Businesses enter into contracts each and every day. Contracts are formed when customers make purchases, when suppliers deliver materials, or when contractors place orders. Contracts are a critical element when it comes to operating a business, and when contracts are not honored, disputes arise.

What Is Required to Form A Contract?

A contract requires five basic requirements, and if any one of the requirements is missing, no legal contract can be formed. The requirements for a contract include:

1. Parties Capable of Entering a Contract. The parties to the contract must be legally capable of entering the contract in the first place. This means that each party to the contract must be fully aware of what they are doing by entering the contract and must understand what the contract means. As a general rule, minors are not legally capable of entering into a contract due to their inexperience, nor are individuals who are considered insane capable of understanding what it means to enter a contract.
2. Offer and Acceptance. In order for a contract to exist, an offer to contract must be made by one party, and the offer must be accepted by another party. The offer must be clear and the acceptance must be definite and unqualified.
3. The parties must exchange something. Each party makes a promise to the other or gives something of value to the other party. The consideration does not necessarily have to be fair or proportional: one party could agree to pay a single dollar in exchange for a motor vehicle, and so long as both parties agree to that arrangement, it can be binding. Consideration could also take the form of not doing something, or foregoing something a party normally would do or has a legal right to do, such as waiving certain rights. This is sometimes referred to as “bargained for exchange” or “bargained for detriment”.
4. Legal Purpose. The contract must be for a legal purpose. To say this another way, the contract cannot violate the law. The parties cannot negotiate terms for the contract that break the law, or are illegal.
5. Mutual Assent. Both parties to the contract must have a meeting of the minds, meaning both parties have a similar understanding of what the contract means, and both agree to be bound by it.

If any of the above requirements is lacking, then it is unlikely that a contract has legally been formed. Furthermore, specific types of contracts might have additional requirements in order to successfully form a valid contract. For instance, for many types of contracts encountered in business, the contract must be made in writing, identifying key terms of the contract, and signed by both parties. For instance, California Civil Code Section 1622 notes that all contracts can be made orally, unless the contract is specifically required to be made in writing by law.

Additionally, certain states may impose additional requirements for a contract to be legally binding and valid, and these laws should be taken into consideration if a specific state’s laws govern the contract.

These elements are fairly straightforward, yet when a contractual issues do arise it can be very difficult for the parties to understand and navigate the legalities in contract law.  Please contact our office if you are facing a contractual issue, dispute, or simply have additional questions relating to contracts.

Personal medical information, medical records patient information are highly sensitive and confidential documents that should be safeguarded against unnecessary disclosure without the patient’s consent at all costs. The information contained in a patient’s medical records is private, and may not be disclosed without permission, save a few exceptional circumstances.

What Laws Protect Patient Medical Information?

There are a number of federal laws in place that are designed to protect the privacy of patient medical records, such as the:

• Health Insurance Portability and Accountability Act (HIPPA) Privacy Rule (45 C.F.R. Section 160, and 164A and E),
• HIPPA Security Rule (45 C.F.R. Section 160, and 164A and C), and
• HIPPA Breach Notification Rule (45 CFR Sections 164.400-414).

California additionally offers protection for patient medical records through California Civil Code Sections 56-56.37, also referred to as the Confidentiality of Medical Information Act. Under California law, a patient’s personal medical information, i.e., any individually identifiable information that is kept in physical or electronic form, is protected from unauthorized disclosure by health care providers, health care insurance providers, pharmaceutical companies, and other entities with access to this sensitive information, unless a court order demands such disclosure.

Medical information can include information concerning a patient’s medical history, mental health history, their physical or mental condition, or any course of treatment they are on. Individually identifiable information can include information such as a patient’s name, contact information, Social Security number or any other information that can be combined with publicly available information in order to identify the patient.

Patient Consent To Disclosure

Many times, a patient is referred to a specialist who requires copies of the patient’s medical records. However, the patient’s current doctor is not allowed to provide the patient’s medical records to the specialist without first obtaining the consent of the patient. If a patient wants to consent to the disclosure of their personal medical information, the patient must give permission in writing.

