Recent Answers to New York Law Questions

Randy M.

Answered Sep 14, 2025

Yes, you can and should include clauses in an Intellectual Property License Agreement that protect your rights as the licensor. A license agreement is your main tool for controlling how your software is used, setting boundaries for your clients, and limiting your financial exposure. The key is to draft it in a way that leaves no doubt about what rights are granted, what’s restricted, and what happens if there’s a breach. Grant of License Start with a clear license grant. Spell out that you’re giving the client only limited rights, not ownership. Most licensors define the license as non-exclusive, non-transferable, and revocable if the client doesn’t follow the terms. For example, you might allow a client to use the software only for its internal business operations, and only on a set number of machines. It’s equally important to list what the licensee cannot do, such as reverse engineering, modifying, sublicensing, or providing the software to third parties. Intellectual Property Ownership Reinforce that you retain all ownership rights in the software and any related intellectual property. A simple but strong statement is that you hold all right, title, and interest in the software, and the client only receives a limited right to use it under the agreement. This prevents confusion between a license and a sale. You can also require the licensee to notify you if they discover third-party infringement and confirm that you alone have the right to pursue action against infringers. Confidentiality If you’re providing source code, algorithms, or other sensitive information, a confidentiality clause is essential. Define confidential information broadly to include not just the software itself but also any documentation or business information you share. Require the client to protect that information with at least the same care they use for their own confidential material, and make the obligation survive termination of the agreement. Termination Every strong license has a termination clause. Termination for cause should allow you to end the agreement if the client fails to pay, violates the license scope, or breaches confidentiality. Many agreements include a short cure period, such as thirty days, for the licensee to fix the breach before termination takes effect. Spell out the consequences of termination: the licensee must stop using the software immediately, return or destroy all copies, and certify that they’ve complied. Without this, you risk losing leverage if the relationship breaks down. Payment Terms Protect your revenue by making payment terms clear. Define license fees, support or maintenance fees if applicable, the payment schedule, and penalties for late payment such as interest. Courts generally enforce these provisions as long as they’re reasonable. Disclaimers and Limitation of Liability These clauses protect you from lawsuits if things go wrong. A limited warranty might cover basic performance for a set time, but beyond that you should disclaim all other warranties. Standard language is that the software is provided “as is” and you disclaim implied warranties of merchantability and fitness for a particular purpose. To limit your exposure, cap liability at a defined amount, often the fees paid by the licensee in the previous twelve months, and exclude liability for indirect or consequential damages such as lost profits. Courts usually enforce these limits, except in cases of fraud or intentional misconduct. Audit Rights If your pricing model depends on the number of users or installations, an audit right is valuable. This allows you to check, on reasonable notice, that the licensee isn’t exceeding their rights. For example, you might reserve the right to inspect usage records once a year during normal business hours. Governing Law and Dispute Resolution Designating which state’s law governs and how disputes are resolved reduces uncertainty. Many licensors choose their home state’s law and either local courts or arbitration for disputes. Remedies Make sure your agreement lets you seek injunctive relief if the licensee misuses or discloses your software. Monetary damages often aren’t enough to protect intellectual property, so courts will enforce contract terms that authorize immediate injunctive relief. Protect Your Software with Legal Guidance When you’re licensing valuable software, the details in your agreement can make the difference between real protection and unnecessary risk. The lawyers on Contracts Counsel are available to draft, review, or negotiate a license that secures your rights and keeps your business protected.

Randy M.

