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.

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.

Recently, it was announced that Twenty-First Century Fox and Walt Disney Co. would no longer run Verizon FiOS commercials in certain markets that advertise Verizon’s cable package, arguing that the company’s FiOS TV, a cable program that is said to be cheaper and slimmer than basic cable, violated existing agreements.

According to a news article at L.A. Biz, Verizon called the move made by the two companies, along with Comcast Corporation, an “anticompetitive tactic.” A spokeswoman for Verizon revealed to the New York Times that Disney would pull ads run for the cable program at television stations in New York including A & E and WABC, in addition to ESPN radio. In Philadelphia, the ABC affiliate pulled advertising for the FiOS custom TV stations. Fox has decided to pull the Verizon ads from WNYW, its New York affiliate, and YES, a sports cable channel.

According to another article at Reuters, Walt Disney Co. did run the Verizon ads in Pittsburgh, Boston, and Washington, D.C. last week. Disney declined to comment on the commercials, while a spokesperson for Fox told the Times that the company desired to keep the company’s discussions regarding commercials confidential.

Verizon’s FiOS Custom TV package makes it possible for customers to sign up for a basic package consisting of 36 channels; customers are also able to add on two news, sports, children’s program, or other genre-specific packages. With a cost of $55 per month, the package targets those who have chosen streaming services over cable due to cost.

On Wednesday, April 22, Disney notified Verizon via e-mail that the company would not run FiOS Custom TV ads on their channels, claiming that the ad violates contract agreements. Verizon maintains that the company, under current agreements with media companies to offer the slimmed-down service, is within its rights by giving subscribers their basic package of 36 fixed channels for the monthly charge.

Ultimately, at the bottom of the dispute is that while pay-TV providers desire to break up the large bundles of channels being offered by online companies and cable rivals at the current time, media companies are attempting to keep specific channels that are popular in the larger packages they offer in an effort to protect business.

At the time of news reports, Verizon and Disney had no comments on the pulled television ads.

The Los Angeles business attorneys at Spotora & Associates realize that the business and entertainment worlds are highly competitive, and the claims arising from television programming package agreements can be particularly complex. Whether your company is being accused of violating a contract or another entity is in breach of your agreement, contact us right away and our senior associates will identify and enforce your contractual rights to resolve the issue as efficiently as possible.

More than two decades after ‘What About Bob’ came out, Richard Dreyfuss is taking Disney to court over what monies may be owed after accountants refused to take a look at Disney’s books to see what may be owed. Dreyfuss has sued Walt Disney Pictures for breach of contract and additional claims after Disney allegedly refused to let Robinson & Company perform an audit for Dreyfuss and the widow of Raymond Wagner, producer of Turner & Hooch.

Why will Disney not allow auditors to review the ledgers related to Turner & Hooch and What About Bob? According to news reports, Robinson & Company is a particularly aggressive and effective auditor who typically recovers large damages for clients, according to a recent article at Deadline Hollywood. The filing, which includes seven filings made by Dreyfuss, claims that Disney is hostile regarding audits in general, and will not allow Robinson & Company, the auditor chosen by Dreyfuss, to audit the film giants’ ledgers; therefore, accounting under the supervision of the court is warranted. According to Dreyfuss, Wagner, and other plaintiffs in the case, Disney does not understand the intricacies involved in Hollywood accounting and only wants to use PricewaterhouseCoopers, Deloitte, KPMG, or Ernst & Young, the largest and most well-known accounting firms in the nation.

The filing claims that historically, motions picture companies abhor having to pay net and gross profit participants significant amounts, and have withheld substantial profits from those participants. Auditing companies who audit the entertainment industry including television and motion picture industries often fine that profit participants are owed monies, which is the reason for profit participation auditors.

Although there is reportedly a three year waiting list to perform an audit on Disney properties, Dreyfuss has apparently decided that he is a large enough talent to attempt to collect what is rightfully his in terms of profits. According to news reports, Turner & Hooch generated $72 million in revenue in the U.S., with What About Bob? generating $64 million in revenues in the U.S. and Canada since its release in May of 1991. In addition to movie theater revenues, international sales and home videos are thought to add up to a substantial amount for the two films in one way or another.