The requirements for providing patient consent to the sharing, releasing or disclosure of confidential medical records are outlined in California Civil Code Sections 56.11, which requires that the patient’s consent must be:

In writing and signed by the patient, the patient’s legal representative, or the beneficiary or personal representative of the patient (if the patient is deceased).

• Specific as to the permissible uses of the disclosed information, including detailing any restrictions or limitations on the disclosure of the patient’s medical records.
• Clear as to who is authorized to release/disclose the medical information concerning the patient, and must be clear as to who is the authorized recipient of the released/disclosed medical information.
• Clear as to the duration that the authorization is valid for.

Remedies For Unauthorized Disclosure

When a patient’s medical information is illegally disclosed or obtained without permission, the patient has a cause of action under California law. When the patient can show that the unauthorized disclosure amounted to some economic loss or a personal injury to the patient, then the patient has grounds for a suit. If you believe your information was disclosed without your authorization in writing and you have been damaged, contact our firm right away to speak with an experienced Los Angeles business attorney who can determine your rights and options.

We also advise businesses on how to substantially limit their liability and ensure their business policies conform to both state and federal statutes on a daily basis. Contact us if you have been accused of disclosing a patient or employee’s medical information without permission, or are unsure if your business is in full compliance with HIPPA and current employment laws.

There has been a lot of political talk lately about the pay gap between male and female workers, and California is one of the more progressive states when it comes to tackling this issue. In October, Governor Jerry Brown took steps to help close that gap in California by signing S.B. 358, which will revise the existing version of the California Fair Pay Act, specifically Cal. Labor Code §1197.5.

The existing law prohibits an employer from paying male and female workers in the same establishment at different wage rates for equal work requiring equal skill, effort, and responsibility. Exceptions exist under the current law, for seniority, merit, quality and quantity of work, or some other bona fide factor other than the sex of the worker. At present, it is a misdemeanor offense to pay workers of opposite sex differently in violation of the law.

Taking effect on January 1, 2016, the law will be strengthened and will incorporate changes, such as:

• Employees are permitted to discuss their own wages, and the wages of others, openly. These changes are designed to promote pay transparency.
• Instead of prohibiting wage differentials between workers of the opposite sex in the same establishment, the new law will prohibit paying workers of the opposite sex differently for substantially similar work, taking into consideration skill, effort, and responsibility associated with the work.
• If there is a wage differential between workers of the opposite sex, the burden is on the employer to affirmatively demonstrate why the wage differential exists, based on seniority, merit, quality and quantity of work, or some other bona fide factor other than the sex of the worker. These factors must be applied reasonably, and must account for the whole differential. This new provision will place a higher burden on employers who are trying to justify a pay gap between similarly situated employees of different sex.
• Employers are prohibited from discharging, discriminating against, or retaliating against workers who seek action under the new provisions of the new law, and any employee who is discharged, discriminated against, or suffers retaliation by their employer for seeking action under the provisions of the new law will be eligible to recover lost wages (including interest and lost benefits), may seek reinstatement or other suitable equitable relief. This change makes it easier for employees to establish a prima facie case against their employer.
• Employers are required to retain records concerning employees’ wages and wage rates for a period of three years, as opposed to the current two years.

What Can Employers Do In Preparation For This Change?

The new law is meant to provide additional protections to employees by placing new burdens on employers. Worker’s rights are important, and it is important that business owners and employers be appraised of the new changes that will be taking effect in the new year concerning employee wages. Any business who has California employees will be subject to these new requirements.

Employers should get ready for this change by evaluating employees’ payment structure and assessing whether there is any potential for problems to arise. Employers have a few months before the law takes effect, in which they can take steps to correct or mitigate any potential employee pay issues. Analyzing any wage differentials and assessing whether any reasonable factors exist that warrants the differential in employee’s pay are just a couple of important steps an employer should be taking at this time. Employers can also advise management of the changes in the law, especially the provisions concerning workers’ new ability to openly discuss wages.

