Business Sale Agreement: What You Can Learn From A Cannabis Shop Lawsuit

By | Business Contracts, Business Lawyer | No Comments

A cannabis shop owner sold the business to Oregon weed retailer Nectar. The deal has gone to pot. See “Major Weed Retailer Nectar Hit With $4 Million Breach of Contract Lawsuit.” There are two important business sale agreement lessons to take from this dispute.

Related Article: 3 Early Warning Signs To Run Away From A Business Deal

  1. If you’re the seller, make sure you get paid enough up front that the deal is worthwhile even if it falls apart later. An agreement where you chase the bulk of the money often means you don’t get paid what you want. Or you’re working for free to keep the business afloat as part of damage control post-purchase.
  2. If you’re the buyer of a venture, be sure you’re ready to perform post-closing per the business sale agreement. In this instance, it appears both parties underestimated how long it would take for state government approval of the ownership transfer.

Related Article: How To Sell An Internet Business

An experienced business contracts lawyer can help you reduce the risk of these and other pitfalls in your business sale agreement…whether you’re the buyer or the seller.

Reputation Management: How To Avoid Scandal Because Of Breach Of Contract

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Reputation Management: How To Avoid Scandal When There’s A Breach Of ContractA professionally prepared agreement is essential to reputation management. Because it can help you avoid a PR disaster when there’s a breach of contract.

How bad can it get?

As an example, look at the lawsuit by the National Rifle Association (NRA)* against its ad agency for breach of contract. Among other things, the NRA is seeking $40 million in compensatory damages plus punitive damages. The lawsuit and related news stories will do nothing to help either party protect its reputation.

So, how do you prevent bad publicity? Here are 4 important reputation management tactics…

1. Pre-Agreement Due Diligence

Before signing a business contract, research the other party. Check to see if there is a history of lawsuits or the other party using social media to hurt another company’s reputation online. Walk away from the potential deal if there is such a history.

2. Confidentiality

The written agreement should contain confidentiality/non-disclosure provisions to protect important data.

3. Non-Disparagement

Your contract should provide that neither party will disparage the other during and after performance of the agreement. In some instances, it may make sense to include a large liquidated damages amount to be paid by a party if they do decide to denigrate the other party in violation of the agreement.

4. Alternative Dispute Resolution (ADR)

Rather than publicly airing the dispute with nasty claims and counterclaims in a lawsuit, it often makes sense for a contract to provide for confidential alternative dispute resolution. This can include mediation and binding arbitration using JAMS or AAA rules and procedures.

Other Reputation Management Contract Terms

Of course, there are other provisions that an experienced business contracts lawyer will include in your agreement for reputation management. Just make sure you put the right contract in place that protects your good name in case the relationship between the parties deteriorates. Because you can’t afford to leave business reputation management to chance.

* Disclosure – Business Lawyer Mike Young is a member of the National Rifle Association (NRA) and strong supporter of Second Amendment rights. However, he does not represent the NRA as legal counsel in this lawsuit or other matters.

Should You Update Your Website Terms Of Use To Cover Terrorism?

By | Internet Lawyer, Website Lawyer, Website Legal Documents | No Comments

Update Website Terms Of Use To Cover TerrorismMajor tech companies have agreed to comply with the Christchurch Call to Action To Eliminate Terrorist and Violent Extremist Content Online (the “Christchurch Call”). This includes modifying their website Terms of Use:

“We commit to updating our terms of use, community standards, codes of conduct, and acceptable use policies to expressly prohibit the distribution of terrorist and violent extremist content. We believe this is important to establish baseline expectations for users and to articulate a clear basis for removal of this content from our platforms and services and suspension or closure of accounts distributing such content.” (PDF link).

Should You Following Their Lead And Change Your Website Terms Of Use?

Probably not. Here’s why…

As a practical matter, there’s no U.S. federal legal requirement to address terrorism as a specific issue in your website legal protection. In fact, the federal government rejects the Christchurch Call on the grounds that online free speech protection is more important.

Now most website Terms of Use already require visitors to obey applicable law. That’s true whether it’s bespoke website legal documents prepared by a Website Lawyer for an online business. Or website legal forms (e.g. Website Legal Forms Generator software).

And terrorism itself is already outlawed. So, to address terrorism as a legal issue is redundant. Or it’s a way to curb speech online a website owner dislikes that otherwise would be legal.

Three Situations Where You Might Adopt The Christchurch Call

Here are three scenarios where you may want to change your site’s Terms of Use because of this issue…

1. Your Website Terms Of Use doesn’t require compliance with applicable law – so you want to address legal compliance in general, not just terrorism.

