A Case of Wedding Contract “What-Ifs”
When they’re selling what we want
As I prepare for my upcoming wedding, I am increasingly bombarded with vendor contracts asking me to pay this and waive that. And I will tell you that I am often tempted to do exactly that, especially when the vendor appears to be selling what I want. But, as an attorney, I am always asking (sometimes excessively) the “what if” questions and making sure the answers to those questions are in the contract. Initially, this was uncomfortable for me, as it may be for some of you. First of all, we tend to hire people with whom we are comfortable, and with whom we enjoy working. Second, we may be in unfamiliar territory when negotiating contracts, or specific types of contracts. And, finally, we may see asking tough questions as being negative or putting up road blocks to what we want. If you are parents of a groom- or bride-to-be you might run into resistance from vendors and children alike when asking these same questions.
Ask questions first
But, these “what if” questions and their answers are essential. Clients often come in with a contract issue saying “I never thought anything like this would happen,” and we are forced to look at the contract for what is sometimes an unpleasant answer. Here are examples of the “what ifs” I asked my photographers:
- What if something happens to your equipment during the wedding?
- What if something happens to your computer after the pictures are downloaded?
- What if your children get sick and you need to leave?
- What if you get sick or there is another emergency?
- What if we are dissatisfied with the replacement photographers you select in the event you are unavailable?
- What if there is a snow storm between Grand Rapids and Detroit on the day of the wedding?
The second step, of course, is making sure that the answers to the “what-ifs” are in the contract. Hand write changes into the contract if you must, but resist the temptation to accept “Just trust me,” or “That has never happened before.”
Minimize the surprises
Of course, things will go wrong. But, you can minimize the surprises and anticipate the solutions if the contracts you sign have the answers. So, take some time, do a little “negative” thinking, and come down with a case of the “what ifs.”
We strive to make “doing business” profitable and advantageous for you. Please call us if you need help crafting the “what-ifs!”
Julie Pfitzenmaier
With a tremendous amount of hoopla, Michigan’s law banning texting while driving took effect this past July 1, 2010. In so doing, Michigan joined somewhere between 14 and 23 states (the reported numbers vary widely) and the District of Columbia, that have taken this approach in an effort to deal with the growing problem of distracted drivers. A summer 2009 study by the Virginia Tech Transportation Institute found that the act of writing a text message while driving substantially increased the chances of becoming involved in an accident. According to figures published by the National Highway Traffic Safety Administration, accidents resulting from some form of distracted driving resulted in 6,000 deaths and 500,000 injuries in 2008. Overall, distracted drivers accounted for almost 80% of all accidents and 65% of near accidents, nation wide. Here in Michigan, some 3,315 accidents were attributed to distracted driving in 2009, with 900 of those specifically linked to some sort of cell phone use.
(a) For a first violation, $100.00.
Is the law working? It’s too early to tell. I do know this. As someone who rides a motorcycle, distracted drivers scare the daylights out of me. On a motorcycle, I am pretty much at eye level with drivers, and can easily see what they are doing. Just this past weekend, on a trip to the west side of the state, I encountered numerous erratic drivers; you know the ones, driving too slow, too fast, drifting in and out of their lanes, and so on. In every instance, the driver was either talking on a cell phone or texting while driving. Very scary stuff.
Until recently, most U.S. nonprofit organizations were not required to file an annual information return with the IRS. Beginning January 2007, all that changed when even the smallest of nonprofits became subject to IRS annual reporting requirements. The only exceptions were state organizations, churches and their affiliated organizations, and certain religious groups. Nearly all others were required to file some version of Form 990, and the failure to do so for three consecutive years would mean automatic loss of the organization’s tax-exempt status.