For more information on the ramifications of this legal update, or should you need advisement for any employment-related matter, contact Spotora and Associates, PC today and to speak with a senior level Los Angeles business attorney.

For quite some time the paparazzi in California has relied upon the use of drones – which are unmanned, aerial devices that are operated remotely by a user or operator – to capture photographs of celebrities from afar, usually by piloting the unmanned drones over the private property owned by the celebrities to capture the shot. A new California bill aims to provide celebrities with a little more privacy by prohibiting the use of drones over private property, the LATimes reports.

Drone regulation has been a high-popularized issue in the area of technology law lately, especially in California.  Not only have the paparazzi made quite a bit of use out of drones for photography purposes, but others have taken up flying the contraptions to take photos of the wildfires that have been ravaging California.  The drones have even interfered with firefighting efforts in the recent past.  There have also been problems with drones being used to transport contraband into prison environments. However, many civilians enjoy drone manipulation as a hobby, and do not use their drones to break the law.

New Bill Puts Stop to Paparazzi Invasion of Celebrities’ Privacy

The bill, AB 856, deems flying a drone onto the private property of another for the purpose of taking photographs of video to be a physical invasion of privacy that will not be tolerated.  While previous versions of the bill would have made flying a drone within 350 feet over private property without consent a trespassing violation, the final version of the bill, which will be signed by Governor Jerry Brown in the upcoming weeks, is not as extreme.

Trespass is codified in California Penal Code Section 602 et seq. and already covers a variety of very specific trespassing violations.  Adding another trespass provision for the use of drones to take pictures of someone else, particularly a celebrity, would add more provisions to the already jumbled and dense area of trespass crimes.

The governor rejected many earlier versions of the drone bill as they would have created new crimes by adding new trespassing provisions to the law along with new punishments. In addition, making drone flying for photography purposes would unduly place restraints on a burgeoning drone industry. Rather, the new bill sets out to redefine the existing law to better incorporate invasions of privacy committed with a drone camera.

What Are The Existing Laws on Invasion of Privacy?

Invasion of privacy is based in tort law, and in California case law has established four tort actions based on invasion of privacy:

1. Intrusion into private places, conversations or other matters,
2. Public disclosures of private facts,
3. Presentation of a person to the public in a false light, and
4. Appropriation of another’s image or personality.

Shulman v. Group W Productions, Inc., 18 Cal.4th 200, 214 (1998). The use of drones to take unauthorized photos of celebrities in their homes and on their personal property would be an intrusion into a private place and under California Civil Code Section 1708.8, a person is liable for physical invasion of privacy when they knowingly enter the land of another person without permission for the purpose of capturing any form of visual image of the person whose privacy is being invaded.

This bill is yet another example of how the law must catch up at times to address the legal implications a new technology presents, and it highlights the importance of obtaining proper legal advisement while navigating the complicated world of technology.

If you are working with a new technology or other product/service and do not yet fully understand the legalities and implications of your venture, it is especially important to retain an experienced business attorney for advisement on how to limit your liability and protect any intellectual property rights.

What LLCs Need to Know About the Revised Uniform Limited Liability Company Act

Any manager or owner of a California LLC established after January 1, 2014 needs to be familiar with how the Revised Uniform Limited Liability Company Act (RULLCA) impacts their business.

Unanimous Approval Required When Issue Not Addressed

The RULLCA places certain restrictions on voting approval of certain issues that are not addressed specifically by the operating agreement. For instance, unanimous voting approval is required in order to:

● Merge the LLC with another entity or to convert the LLC to another type of entity.
● Dispose of LLC property, such as selling, leasing or exchanging the property.
● Amend the operating agreement.
● Do anything on behalf of the LLC that is outside of the ordinary course of business.

