Recent Answers to California Law Questions

Matthew K.

Answered Mar 3, 2026

After the sale, did you continue living there and paying the lease amount? It's difficult to expand on my answer without reading the agreement (it cannot be oral). Assuming the agreement is what you say, you might consider recording a Lis Pendens on the property. That will get everyone's attention, I can assure you. Probably also consider a quiet title action. None of that advice is necessarily relevant; it depends on what the agreement says.

Elizabeth J.

Answered Mar 3, 2026

Your rights will depend in part on the specific terms of the rent-to-own agreement, but generally a valid lease with an enforceable option to purchase may bind a subsequent purchaser. If the option was not recorded or the conservator obtained court approval to sell free of encumbrances, your remedies may be affected. A full analysis would require reviewing the written agreement, the probate or conservatorship court orders, the sale documents, and the current status of title.

Randy M.

Answered Sep 14, 2025

When you upload a video to YouTube, you're automatically agreeing to their Terms of Service and Copyright Policy. What that really means is this: you're saying you either own the rights to every part of your video or you've gotten permission to use it. There isn’t a separate “Copyright License Agreement” that gives you a pass to use copyrighted material freely. That includes music, movie clips, TV shows, sports highlights, and even images you found online. Just giving credit or adding a line like “no infringement intended” doesn’t offer any legal protection. Now, how does YouTube actually enforce all of this? It mainly comes down to two systems. The first is Content ID. That one’s automated. It scans your video against a big database of copyrighted material that rights holders have submitted. If there’s a match, you’ll get a Content ID claim. That’s not the same as a copyright strike, but it can still have consequences. The rights holder might choose to monetize your video, block it in some countries, or just track how it performs. A lot of creators run into this when they use popular music, and usually the result is that they lose monetization for that video. In some cases, the rights holder might go a step further and issue both a Content ID claim and a formal takedown. The second system is a DMCA takedown notice. That’s a legal process under U.S. copyright law, and it lets a rights holder demand that infringing content be removed. If that takedown is valid, your channel gets a copyright strike. One strike can block you from live streaming. If you get three strikes within 90 days, your channel and any linked accounts can be terminated. Strikes expire after 90 days if you go through YouTube’s Copyright School, but if you keep getting them, things can escalate fast. Now, fair use is where a lot of creators hope they’re protected. It’s a legal doctrine in the U.S., found in Section 107 of the Copyright Act. In short, it allows limited use of copyrighted material without permission, as long as the use meets certain criteria and is considered transformative. Courts look at four main factors: First, the purpose and character of the use. Second, the nature of the copyrighted work. Third, how much of it you used and how significant that portion was. And fourth, whether your use could harm the market for the original. For example, if you're reviewing a movie and include a few short clips with your own commentary, that’s much more likely to fall under fair use than posting a montage of fight scenes with no added value. Using factual material, like a short news segment in a critique, tends to be safer than copying a full song or film scene. But the truth is, fair use is case-specific. There’s no guaranteed rule like “10 seconds is okay.” Only a court can give a definitive answer. So what can you do? The safest route is always to license the content. Services like Epidemic Sound, Artlist, and Storyblocks let you use music and footage under a subscription license. For free material, YouTube’s Audio Library is a solid option. You can also look at public domain works. In the U.S., that currently includes anything published before 1929. That date moves up each January 1. Another option is Creative Commons content, but you’ll need to follow the terms of those licenses, which can include attribution or limits on commercial use. If you’re going to rely on fair use, make sure what you’re doing is truly transformative. That means adding something original, like commentary, criticism, or parody. Use only what’s necessary and avoid the most recognizable or valuable parts of the original. It’s important to understand that even if you’re confident your video qualifies as fair use, YouTube can still take it down if the rights holder files a takedown notice. Your option at that point is to dispute it, but that can come with risks, including potential legal action. If your channel is monetized, repeated claims or strikes can impact your income and the long-term future of your account. Because fair use is such a gray area and carries real consequences, it’s wise to talk to a copyright attorney if you plan to use third-party material often. The attorneys on Contracts Counsel would be happy to assist.