Welcome relief for small nonprofits only
For charities that receive an IRS revocation letter next year, all is not lost. A nonprofit can regain its tax-exempt status by filing a lengthy application (Form 1023 or Form 1024) with the IRS and paying the applicable user fee. (Unfortunately, this application process applies even to organizations that did not have to apply in order to gain their initial tax-exempt status.) Reinstatement will usually be effective as of the date the application is filed. However, if a nonprofit can demonstrate that it had reasonable cause for failing to file returns for three years, reinstatement will be effective as of the date of revocation.
Previously, we informed you of a Michigan Court of Appeals decision from 2008, which held that a parent’s waiver of liability for a child’s personal injuries is ineffective. On June 18, 2010, the Michigan Supreme Court decided that the Court of Appeals reached the correct conclusion: parental waivers are unenforceable. The Court reasoned that parental waivers are an attempt to contractually prohibit a minor from filing a lawsuit. Since parents cannot legally contract on behalf of their children, such waivers cannot be enforced.
In fact, a bill is currently pending in the Michigan House of Representatives that would allow a parent or guardian of a minor who participates in a recreational activity to sign a written waiver releasing a person (the sponsor or organizer of the activity, or the owner or lessee of the property) from liability for resulting injuries. The bill would authorize parents or guardians to sign the waivers in advance of the activity. It is unknown at this time, however, if and when the bill will become law.
Also, some establishments may want to investigate the suitability of contracts that provide for the parents themselves to “indemnify” (or reimburse) the establishment for any losses that arise from the injuries that a child suffers while participating in the activity at the establishment. While parents cannot contract for their children, they can enter contractual commitments of their own. An indemnification agreement would essentially have a parent agreeing that, “If my child is injured while participating in your activity – and if that injury leads to a claim against you – I will reimburse you for the cost of that claim.” While not nearly as clean or as risk free as a release, such an agreement would at least provide one additional tool to use in defense of an injury claim.
These days it’s hard to listen to the radio, watch television or go on-line without being inundated by ads pitching the latest and greatest do-it-yourself, on-line, estate plan documents: who needs those money grubbing lawyers anyway? One thing all of these pitches have in common is the assurance that the forms are legally valid and binding. Truth be told, “legally valid” is not a tough threshold to meet. If the person signing the Will (or trust, or, you name it) has the requisite mental capacity under the laws of the state where the document is being signed, and the document is signed, witnessed, or notarized in accordance with the laws of the state, it is legally valid. Legal validity, however, is only part of the story. Imagine the shock years down the road when it is discovered that an estate plan put in place by well meaning parents, intending to provide for each other and their children upon their disability and eventual deaths, does nothing of the sort.
Second, the document was premised upon property law concepts that are not followed in Michigan. Admittedly, this is where the explanation can get technical and complicated, so I’ll convey only the basics. Insofar as property ownership between a husband and wife is concerned, 40 states follow concepts derived from, and based upon, English common law. There are 10 states, however, that characterize property owned by a husband and wife pursuant to concepts that can be traced to French and Spanish civil law. Those states are said to be “community property” states. And, even within these groupings of common law and community property law jurisdictions, there are many variations. The salient fact remains, however, that property owned by a husband and wife is treated differently in community property and common law jurisdictions. Michigan is not a community property state. Yet, this document, although touted to be a Michigan specific document, employed community property terminology and concepts.
In order to be deductible, your expenses must be reasonable, and there can be no significant element of personal pleasure associated with them. This doesn’t mean you can’t take a day to relax in the course of a week spent building homes, but the element of pleasure must be minor when contrasted with the importance or duration of your charitable service. (There is, unfortunately, no bright-line rule on how to measure when that element of personal pleasure ceases to be minor!)
A Michigan State Police Lieutenant made news recently when he confirmed publicly a fact many have long suspected: in many places throughout the state, speed limits are set artificially low. Speed limits that are too low result in speeding tickets which equate to revenue for cash strapped local units of government. This assessment was then confirmed by a local police chief whose jurisdiction includes a stretch of one of the most heavily traveled roads in the state. As the road crosses into his city, the speed limit drops to a point that, as he admits, likely cannot be justified. The city has no intention of raising the speed limit, however, because of the revenue it generates for the city. A state lawmaker believes that the problem of artificially low speed limits has gotten so out of hand that he has introduced legislation that will force local communities to correct speed limits that are set too low. The question then becomes, how are speed limits set in the first place? 
