policies that set a tone of discretion. Nevertheless, employers who are too rigid about preventing social networking (as a result, perhaps, of the perceived frivolity of new technologies) may lose opportunities that will arise in the near future. The point is that now is probably a better time than later for employers to consider their policies.
A policy can sometimes be inferred from an employer's current computer use and general conduct policies. A good general policy should state that employees are expected to avoid engaging in inappropriate or offensive activity that may reflect negatively on the employer, its employees, or its business. Employers should also protect themselves with policies stating that employees should have no expectation of privacy in social network posts, and that the employer may be expected to monitor social networking sites from time to time.
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| Estate Planning Checkup: How to Get Organized |
It's been on your "To-Do" list for a long time, but this time you are serious: you are going to have your old estate plan reviewed. What do you need to do to get ready for your meeting?
The guidelines below can serve as a frame of reference as you assemble the information for your meeting. Of course, as you proceed you'll probably find it necessary to supply additional information pertinent to your particular situation.
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List all assets and liabilities accurately.
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Provide complete information about assets other than cash or securities (real estate, automobiles and boats are examples). Indicate whether these assets are in your name only or if they are owned jointly with your spouse or another individual. Also, be sure to include the location - especially if it is out of state - of each asset.
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Indicate names, ages and addresses of family members or friends you intend to name as beneficiaries.
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Provide a copy of you current will, trust(s) and powers of attorney.
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Include explanations, current balances and projections (if available) of all employee benefit plan entitlements, such as 401(k) plans and individual retirement accounts, as well as the beneficiary designations of the plans.
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Supply copies of any gift tax returns previously filed.
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Provide copies of any important documents, particularly those relating to divorce, annulment, separation or adoption. Don't overlook deeds of ownership for real estate.
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If you are married, outline how you want your property to pass in the following situations:
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You predecease your spouse;
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Your spouse predeceases you;
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One or more of your children predecease you; or
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You predecease a parent or other older relative who may not remain financially independent.
Consider how you would respond to the following questions.
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In the event you and your spouse die at the same time (in a common accident, for example), at what ages would you want property to be available to your children without restriction?
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At this time, should the need arise, whom would you wish to be designated as guardians of your children? If your chosen guardian(s) become unable to care for your children, whom would you want to succeed them?
Supply names, addresses and contacts at all charitable organizations (including schools and universities) you expect to mention in your estate plan and the type or amount of property you intend them to receive. Note whether or not you already have indicated your intentions to the planned recipient.
Specifically list items of personal property you want particular individuals to have upon your death if you predecease your spouse, and what other dispositions you would make if your spouse predeceases you.
Think about who you might appoint as executor and trustee. These are important decisions because the executor and trustee are responsible for managing and distributing your assets in the way you specify.
You are now ready to call your lawyer and get your meeting scheduled. |
If you would like more information on this subject or to schedule an appointment to discuss your estate planning needs, please contact the author of this article, Charles F. Adler, or any of our Estate Planning attorneys:
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Seller's Remedies for Breach of Contract under the Uniform Commercial Code (continued) |
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If the seller chooses to resell the goods, the resale must be made in good faith and in a commercially reasonable manner. Upon such a sale, the seller may recover the difference between the resale price and the contract price, together with any incidental damages, but less expenses saved as a result of the buyer's breach. If the seller chooses to resell the goods via a private sale, the seller must give the buyer reasonable notice of the intended sale. Failure to give reasonable notice may prevent the seller from recovering under this remedy.
If the seller does not resell the goods, it can collect the difference between the contract price and the market price under the contract. If the contract price/market price differential will not adequately compensate seller, the seller can instead collect its lost profits. This might occur if the goods are sold at a fixed price, and the original buyer's default causes the seller to lose out on an additional sale it could have made to another buyer. Finally, if the goods cannot be resold at a reasonable price, the seller can collect the entire contract price. However, this remedy is generally available only where the goods were custom-made for the buyer, or where the market for goods has disappeared.
Of course, a seller may sometimes be the breaching party. We will address a buyer's remedies for seller's breach of contract in the next edition of this newsletter.