Randy M.

Answered Sep 8, 2025

An indemnification agreement signed under duress may not be enforceable, but whether it can be voided depends on the specific facts of your case and the law in your jurisdiction. Contract law requires voluntary consent. If consent is obtained through coercion, the agreement is generally considered voidable by the party placed under duress. Legal Standard for Duress Courts recognize two main forms of duress. Physical duress involves threats of bodily harm and is the clearest ground to void a contract. Economic duress occurs when someone is pressured into signing due to wrongful or coercive economic threats. The threat of termination can sometimes qualify, but courts apply a high standard. They will look at factors such as whether you had any reasonable alternatives, whether the employer acted in bad faith, and whether the circumstances left you with no meaningful choice but to sign. For example, if you were told you’d be fired unless you signed immediately, with no chance to review the document or seek advice, that kind of artificial urgency could support a duress claim. On the other hand, if you were given time to consider the agreement and could have reasonably sought other employment, courts are less likely to find duress. Employment-at-Will Context Most states follow the at-will employment doctrine, which allows employers to terminate employees for almost any reason that is not illegal. Because of that, courts often treat workplace ultimatums as business pressure rather than wrongful coercion. However, the doctrine doesn’t give employers unlimited power. If the termination threat was used specifically to force you to assume liability for risks the employer is legally responsible for, that can be considered improper and may render the agreement voidable. Shifting Liability to Employees Indemnification clauses in employment contracts are closely scrutinized because employers generally bear the legal duty to maintain safe workplaces. Federal law under the Occupational Safety and Health Act requires employers, not employees, to ensure workplace safety. Courts in many states have refused to enforce agreements that shift liability for workplace accidents from the employer to the employee, especially if the employer is in a better position to insure against those risks. For example, California Civil Code §1668 voids contracts that exempt a party from responsibility for violations of law or duties owed to the public. Similar public policy principles apply in other states. Practical Challenges Even if duress can be established, you may still need to demonstrate that the indemnification terms themselves were unreasonable or unconscionable. Courts will often look at whether the agreement was one-sided, whether you had a meaningful opportunity to negotiate, and whether the employer sought to impose obligations that are inconsistent with public policy. Next Steps If you’re facing liability based on this indemnification clause, it’s important to preserve all evidence of how the agreement was presented to you. Keep records of emails, conversations, or witnesses that can confirm the circumstances of the signing. An employment or contract attorney in your state can evaluate whether the clause is enforceable, raise duress or unconscionability as defenses, and, if necessary, argue that public policy prevents shifting liability to you. On Contracts Counsel, you can connect with experienced contract attorneys who can review your agreement, consider the circumstances surrounding it, and guide you on your next steps.

Randy M.