2. You want to virtue signal on the issue even though there’s no legal requirement to do so.

3. There’s a legitimate business reason for making such a change.

Under the third scenario, it’s possible at some point the tech giants who have signed onto the Christchurch Call will require you to do so as well if you want to enter into or continue a business relationship with them. For example, in order to be an Amazon affiliate or participate in Google advertising, your site’s terms might someday have to address terrorism for economic reasons.

Media Release: Don’t Fiji “Bomb” Your Business

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media release form modelAre you using others to promote your business without permission? When it comes to marketing your business, one of the key legal documents you’ll want in place is a media release for each person who appears in your promotional materials.

This includes photos and videos you use in advertising, customer testimonials, social media, etc.

What Can Happen If There’s No Media Release?

Because without a proper media release signed, you may end up owing a small fortune to the person whose likeness you used without permission.

For example, a grocery store got dunked for $10 million because they used basketball legend Michael Jordan’s photo in ads (he donated the money to charity).

Right now, there’s a lawsuit between Fiji Water and a model known as the photobombing “Fiji Water Girl” that’s about whether or not the company has the right to use the model’s likeness to promote their product. And it’s a mess because the company claims the only signed copy of the alleged release was apparently destroyed by the model.

Naturally, it isn’t just celebrities and models who can collect from you.

For example, a strip club used a woman’s photo, falsely implying she was one of their dancers. She sued the pants off the club.

Of course, the use without permission doesn’t have to be in a negative context for you to be liable.

Getting The Release Signed

Now it’s fairly simple to get a media release signed. And it’s easier to do it before taking photos or filming video than trying to collect signatures after the fact.

But the key is to get the right signatures for every person whose likeness you plan to use.

For example, there was an Internet marketing guru who held a seminar where he decided to sell videos of the event afterwards. Although the guru had attendee releases signed, there was a child who attended the event…and neither a parent nor legal guardian signed a media release on the kid’s behalf.

So, the guru had a choice of either paying the kid’s parents for the right to use his likeness or spend more money to have the child digitally edited out of video before selling it.

What About Stock Photography And Video?

If you’re going to use stock photos and videos, the licensing terms will govern what you can and can’t do with them in your business. Stock licensing doesn’t necessarily mean you can portray the person in the video or photo in a negative false light. And if you plan to exceed the scope of the license, you’ll want to get an additional release signed (and likely pay for it).

Where To Get A Media Release For Your Business

An experienced business contracts lawyer can prepare a media release form that’s right for your company. The terms will vary depending upon your type of business, what type of media you’re using, and whether or not you’ll be paying compensation in exchange for the release.

Child Privacy Online: Should Children Use Your Website?

By | Internet Lawyer, Website Lawyer, Website Legal Documents | No Comments

child privacy onlineWith new privacy laws and regulations, it’s time to review your website’s legal documents to make sure you’re protecting yourself from lawsuits and government investigations. Child privacy online is one of those issues you need to address.

By now, you may have heard about the European Union’s General Data Protection Regulation (GDPR)…and maybe know a little about the California Consumer Privacy Act of 2018. But they focus on consumers in general, not minors.

Children’s Online Privacy Protection Act

For now, in the United States, the primary law you should know about it is the Children’s Online Privacy Protection Act (COPPA) and related children’s privacy rule enforced by the U.S. Federal Trade Commission (FTC).

COPPA is designed to specifically protect minors under the age of 13 years. If your website is directly or indirectly targeting children this young, you should jump through all of the COPPA hoops to shield your business.

Website Privacy For Minors Over 12 Years Old

And if your website targets minors 13 to 17 years of age, you’ll still want to put in place privacy protections for these children that aren’t necessary for adult visitors.

For example, you may want to make it clear these teenagers can only use your site under the supervision of a parent or legal guardian. Or simply ban all minors under 18 from using your site.

What If Your Site Isn’t Intended For Children?

If your website doesn’t target minors, perhaps the easiest way to protect child privacy online is to make it clear in your site’s privacy policy and elsewhere that those under the age of 18 years shouldn’t use your site at all. And put safeguards into place to ensure you’re not collecting data from minors.

A good website lawyer can prepare a custom online privacy policy and other website legal documents designed to minimize your risks related to minors using your site. Of course, you’ve also got to follow your policy. It doesn’t help to say one thing about child privacy online in your website’s privacy statement and then do something else when it comes to collecting, protecting, and sharing minors’ data.

Do you need help with your site’s legal documents? You’ll want to set up a phone consultation with Attorney Young today.