The right to set speed limits is an exercise of the police power of the state and is therefore justified on the basis of public safety. Speed limits are intended to reflect a reasonable and safe speed that will facilitate the safe and orderly flow of traffic under normal conditions. Research has shown that the majority of motorists operate their vehicles in a safe and reasonable manner, hence, traffic laws and speed limits that reflect the behavior of the majority of motorists are the most successful. The inverse is also true: traffic laws and speed limits that arbitrarily restrict the majority of motorists encourage violations, lack public support and rarely achieve the desired result. Speed limits are not to be set based upon unreasoned opinion but upon thorough traffic engineering studies. Those studies include an analysis of such factors as the number and types of accidents that have occurred, the number of cars traveling the road, their speeds, the presence of pedestrians, the physical condition of the road surface, hills, curves, number of lanes, driveways, intersections, and so on.
While realistic speed limits are generally followed, unrealistic speed limits are not. Absent strict, continuous, and visible enforcement, artificially low speed limits will be ignored. And any adherence that does result is limited to the immediate time and immediate area of the enforcement (i.e., speed traps). If you find yourself getting a ticket in an area where the posted speed limit just doesn’t seem to make sense, you might consider asking the municipality for a copy of the traffic control order and the engineering studies upon which the speed limit was based. If the speed limit is not within 5 mph of the 85th percentile speed, and, no other unique and distinguishing factors exist, you just might have a defense. You might also want to keep an eye on the pending legislation.
After seventeen years practicing law, I find that most business clients appreciate the services I have to offer and are willing to pay a fair fee for them. But I have yet to meet a client who feels at all inclined to pay the legal bill of a competitor who has just sued. That’s like being thirteen and kissing your sister. Yet when corporations sue each other over the alleged theft of a valuable employee, the dispute can quickly become a fight over attorney fees.
If the competitor goes to the trouble of suing you, it will probably bring every plausible claim available against you. In non-compete cases, this usually involves a claim that the employee and you have conspired to steal the competitor’s trade secrets and proprietary information. In most lawsuits between business competitors, each side pays its own legal expenses – win, lose or draw. But under Michigan’s version of the Uniform Trade Secrets Act, a prevailing plaintiff can recover attorney fees if it shows that the defendant willfully and maliciously stole a trade secret.
Obviously, the judge’s decision on the injunction will either strengthen or weaken the suing party’s claim that you acted maliciously. Either way, both sides will need to consider carefully how much more legal expense they are willing to incur solely to fight over who should pay the fees to date. If the case appears ready for settlement even before the judge rules on the request for an injunction, you still may face a fight over attorney fees. I have seen plaintiffs with no real damages become all the more insistent that they recover attorney fees as a matter of principle to ensure that the perceived misconduct does not go unpunished. If you are defending, do you buckle and pay some portion of the other side’s fees, or do you hold ground as a matter of principle? If you hold fast, you may end up paying far more money in the long run, albeit to your own attorney rather than to your competitor’s. As a colleague once told me, “It is perfectly appropriate to stand on principle, once you have acknowledged that principle is expensive.”
Over the last several years, Michigan has experienced extraordinary job loss. One fruit of those job losses has been an unusual number of business start-ups. All over the state, laid off workers have “reinvented” themselves, sometimes going back to school to pursue a different or more advanced degree, and sometimes going into business for themselves doing either the kind of work they have always done or something entirely new.
These online tools don’t replace the need for tax or legal counsel, but they can help you make better and more efficient use of both your time and our office, which in turn can save you money. If you are considering a new business venture or you need our assistance with a legal matter affecting your ongoing business, please contact any of the attorneys at Wright Penning & Beamer. We would be pleased to help you!