In the end, Dreyfuss and Wagner believe they have an opportunity to explore issues including how net profits are calculated by raising the issues of auditors. The complaint claims that the ‘Big Four’ accounting firms named above have no competence or reputation relevant to auditing such big names as Disney; Robinson, the auditing firm hired by Dreyfuss, is reported to be results-driven, tenacious, and tough.

As reputable LA entertainment attorneys, the staff at Spotora & Associates realize there are many complexities involved when it comes to profit participants and the entertainment world. Auditing is one small nuance of the overall picture, however when you have issues regarding whether monies are being paid out fairly, it is important to choose a Los Angeles business lawyer who is highly experienced and capable in these matters.

As experienced Los Angeles business attorneys we understand the issues franchisees often face in running a franchise.  Recently, a former 7-Eleven executive allegedly blew the whistle on company executives who put him in charge of ‘Operation Take-Back,’ a project that was designed to rid the franchise stores in New Jersey of South Asian and Indian franchisee owners, deemed no longer a part of the company’s vision.

According to a news article at NJ.com, Ian Shehaiber was hired by 7-Eleven as a district manager/field consultant in 2010.  Soon after, he was given a $1,500 cash reward and named 2011 Rookie Field Consultant of the Year.  However, all of that changed when his bosses placed Shehaiber in charge of the project in 2012.

Shehaiber filed suit against 7-Eleven in December in state Superior Court in Middlesex County, thereafter the company requested a change of venue to the U.S. District Court due to federal labor and discrimination law issues.  According to Gerald Marks, Shehaiber’s attorney, the franchise has taken action over the past two years to interrogate, dehumanize, and ridicule Indian franchisees in their effort to retake the 7-Eleven stores and resell them at a profit.

Margaret Chabris, a spokeswoman for 7-Eleven, said in a statement that “The allegations made in this complaint are false.”  She went on in the statement to say that the franchise is dedicated to protecting other franchisees, employees, and guests by terminating the relationship with franchisees who violate the franchise agreement or the law when appropriate, and that “a few” franchisees had been caught in violation of the law and/or their contractual obligations.  Shehaiber’s attorney did not comment on Chabris’ statement.

The lawsuit claims that Shehaiber was instructed to take part in the project in mid 2012, the goal being to identify franchisees who had stolen money from the franchise.  Shehaiber also claims in the suit that meetings regarding the take-back were fueled by aggressive anti-Indian tactics and racial remarks.  He said that he was constantly in fear that he would be terminated if he spoke up; Shehaiber also claims in the lawsuit that due to his Christian faith and his supervisor’s contempt for those who are non-Muslim, he was discriminated against and forced to work in a hostile environment.

Executives at 7-Eleven who were allegedly involved in ‘Operation Take-back’ claimed that franchise owners who were Indian made a habit of attempting to take advantage of others.

It will be interesting to learn how this all turns out, and whether 7-Eleven is able to put the stores in question under corporate control.

Whether you are a franchisor or franchisee, it is important to consult with a Los Angeles business attorney specializing in franchising when problems or issues surface that you are not certain how to deal with.  At Spotora & Associates, our staff has the skill, knowledge, and experience to successfully advise and handle any and all franchise issues.

There are a lot of challenges and unknowns when getting a new business venture off the ground. Am I ready for this launch? How long will it take me to recoup my capital? When will the customers begin rolling in?

If you are operating the business with a partner, one of the things that can save you a lot of headaches later on is putting together a partnership agreement. A partnership agreement clearly outlines each partner’s responsibilities and rights, therefore preventing disagreements in the future. It is not uncommon for disagreements between partners to sink new business ventures, destroy friendships and cause long, drawn-out legal battles.