Answered Sep 13, 2025

Thinking of starting a business with a partner? Forming a multi-member LLC might be one of the smartest legal moves you make. It offers liability protection, tax flexibility, and control over how the company operates, without the rigid structure of a corporation. But getting it right means understanding both the benefits and the setup process. The main draw is protection. An LLC creates a legal barrier between your personal assets and the business. So if your company is sued or defaults on a loan, your house and savings are usually off-limits. Just know that this protection isn’t automatic. If you mix personal and business funds, fail to properly fund the business, or commit fraud, a court could still hold you personally liable. From a tax perspective, the setup is appealing. Multi-member LLCs are generally taxed as partnerships. That means the business itself doesn’t pay federal income tax. Instead, it files Form 1065 and issues each member a Schedule K-1 that shows their share of the profits or losses. You include that on your personal return. This approach helps you avoid the double taxation that corporations face. If the business generates strong profits, you can also consider electing S corporation status. That may help reduce self-employment taxes, though it comes with added responsibilities. Management is another area where LLCs shine. You can run the business yourselves through a member-managed structure or designate someone else to handle daily operations in a manager-managed model. For example, a small professional practice may work better with member control. In contrast, a real estate investment business with passive owners might benefit from a designated manager who handles everything day to day. You also won’t have to jump through the usual corporate hoops. LLCs aren’t required to hold annual shareholder meetings or maintain formal bylaws. Most states only ask for a simple annual or biennial report and a filing fee. Then there’s credibility. Including “LLC” in your business name shows clients, lenders, and partners that you’ve formed a recognized legal entity. Banks will usually require it to open a business account or approve financing. To form your LLC, you’ll start by filing Articles of Organization with your Secretary of State. This document covers basic information such as the business name, address, registered agent, and sometimes member or manager details. Fees vary widely but typically range from $50 to $500 depending on your state. You’ll also need an operating agreement. Some states like New York require one, but even where it’s optional, it’s strongly recommended. Many banks won’t open an account without it. More importantly, the agreement defines how your business works. It should cover ownership shares, capital contributions, how profits and losses are divided, voting rights, member roles, and what happens if someone leaves or wants to sell their share. Without it, state law will control these issues by default, which may not align with your goals. Every LLC must name a registered agent. This is the person or service that receives legal and government documents for the business. If you have a physical address in the state, you can serve as your own agent. Otherwise, hiring a registered agent service is a simple solution. You’ll also need an EIN from the IRS. Even if you don’t have employees, the IRS requires a Federal Tax ID for multi-member LLCs. You’ll use it for filing taxes, issuing K-1s, and opening financial accounts. A few important things can catch new business owners off guard. Certain states have unique requirements. New York and Arizona, for example, require you to publish a notice of formation in local newspapers. California charges an annual franchise tax of at least $800, no matter how much income your business makes. Delaware and Nevada are popular for their business-friendly laws, but they often come with higher annual fees. Checking your state’s rules ahead of time is essential. Taxes can also surprise people. Members usually pay self-employment tax on their share of the LLC’s income. That includes both the employer and employee portions of Medicare and Social Security. If your business is profitable, this can add up fast. In that case, an S corp election may reduce your tax burden. Just be aware that it requires payroll and a reasonable salary for each active owner. Finally, to keep your liability protection intact, treat the LLC as a separate entity at all times. That means using a business bank account, signing contracts in the company’s name, and documenting major decisions. If you treat the company like an extension of your personal finances, courts may too. Setting up an LLC isn’t difficult, but the details matter. The operating agreement and tax setup in particular deserve professional input. An attorney can create a customized agreement that fits your situation, and an accountant can help you choose the right tax path. Doing it right on the front end can save you from problems down the road. The business attorneys at Contracts Counsel are here to guide you through the entire LLC process so you can focus on growing your business with confidence.

Randy M.