Because unanimous voting approval is required to do any of the above if it is not specifically provided for in the operating agreement, one member or manager of the LLC could stall out a decision to act on one of these matters by withholding their approval. Addressing these issues explicitly in a written operating agreement can circumvent a lot of potential headaches.

What The RULLCA Means for Agreements

Under the RULLCA, any agreement between the members of the LLC concerning the governance of the LLC is considered binding, which can create a lot of problems within the company if an agreement was made orally or was implied. Under the RULLCA, it is important to memorialize, in writing, any operating agreement concerning:

● Management’s rights and duties.
● The activities and conduct of the LLC.
● Relations between and among members of the LLC.
● How amendments to the operating agreement are to be made.

When matters concerning LLC governance are made in writing, there is less risk that members of the LLC will dispute the agreement, because the terms and conditions of the operating agreement have been documented.

Also, for LLCs that choose to be manager-managed, the RULLCA requires that this should be made explicit in both the operating agreement for the LLC, as well as in the the articles of organization.

Fiduciary Responsibilities under the RULLCA

Members or managers of an LLC owe fiduciary duties to one another and the LLC under the RULLCA; however, these fiduciary duties can be modified if they are modified in a written operating agreement, but they may not be eliminated altogether or modified in such a way that they are rendered manifestly unreasonable. Under Section 17704.09 of the California Corporations Code, those fiduciary duties include:

● The duty of care.
● The duty of loyalty.
● The duty of good faith and fair dealing.

When modifications to the fiduciary duties are made in the written operating agreement, they could be potentially drafted in a way that could open up individual members or managers of the LLC to liability for the LLC’s actions. This is because under the RULLCA, members or managers can lose their indemnification protections if the fiduciary duties of the members or managers are modified. LLC members and managers should make sure that they fully understand any modifications that have been made to the fiduciary duties in the written operating agreement before consenting to them.

Contact our office to speak with a senior Los Angeles business attorney for more information on what RULLCA means for your business entity today.

Many startup companies don’t realize the importance of hiring a business attorney.  Considering today’s technology-focused world, there are numerous reasons startup companies should spend the money for a lawyer who is skilled in copyright and intellectual property laws, trademarks, incorporating, agreements, contracts, and more.  In addition, many new companies make decisions without knowing whether they’re legal, just pushing the envelope, or even perhaps breaking the law.  As a Los Angeles startup company, do you really need to consult with an experienced Los Angeles business lawyer?  The answer is simple:  absolutely.

Here’s a quote you may or may not be familiar with by Guy Kawasaki:  “Ideas are easy.  Implementation is hard.”  Never a more true sentence spoken!

It really makes no difference whether yours is a digital startup or you’re just getting started with a brick-and-mortar business.  Every startup benefits by acquiring an attorney who specializes in the areas of business, including entity formation, founder agreements, and more.  In the early stages of a startup company, legal needs may vary in the areas of licensing, employment, partnership, and other areas depending on the nature of the startup, and its growth.  Mergers, acquisitions, and securities regulations are other areas many business attorneys specialize in, and that startups may eventually need guidance with.

Of the startup companies who do, why hire an attorney?  There are countless reasons, not the least of which include a business lawyer who is laser-focused on the success of his/her client provides long-term, strategic value in addition to focusing on risk-management for startups, and smart growth strategies.

If yours is a startup company, do you understand how to legally hire employees, compensate them, or even terminate an employee?  How is the proper way to go about protecting intellectual property, or advertise in a way that’s in compliance with federal rules?  If you intend to partner with another company or enter into an agreement, do you know all the rules and how to accomplish your goals without conflict?  Online, how can you maintain user privacy on your company website?  There are literally hundreds of questions startup companies have, which makes hiring a capable and trusted LA business lawyer critical to your success.

At Spotora & Associates, we understand the needs of startup companies, and how your success hinges on the guidance and support of a skilled and experienced attorney.  Avoid legal issues that could devastate the success of your business by consulting with a lawyer early on.