Answered Sep 6, 2025

If you're planning to form a corporation in California in 2025, it's important to get every step right, from your initial filings to your long-term compliance obligations. The process itself is well-structured, but both federal and state-level rules have shifted in ways that make the details a bit more complex than they used to be. Let’s walk through what you need to know, one step at a time, based on the latest requirements and guidance. Getting Your Corporation Off the Ground Start by choosing a corporate name that meets the state’s legal requirements. That means it needs to include a word like “Corporation,” “Incorporated,” “Corp.,” or “Inc.” and it must be clearly different from any name already registered with the California Secretary of State. You can reserve a name for 60 days if you need time, but most business owners move straight to filing. Once you’ve confirmed your name, the next step is to file your Articles of Incorporation using Form ARTS-GS, which is the standard form for general stock corporations. The filing fee is $100, and you have the option to file online through the BizFile portal or submit it by mail. After your articles are filed, you have 90 days to submit your initial Statement of Information using Form SI-200. This form provides the state with key details about your corporation, including your business address, officers, directors, and your chosen registered agent. There's a $25 filing fee. Going forward, you'll need to file an updated version of this form annually (Form SI-550) within the six-month window around your incorporation anniversary. If you miss it, you could face penalties or even suspension of your business status. Internally, your corporation is required to adopt bylaws. You don’t file these with the state, but under California Corporations Code §212, you must have them on file at your principal office. Your bylaws should explain how your corporation will operate. That typically includes how meetings are conducted, officer roles, voting rights, and how stock is issued. At your first board meeting, you should formally adopt the bylaws, appoint officers, approve the issuance of shares, and establish a corporate records book. Keep organized copies of your board minutes, stock ledger, and bylaws. Even if you’re the only shareholder, this is a key step to preserve limited liability and maintain corporate formalities. You’ll also need to get an EIN from the IRS. It’s free and available online, and you’ll need it to open a business bank account, file taxes, and hire employees. Depending on what your business does and where it’s located, you may also need a seller’s permit from the California Department of Tax and Fee Administration, along with city or county business licenses. The CalGold website is a good place to find out what permits apply to your specific situation. Taxes and Ongoing Corporate Duties All California corporations have to pay an annual minimum franchise tax of $800, as outlined in Revenue and Taxation Code §23153. However, if your corporation is formed in 2021 or later, you're exempt from that tax in your first taxable year. That exemption doesn’t apply to LLCs, since the first-year waiver expired back in 2023 and hasn’t been renewed. There’s also something called the 15-day rule. If you form your corporation during the last 15 days of the calendar year and don’t do any business during that time, you might be able to avoid the franchise tax for that year altogether. This rule is found under Revenue and Taxation Code §23151.5 and only applies if your corporation uses a calendar fiscal year. If you're forming your entity late in the year, timing your filing could make a financial difference. On the compliance side, California corporations are required to hold annual meetings for both directors and shareholders. You also need to document those meetings with written minutes. This applies even if you’re the only person involved. A lot of solo founders skip this step, but that can become a serious issue during audits or lawsuits. If you don’t follow these basic corporate formalities, a court could decide to disregard your limited liability protections. Where Things Stand with Federal Beneficial Ownership Rules As of March 2025, domestic corporations are no longer subject to federal Beneficial Ownership Information (BOI) reporting under the Corporate Transparency Act. FinCEN issued an interim final rule on March 26 that revised the definition of “reporting company” to exclude entities formed in the U.S. or any U.S. state. Before that change, most newly formed corporations and LLCs were required to report their beneficial owners within either 30 or 90 days after formation. If you're forming a California corporation today, you do not need to file a BOI report under federal law. That said, keep an eye on this area, because rules can change quickly. There’s always a possibility that a future administration could reverse or revise the rule. Separately, California is considering its own version of a corporate transparency law. Senate Bill 1201 would require corporations and LLCs formed or registered in California to disclose beneficial ownership information to the Secretary of State. Some of that data could be made publicly available. As of now, the bill has passed the State Senate and is pending in the Assembly. If enacted, it would go into effect on January 1, 2026, so there’s currently no state-level BOI filing requirement in California. Optional Elections and Strategic Decisions If you’re thinking about electing S-corporation status, keep in mind that this is a federal tax election made by filing IRS Form 2553. It affects how your business is taxed but doesn’t change your legal structure under California law. S-corporations are pass-through entities, meaning profits and losses are reported on shareholders’ personal tax returns. This can help you avoid double taxation, but there are restrictions. You can’t have more than 100 shareholders, and only certain individuals and trusts qualify. You also can’t issue multiple classes of stock. S-corps can make a lot of sense for small business owners who want to minimize tax liability and don’t need venture capital. Just be sure to talk it through with a tax advisor to see if it fits your situation. Some business owners consider incorporating in states like Nevada or Delaware, thinking they’ll benefit from lower taxes or business-friendly laws. That approach only works if you're actually doing business in those states. If your operations, employees, or clients are based in California, you’ll still need to register as a foreign corporation in California and pay the franchise tax anyway. For most small or local businesses, the added paperwork and costs of out-of-state registration don’t offer much real advantage unless you're planning to scale nationally or raise funding. Most legal issues that trip up corporations down the line stem from skipped formalities or missed deadlines. With solid records, clear bylaws, and a calendar for required filings, you’ll be in good shape. If you need to draft internal documents or resolve formation questions, it’s worth getting those answers early rather than cleaning up mistakes later. The lawyers here on Contracts Counsel would be happy to help!