If you have any questions regarding this subject, please contact the author of this article, Ryan P. Nowlin, or any of the attorneys in our Business Law or Litigation Law Practice Groups: |
Social Networking and Employers (continued) |
In addition, here are some of the employment issues to consider when crafting a social networking policy:
Wage and Hour Issues
One of the main employment law difficulties created by portable communication technologies is that it's hard to tell when your employees are on the clock anymore. Employment lawyers are still trying to catch up with what the Blackberry does to the employment relationship. Now, if a business encourages employees to promote the company on Twitter for marketing reasons, is that employee "suffered and permitted to work" (in the language of the Fair Labor Standards Act) every time she posts or "tweets" (in the language of Twitter)? Do you have to pay an employee overtime for sitting in a bar and texting her cyber-friends about what-she's-doing-now? At this point, an employer should at least consider restricting the company's social networking duties to overtime-exempt workers. As the distinction between at-work and off-work breaks down, employers on the cutting edge of the hip new workplace may also want to think about being on the cutting edge of scrutiny by the Department of Labor.
Aside from wage and hour issues, another zone of risk involves employer liability for employee behavior. More technically, it's much more difficult to ascertain whether your employees are engaging in conduct that is within their "scope of employment." The Crain's article described an employee of a screenprinting shop posting a pre-distribution image of a print on the employee's Facebook page. Complaints by the artist who created the print inspired the shop to implement a "no photographs" policy. The lawyer wonders, would the artist have had a copyright infringement case against the print shop; that is, at what point could the print shop have been considered the infringer? It would be one thing if the employee's Facebook page were strictly personal and did not mention his employer; but what if he used Facebook to promote the print shop and displayed many pictures of the shop's products? Then the "personal" Facebook page is drawn closer toward the employee's scope of employment, and the potential liability of the employer has grown.
A cultural (rather than technological) characteristic of social networking is a general disregard for propriety and discretion. Perhaps the convenience of electronic posting makes it easier for us to think less about what we write (and perhaps we think of it more as speaking than writing, or perhaps the initial anonymity of the internet enabled a generally outrageous tone that still carries over to all e-communications), but social media forums are full of statements about employers, co-workers, and customers that could lead to claims founded in defamation, trademark tarnishment, and unfair trade practice. Sometimes it seems the new technology has created a veritable new Gong Show of workplace howlers, as impulsive little twiddlers and You-Tube posters make the news with their amazing lapses in judgment and subsequent releases from employment.
Squelching employees does not have to be the first line of defense. For instance, policies that prohibit all social networking, or require employees to refrain from mentioning the employer's name or business, will defeat the main benefit of the platform as a marketing tool. Most employers should consider how they wish to position themselves in the social media environment, and tailor their policies accordingly: one company may proscribe employees from representing themselves as employees of the company in any post or transmission that is not authorized by the company; conversely, another may require employees to name themselves and the company when posting on certain topics or on certain sites. Some high-profile employees, like pro athletes or public-company CEOs, will always be associated with their employers, so different policies or contractual provisions would be appropriate.
Productivity
Also, employers should consider the effect of their social networking policies on work place/work time issues, and simple productivity. New technologies are not only blurring the traditional boundaries of employment, they can fudge the line of what constitutes appropriate work itself. Employers should recognize that cyberslacking isn't just Solitaire and Minesweeper anymore. A once-hot read called Here Comes Everybody speculated on the social effects of internet information sharing systems (come on, who's actually going to read a book like this about the internet? -- here's the Wikipedia link http://en.wikipedia.org/wiki/Here_Comes_Everybody). In it (presumably), author Clay Shirky proposes an axiom: "Communication tools don't get socially interesting until they get technologically boring .... It's when a technology becomes normal, then ubiquitous, and finally so pervasive as to be invisible, that the really profound changes happen." Social networking hasn't become "normal" or ubiquitous, but it's clearly part of "profound changes" that are taking place, even if it's difficult to pinpoint those changes just yet.
If you have any questions regarding this subject, please contact the author of this article, Todd K. Masuda, or any of the attorneys in our Employment Law Practice Group:
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At Schneider, Smeltz, Ranney & LaFond, we offer thoughtful, practical solutions to the complex problems facing our clients. Established in 1895, Schneider, Smeltz, Ranney & LaFond is Cleveland's oldest law firm. We not only apply the technical expertise our clients require, but also provide excellent, personal, and timely service to our clients.
We are a civil practice firm. Our primary areas of practice are business law, business succession planning, estate planning, estate and trust administration, charitable planning, family law, employment law, litigation, real estate, taxation and health care law.
Please feel free to contact one of our attorneys if you would like more information on any of the above issues or if you are in need of quality legal services.
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