A partnership agreement can be tailored to each venture’s specification, yet they all should include a section detailing each partner’s individual job duties. Consider life without a partnership agreement: If each party is under the impression that the other person is handling a particular task and it is not completed, the new business venture can crash before it has a chance to get off the ground.

“This legal document can minimize the number of risks that new business ventures face, creating a better chance for success,” said Anthony Spotora, a Los Angeles-based business and entertainment lawyer. “Included in the agreement are specifics on what authority each partner has when it comes to borrowing or lending money, buying supplies, executing lease agreements or entering other types of legal contracts.”

Perhaps certain business transactions can only take place with the consent of both partners. Perhaps Person A exclusively handles the purchasing of supplies while Person B exclusively handles the hiring of new employees. Whatever the arrangement, it is important to make the rules of the game clear to all.

The partnership agreement might also want to include procedures if one partner wants to leave or passes on, how profits will be shared, how an additional partner would be added, management responsibilities, how each partner contributes cash flow, management restrictions and other decision-making protocol.

Each state has a uniform business partnership law, but a partnership agreement can override this law to suit your particular needs. A partnership agreement is a small investment in time and resources that can often mean the difference between success and failure.

There is a lot to consider when putting together a partnership agreement so it is best to consult an attorney with experience in such matters.

To learn more, visit https://www.spotoralaw.com/

While no one wants to think of a marriage as a business, it often is just that. The partners work together to run it by agreement.

One of the more controversial areas of California divorce law centers on whether or not to have a prenuptial agreement. Many feel it’s not exactly the epitome of being amorous. And frankly, it really isn’t all that romantic, but it’s necessary in case something happens later. Not being protected can be a major disaster to the spouse who happens to have less money and/or assets than the other. It’s not that a prenup is intentionally a power play involving finances, but some cases turn out that way when the marriage comes apart. California is a community property state, so everything is split 50/50 unless a prenup says otherwise.

Prenuptials are not just for the wealthy, although you’d wonder about that reading the newspapers and watching television. Mostly, it seems, that only celebrities opt to have a prenup. In reality, they are for everyone and anyone who wants one. There’s a very common myth floating around that a couple doesn’t need to go this route if they don’t have much money between them. This is not the case.

Virtually anything and everything can be the focus of a prenuptial agreement. Getting around the “not so romantic” stigma associated with them often works if the couple just has a very frank and wide-ranging discussion about how each of them handles finances before they get married. Finding out later that the husband spends thousands on sports equipment, while the wife thinks the money should be set aside for the children’s education, is not exactly conducive to a happy, well-balanced marriage. The bottom line is if you don’t want surprises later, get things out in the open now, because no one knows what will happen.

What if one of the spouses comes into more money in the future, as a result of their business or a talent they have? If you know how to handle the division of community property in advance of any possible divorce, you’ll be well ahead of the game and won’t necessarily have to face the bitter acrimony that sometimes accompanies divorces without a prenup in place. If you don’t know how to go about setting that kind of agreement up, contact an experienced attorney.

This brings up another very common belief, that prenuptials really only protect the partner with the most money and take it away from the partner that doesn’t have much. The reality is that prenuptial agreements are designed to protect both parties.

It should also be noted that just about anything can be written into a prenup, but that doesn’t mean that everything and the kitchen sink must be included in the agreement. These agreements can either be incredibly complex or strikingly simple. It’s up to the parties to decide what they want.

By the way, living together without the benefit of a marriage license is not the way to get around not having a prenuptial. Some couples think if they just live together, the live-in has no claim to the other’s property or income. Wrong. The person making the money and with the assets could be taking a huge risk just living together. It’s called palimony. If you want to protect what you’ve got, get a prenup drafted and signed.

Anthony Spotora is a Los Angeles family lawyer and Los Angeles business attorney. To learn more, visit Spotoralaw.com.

Have you ever seen this brief legal ditty? Sure you have. And whether you know it or not, you likely accept contracts containing this language on a weekly, maybe even daily basis.