Randy M.

Answered Sep 5, 2025

When you're thinking about entering into a business partnership, a Due Diligence Report isn’t just a formality. It’s your insurance policy. Think of it like hiring a private investigator to dig into every part of your potential partner’s business, especially the parts that might not show up until it's too late. Done right, due diligence covers four key areas: financial health, legal status, operational strength, and market reputation. Let’s Talk Money First Financial due diligence isn’t just about checking a few profit-and-loss statements. You want to understand how money really flows through the business. That means looking at cash flow over a few years, checking whether their customers actually pay on time, and digging into outstanding debts, including any personal guarantees the owners have signed. For example, they might look profitable on paper, but if their top clients delay payments or argue about invoices, cash flow could be a real problem. You also want to uncover liabilities that don’t show up on the balance sheet. Pending lawsuits, warranty obligations, or environmental cleanups can quietly become your problem once you're tied together. And taxes? Those are non-negotiable. Unpaid payroll or sales taxes can turn into personal liability in many states. That’s not something you want to inherit. Legal and Regulatory Risks This part is about making sure the business is actually in good standing and that nothing in their legal structure or contracts could come back to bite you. You’ll want a thorough review of any ongoing litigation, along with a close read of their major agreements. Some contracts might have clauses that restrict operations or create extra obligations you weren’t expecting. Employment agreements can be especially tricky. Non-compete clauses or change-of-control terms might trigger bonus payouts or resignations if ownership shifts. Licensing is another area to watch, especially in regulated industries. Operating without a valid license can shut a business down immediately. And if the company claims to own valuable intellectual property, a good due diligence process will verify those claims through proper trademark and patent records. Next, Take a Hard Look at Operations This is where you figure out whether the business can actually deliver what it promises. Who are the key players? Are they under contract? What happens if they leave? You also need to understand the supply chain. If the business relies heavily on a single supplier, that’s a serious vulnerability. Don’t forget the tech. Many businesses run on outdated systems that won’t integrate with yours or scale with growth. Fixing that after the deal is signed can get expensive quickly. Reputation Matters, Too The company might look solid internally, but how does the market see them? You’ll want to assess their competitive position and whether their revenue depends heavily on just one or two customers. If 60 percent of their income comes from one account, losing that relationship could collapse the whole operation. You should also review their online footprint, compliance history, and any bad press. If their name is tangled in negative headlines or public disputes, it could affect your brand just by association. What Do You Do with All This Information? Use it to shape your negotiations. If financials are shaky, you might want the owners to personally guarantee certain obligations or ask for monthly reporting. If litigation is pending, you can negotiate indemnification clauses that protect you if things go sideways. It also helps you choose the right deal structure. Maybe a joint venture makes more sense than a general partnership. Limiting liability could save you from taking on more risk than necessary. Can You Do This Alone? You can review basic documents yourself, but deeper analysis often needs professionals. A CPA can spot issues in financials and tax returns that might not be obvious at first glance. Employment attorneys can identify red flags in hiring practices or compensation agreements. If the business operates in a complex industry, bring in someone who knows that space. Tech companies especially should get a cybersecurity review. You don’t want to discover a data breach after you sign. What’s This All Going to Cost? Professional due diligence usually runs between $5,000 and $25,000, depending on how complex the business is. But more often than not, it pays for itself, either by uncovering issues that give you leverage or by helping you walk away from a bad deal before it’s too late. Expect the process to take four to eight weeks. You’ll usually get some early insights within the first two, but thorough analysis takes time. Building that into your timeline prevents rushed decisions and costly surprises.