Recently, Total Recall Technologies, a Hawaii-based company, filed a lawsuit in a California U.S. District Court claiming fraud, breach, and other allegations against Oculus VR Inc. The lawsuit involves reality glasses, a product that has been touted by Oculus VR over the past three years, according to news reports. In 2014, social media giant Facebook purchased Oculus for a reported $2 billion. Now, Total Recall Technologies alleges that patented information from the company was taken by Oculus founder Palmer Luckey during the time he was employed by the company to develop a prototype head-mounted display product.

Luckey signed a confidentiality agreement, according to the complaint which requests punitive and compensatory damages from Oculus. The lawsuit also alleges that Luckey developed the converted information in order to market the Oculus Rift, his own virtual reality headset, violating agreements with Total Recall Technologies. While Luckey may argue that he used his own plans and knowledge in the development of the virtual reality headset, news article say the dispute is quite complex and highly fact-specific, entailing a thorough discovery process in order to learn what Luckey knew and whether he did actually breach or violate any specific provisions in the contracts between the two companies.

Did Luckey develop his product in a way that is different and unique from the products he may have worked on when associated with TRT, based on his own knowledge and plans, or were the agreements of any contracts between the two companies violated? A Reuters article states that Luckey was hired in 2011 by TRT to build a prototype head mounted display; at that time, he signed a confidentiality agreement, however the founder of Oculus is accused of using information he learned from his partnership when launching the Facebook Oculus Rift VR (virtual reality) headset.

Total Recall Technologies is seeking an unspecified amount in compensatory and punitive damages in the lawsuit against Luckey and Oculus.

Strangely, it is a bit curious as to why TRT has waited so long to bring a lawsuit against Oculus VR and Luckey. Perhaps the company decided to go forward at a point when Facebook became the owner of Oculus? A representative for the company says that the case is “meritless,” and that Oculus will be vigorous in its defense against TRT.

The lawsuit claims, according to Polygon, that “Without informing TRT, Luckey took the information he learned from the partnership, as well as the prototype that he built for the TRT using design features and other confidential information and materials supplied by the partnership, and passed it off to others as his own.”

Of the current modern virtual reality headsets, the Oculus Rift is the most widely known according to a Forbes article, and is scheduled to become available in the market during the first quarter of 2016 following a hugely successful Kickstarter campaign that resulted in raising $2.4 million, a drop in the bucket when compared to the $2 billion Facebook invested.

As highly experienced Los Angeles business attorneys and intellectual property attorneys, we understand that working with new technological advances may complicate already complex industries. Yet the huge majority of costly lawsuits and conflicts such as these are avoidable with the help of an experienced legal professional. If you are a former employee or an employer facing similar circumstances, contact Spotora & Associates, PC for the best way to proceed today.

In October of 2014, a judge rejected a lawsuit filed by writers Stephanie Counts and Shari Gold claiming copyright infringement of their work by Fox’s ‘New Girl’ television series.

In January of last year, the writers sued William Morris Endeavor (WME) Entertainment, Fox, Liz Meriwether (showrunner of New Girl) and executive producer Peter Chernin for allegedly basing the ‘New Girl’ series on the writers’ own proposals for a movie or television series which they said would have been titled Square One.  As defendants in the suit, Fox demanded a dismissal of the charges saying in court documents that “the only similarities between the works arise from general, non-protectable ideas.”  In October, U.S. District Judge Stephen Wilson rejected the lawsuit against Fox and the other defendants, saying the copyright infringement claims were ambiguous.

The judge ultimately dismissed the claim without prejudice, meaning the writers could bring the claim against the defendants again.  However, after the plaintiffs/writers had rejected a settlement offer of $10,000 allegedly extended by Fox and switched lawyers, the statute of limitations came into play, suggesting that perhaps they did not obtain an explicit tolling agreement in order to extend the time to file the claim.