Ever valet park your car or use the services of your local dry cleaner; or, maybe you have attended an amusement park? Well then, without signing anything, you have just entered into an “adhesion contract”.

Adhesion contracts are contracts between two parties that do not allow for negotiation — it’s take it or leave it! However, can you realistically leave it? What would your options be anyway? Should you park your car elsewhere or take your clothes to a different cleaner? Won’t you just be faced with the same issue there? And what about that pocket size agreement? Will it really limit their liability? I mean really, who can even read that boilerplate it’s so small?!

And how about the long-form adhesion contract that you actually sign; a residential lease agreement, for example? Were you afforded the opportunity to negotiate its terms or, did the landlord stand in a position of such superior bargaining power that you signed it, knowing also that it would not be any different down the street?

Theoretically, the common debate relating to contracts of adhesion have reasonably focused on whether or not courts should enforce them. On the one hand, they undeniably fulfill an important role of efficiency in the marketplace. These standard form agreements can substantially reduce transaction costs by eliminating the need for buyers and sellers to negotiate the terms of every sale of goods or services. However, they may also consequently result in unjust terms being agreed to by the accepting party. Few would disagree that it is simply unfair for the seller to avoid all liability or to unilaterally give themselves the right to terminate the agreement.

So then, are these contracts enforceable?

In common law jurisdictions, these standard form agreements are treated like any other contract and a signature or other manifestation of acceptance and intent to be legally bound will bind the acceptor. This reality, however, has caused for many common law jurisdictions to develop special rules that govern such situations. As a general rule, courts in these jurisdictions will interpret the standard form agreement contra proferentem which, literally means — ‘against the proffering person.’

Most of the United States, however, follows the Uniform Commercial Code which, similar to the common law jurisdictions mentioned above, has provisions relating specifically to standard form contracts and; when a standard form contract is found to be a contract of adhesion, it is given special scrutiny.

For a contract to be treated as a contract of adhesion, it must be:

1. Presented on a standard form and on a “take it or leave it” basis; and
2. Give the consumer no ability to negotiate because of their unequal bargaining position.

Next, the “special scrutiny” may be performed in a number of ways, a few of which are:

1. If the term was beyond the reasonable expectations of the “adhering” party, the court can find it to not be enforceable; or
2. Under the equitable principles of the Doctrine of Unconscionability, unconscionability may be found and the contract held unenforceable when there is an “absence of meaningful choice on the part of one party due to the one-sided contract provisions, together with terms which are so oppressive that no reasonable person would make them and no fair and honest person would accept them.” (Fanning v. Fritz’s Pontiac-Cadillac-Buick Inc.)

So…the good news is: recourse may be available for the underdog!

The bad news is: both parties will have to expend time and money for a court to determine if the adhesion contract is enforceable.

The creative process that is so closely tied to the success of the entertainment industry often raises questions regarding ownership of creative works. While copyrights usually rest with the creator of a work, certain agreements can be made that transfer these rights to another party.

Generally, copyrights rest with the author or authors who originally create a work. However, the Copyright Act of 1976 contains a major exception, the “Work Made for Hire” Doctrine, which challenges the fundamental principle that copyright ownership lies with the individual who creates the work. In the case of a “Work Made for Hire,” the party for whom the work was completed is considered the author and thus holds the copyrights to the work created rather than the party who actually authored the work.

A Work Made for Hire is not, however, any work that you pay someone to create for you. In addition, it is not any work that you and a developer simply agree is a Work Made for Hire. Rather, “Work Made for Hire” is a specifically defined term in Copyright Law and applies only when certain conditions are met.

Disputes over what constitutes a “Work Made for Hire” often arise over two main issues: the distinction between an employee and a non-employee or independent contractor and whether or not the work in question qualifies as one or more of the nine categories outlined in the Copyright Act.