Answered Sep 10, 2025

If your caterer has stopped responding and missed key confirmations as your event approaches, you may be within your rights to cancel the agreement. Under contract law, when one party clearly fails to meet essential obligations, or shows signs they won’t follow through, the other party may be released from their responsibilities. When You Can Cancel 1. Material Breach. If your caterer isn’t communicating and you can’t finalize your menu or logistics, that’s more than a minor problem. It may qualify as a material breach—meaning they’ve failed to deliver something critical to the agreement. In catering, timing and communication are central. If they’re missing in action, you may have grounds to walk away. 2. Anticipatory Breach. If it appears your caterer isn’t going to show up—such as ignoring multiple follow-ups as your event nears—you don’t have to wait for them to officially back out. Their silence may count as an anticipatory breach, which allows you to end the contract and secure a replacement in advance. Review the Agreement Before taking action, read the contract closely. Pay attention to: • Termination clauses: Are there specific steps or notice rules you need to follow? • Cure periods: Do you have to give them a certain number of days to fix the issue? • Refund or cancellation policies: Do they address partial payments or deposits? • Force majeure clauses: These usually cover uncontrollable events like natural disasters, not a vendor’s failure to communicate. Your Next Steps • Keep detailed records Save emails, texts, and call logs, noting dates and unanswered messages. This creates a paper trail that supports your decision if challenged. • Send a demand for assurance Before canceling, send a written request asking them to confirm they’ll perform. Be specific about what they’ve failed to do, set a 24- to 48-hour deadline if the event is near, and state that if they don’t respond, you’ll treat it as repudiation. This process reflects the concept of “adequate assurance” under UCC § 2-609, often applied to service contracts. • Provide formal notice If they don’t respond, send a termination notice in writing. Refer to their lack of performance or failure to reply, and follow any notice requirements in the contract—such as sending it by certified mail. • Find a replacement You’re expected to minimize your losses, so line up another caterer as soon as possible. If the replacement costs more, you may be able to recover the difference, provided the cost is reasonable. Potential Remedies If termination is justified, you may be able to recover: • Deposits or payments already made • Additional costs from hiring a replacement caterer • Other foreseeable expenses, such as venue penalties or last-minute rental fees A Word of Caution Your ability to recover money depends heavily on the contract language. A “non-refundable deposit” clause may complicate refunds, though you can argue that keeping the deposit is unfair when the caterer failed to perform. If significant amounts are at stake, consult a lawyer. Outcomes depend on local law and the specifics of your agreement. If you need guidance, the attorneys at Contracts Counsel can help you review your contract and advise you on your next steps.

Randy M.

Answered Sep 8, 2025

Here’s how I’d approach structuring an Employee IP Agreement if your goal is to protect your company’s intellectual property without running into enforceability issues under U.S. law. Covering Core IP OwnershipCovering Core IP Ownership First, start with a “work made for hire” clause. It’s a good foundation, but it’s not enough on its own. Under U.S. copyright law (17 U.S.C. § 101), only certain types of work qualify as “made for hire,” and many employee-created assets may fall outside that definition. So you’ll want to pair it with a present-tense assignment clause. Be specific here. Use language like “the employee hereby assigns” rather than “will assign.” That slight shift matters. It ensures the company owns the rights immediately when the work is created. Also, define “intellectual property” broadly. Don’t just list patents or source code. Include software, algorithms, documentation, trade secrets, databases, and anything tied to your business. The scope should clearly include anything created during work hours, using company tools or systems, or connected to your current or future business operations. Disclosure and Documentation You’ll want to require employees to promptly disclose any inventions or creative works they produce. Put it in writing. This gives your company the chance to evaluate whether the work is covered under the agreement. It’s also a good idea to require them to maintain proper documentation. Accurate records can make a real difference in patent filings or if a dispute ever comes up. Pre-Existing IP and Legal Carve-Outs There should be a section where employees list anything they’ve developed or own before joining the company. If they don’t list anything, the agreement should include language confirming they’re representing that no such prior inventions exist. This prevents claims down the road that something developed during employment was actually theirs from before. Now, depending on your state, you may need to include statutory carve-outs. California, Illinois, and Washington all have laws that limit how far IP assignment clauses can go. For example, in California, you’re required to carve out inventions developed entirely on the employee’s own time, without company resources, and unrelated to your business (see California Labor Code § 2870). Without that carve-out, your entire assignment provision could be thrown out. Confidentiality Obligations Make sure there’s a strong confidentiality section. This should cover source code, technical documentation, designs, product plans, customer lists, financial data, and anything else proprietary. Make it clear that the obligation continues even after the employee leaves. You’ll also want to require that all company property and digital assets are returned at the end of employment, including devices, credentials, and files. Ongoing Cooperation and Enforcement Mechanisms Include a clause requiring employees to cooperate in IP protection efforts even after they leave. That could mean signing patent paperwork or providing testimony if needed. To make that enforceable, add a power of attorney clause. This gives the company the authority to act on the employee’s behalf if they’re unwilling or unreachable. It’s a simple way to prevent delays when you’re trying to secure or enforce rights. It’s also smart to include a waiver of moral rights where allowed. This is especially useful for creative works and software. It gives the company full freedom to modify or use the work without needing future approval. Legal Remedies and General Terms Be clear that the company can pursue equitable relief, like an injunction, if there’s a violation. Sometimes monetary damages aren’t enough to prevent harm. Include a severability clause so that if one part of the agreement is invalidated, the rest still stand. Don’t forget to specify the governing law and venue for any disputes. As for restrictive covenants, keep in mind that non-compete clauses are unenforceable in California and heavily restricted elsewhere. Non-solicitation clauses may still be allowed, but they need to be narrowly written. You should have your legal team confirm their enforceability based on your state. Finally, think about consideration. For new hires, the job offer itself usually counts. But for existing employees, you’ll likely need to offer something extra, like a bonus or promotion, to make the agreement stick.