Ultimately, on June 12 of this year Judge Wilson granted WME (William Morris Endeavor) Entertainment’s motion to dismiss the idea theft claim.  This time the judge dismissed the claim with prejudice, meaning the plaintiffs cannot file a lawsuit against the defendants again.  The Court found that Counts and Gold failed to allege any facts which would excuse the writers from timely filing of the claim.

As Los Angeles business attorneys specializing in entertainment law, we know these types of copyright infringement claims are made frequently in the entertainment industry.  Writers, designers, and other artists or “creatives” often feel that their ideas and works have effectively been stolen.  In some situations this is indeed the case, in others it may not be.  Do not allow the statute of limitations to dictate the outcome of your claim. For copyright infringement and other entertainment issues, trust the team at Spotora & Associates for unparalleled legal guidance and support.

On Monday, May 11, 55-year-old Craig Stevens of Newport Beach pleaded not guilty in a scheme allegedly designed to bilk investors out of more than $4 million by selling ‘bogus’ In-N-Out Burger franchises in the Middle East, according to an LA Times article.

Stevens, who was in federal court in Santa Ana, pleaded not guilty to wire fraud. Prosecutors allege that in January of 2014, Stevens contacted potential investors via email, peddling the franchises for approximately $150,000 per location. Royalties would cost an added $250,000 annually, according to the article.

Charge documents filed by the U.S. attorney’s office claim that through his email scheme, Stevens solicited about $4.27 million. Court documents also allege that in June of last year, Stevens passed off a fake licensing agreement for an In-N-Out franchise via email to a Lebanese investor, who was not identified.

While Stevens made claims to investors of partnerships and franchise agreements, In-N-Out Burger Inc., based in Irvine, has been in business since 1948 and is privately owned. The company says it has no such agreements with third parties. Stevens is scheduled to go on trial on the wire fraud charge in July.

As seasoned Los Angeles business attorneys, it is sometimes difficult to believe how gullible some individuals are, particularly when it comes to email or other schemes on the Internet – but it happens every day.

Before you invest in any franchise, it is vital to have a skilled attorney review all agreements, restrictions, rights, purchase or sales agreements, and other relevant documentation regarding the purchase of a franchise. Franchise law is complex, particularly given the fact that so many businesses are crossing into countries outside of the U.S. today.   Franchises are also subject to numerous regulations, so it is essential to have every detail analyzed with a fine-tooth comb.

If you’re considering investing in a franchise opportunity, speak with the professionals at Spotora & Associates first.

According to a recent article at the Democrat & Chronicle, Xerox has acquired Healthy Communities Institute, a public health data firm based in Berkeley providing a cloud platform that makes it possible for public health agencies, hospitals, and community coalitions to access community health and socioeconomic information easily. This allows these organizations to have a clearer understanding of risk factors, community demographics, and other information related to health.

Healthy Communities Institute supports organizations in 36 states in the U.S.. Xerox intends to integrate Healthy Communities Institute into its Midas+ Juvo Care Performance analytics platform in an effort to ultimately reach improved health care outcomes due to an enhanced comprehensive view of patient care for the organizations who use the cloud-based platform.

Midas+ senior vice president and managing director Justin Lanning said in a statement that “With this acquisition, we are enriching our health care business, evolving our offerings and innovating to address market changes.” Lanning went on to say that the acquisition would make it possible for clients to identify populations that are more at-risk, resulting in timelier clinical interventions that are more personalized. Ultimately, it is hoped the acquisition will improve health care while reducing costs.

Detailed terms of the acquisition were not disclosed in news articles.

At Spotora & Associates, our merger and acquisitions attorneys know there is much involved in acquiring a business, whether a company is acquiring another business or the company is to-be acquired. When structured properly, these deals can result in big companies expanding their competitive strengths while smaller companies enjoy growth opportunity. Ultimately, we work with our clients to help them achieve their goals and advise them on wise, profitable business decisions. Los Angeles area companies can rely on our skilled team of business lawyers for exceptional legal guidance, insight, and support in all of your business dealings.