Section 101 of the Copyright Act defines a “work made for hire” as either:

1.  a work prepared by an employee within the scope of his or her employment; or

2.  a work by a freelancer (independent contractor) which is specially ordered or commissioned for use as a translation, as a part of a motion picture or other audiovisual work, as a contribution to a collective work, as an atlas, as a compilation, as an instructional text, as a test, as answer material for a test, or as a supplementary work such as a preface to a book, a forward or a musical arrangement, if the parties expressly agree in a written instrument signed by them that the work shall be considered a work made for hire.

If the condition of category one is met, copyright ownership belongs to the employer unless an employment contract specifies that the creation of copyrightable material is not within the scope of employment. If the creation of the work falls outside the scope of employment then the employee, and not the employer, would have copyright ownership of the work.

If the conditions in category two are met, then the party hiring the freelancer would own the copyrights. If, however, these requirements are not strictly followed and the work falls outside the nine categories enumerated by the Copyright Act or a written agreement does not exist, then the freelancer would retain copyright ownership in the work.

Los Angeles intellectual property attorney, Anthony Spotora, commented, “It is the lack of a written instrument specifying the intended “Work-Made-for-Hire” relationship with independent contractors that commonly creates “Work-Made-for-Hire” copyright ownership issues. All too often, the intended owner seeks to argue that a “Work-Made-for-Hire” relationship was agreed upon, although it was stated only verbally. Subsequently, authorship of the work at issue ultimately winds up with its creator, rather that the intended owner. The second biggest misperception in freelance arrangements is that a written agreement specifying that a work is intended to be created on a “Work-Made-for-Hire” basis makes it so when, in fact, that is only the case if the work falls into one of the nine exceptions listed in Section 101 of the U.S. Copyright Act.”

Anthony Spotora is a Los Angeles entertainment lawyer and Los Angeles business attorney. To learn more, visit Spotoralaw.com.

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Selling show ideas in Hollywood is no easy feat. It not only requires the ability to create a great pitch, but also the know-how and willingness to follow established procedures for selling a show.

In order to sell a show idea, it’s necessary to create a great pitch. There are several elements that should be included in a pitch: a logline, a synopsis, and a treatment. A logline is a one-sentence description of the show. A synopsis is a brief summary of the show including information about the main characters and the theme of the show. A treatment is much like a synopsis of a show idea but is a more inclusive document which includes detailed descriptions of the characters and the show’s plot. Writing a treatment is an essential step as it is the primary medium through which show ideas are typically presented to TV producers and executives.

As an artist, you will want to determine which networks to submit your show idea to. You will want to consider the nature of your programming and whether or not it is in alignment with the types of shows each network produces. Once the appropriate networks have been identified, you should learn the submission guidelines for each. Some networks may accept unsolicited treatments and show pitches but, these are of the minority. The majority of networks require artists to have an agent or even an entertainment lawyer acting as his or her representative. Knowing and following the proper procedures for each network is an essential step in increasing an artist’s odds of having their show idea accepted.

Now, it is no secret that securing an agent can be a very challenging task. In order to overcome this challenge, artists must be willing to network; they should consider engaging a credible, proven manager and they would be wise to also consider developing a more formal, strategic plan for success with their entertainment attorney.

For artists who are able to secure an agent, he or she can help connect them with development executives – individuals who have the power to turn ideas into paychecks. When meeting with a development executive, artists must be able to accurately convey the concept of their show in a manner that is simple yet intriguing. This is where a well-written logline, synopsis, and treatment come into play. If an artist has taken the time to prepare these documents properly, the executive will be able to see the show’s potential.

Once an artist successfully pitches a show idea, it is more likely to be optioned for purchase. At this stage, an artist should utilize the expertise of their entertainment attorney to help negotiate the specific terms of the agreement. Most often, the writer will be paid an option fee up front for the company to have the exclusive rights to sell and/or produce the project with a network or third-party buyer. Once the option is exercised, the writer will then receive the negotiated purchase price and may additionally receive a small percentage of participation in the fees received by the production company for producing the show.

Navigating these negotiations can be difficult and an experienced entertainment attorney can offer artists the guidance they need to successfully sell their show ideas.

To learn more, visit https://www.spotoralaw.com/.