Randy M.

Answered Sep 6, 2025

If you're planning to invest in New York real estate with your husband and your brother, forming an LLC is probably the smartest move. It protects each of you from personal liability and keeps the ownership structure clean and manageable. Why an LLC Makes the Most Sense Think of an LLC as a legal shield. If something goes wrong, like someone gets injured on the property or the business gets sued, your personal assets (your home, savings, or personal bank accounts) are generally protected. That protection applies to all three of you equally. It also fits well with your ownership plan. Your brother can own 50 percent, while you and your husband split the remaining 50. Since New York doesn’t treat spousal property as community property by default, you'd each be listed as separate members. You could each hold 25 percent, or adjust that based on how much you're each putting in, whether financially or through work. On the tax side, an LLC is treated as a pass-through entity by default. That means the LLC itself doesn’t pay federal income tax. Instead, profits or losses flow directly to each of you based on ownership percentage, and you report that on your personal returns. This avoids the double taxation you’d run into with a corporation. What to Include in the Operating Agreement This is your internal rulebook. When family is involved, having a clear operating agreement is even more important. It keeps everything on record and helps avoid confusion or conflict down the line. You'll want to spell out everyone's ownership percentages, who’s contributing what — whether that’s cash, property, or services — and what each person is responsible for going forward. Decision-making rules are key here. Will you need unanimous agreement for big moves like selling the property? Can day-to-day issues be handled with a simple majority vote? You’ll also want to decide whether voting power should match ownership percentages or whether each person should get an equal vote regardless of their share. You should also cover how profits will be distributed, who’s managing the property or finances, and what happens if someone wants out. A buy-sell clause is a must. It explains how to value someone’s stake and who has the first right to buy if a member decides to exit or passes away. How to Form the LLC in New York To get started, you’ll need to file Articles of Organization with the New York Department of State. This includes basic information like the LLC’s name (which must include “LLC” or “Limited Liability Company”), its address, and your registered agent. The filing fee is around $200. One thing to be aware of is New York’s publication requirement. Within 120 days of formation, you’re required to publish a notice in two newspapers (one daily and one weekly) in the county where your office is based. This can cost anywhere from $1,000 to $2,000, depending on the county. New York City tends to be the most expensive. You’ll also need an EIN from the IRS. Even if you don’t plan to hire employees, you’ll need one to open a business bank account and file your taxes. Be sure to keep the LLC’s finances separate from personal ones. Commingling funds is one of the quickest ways to lose your liability protection. Why Other Options Don’t Stack Up A general partnership is easy to set up but offers no liability protection. That’s a big risk when you’re dealing with rental property or tenants. Limited partnerships require at least one general partner with full liability, which kind of defeats the purpose of forming an entity in the first place. S-corporations give you liability protection, but they come with tight restrictions. Most notably, profits have to be distributed strictly according to ownership percentages. That can be limiting if, say, one person is actively managing the property and should be compensated differently. C-corporations give the strongest liability protection, but they come with double taxation — once at the corporate level and again when you distribute profits to shareholders. For a real estate investment, that’s usually not worth it. Protecting Yourselves Beyond the LLC Forming an LLC is an important first step, but it shouldn’t be your only line of defense. You’ll want to carry solid insurance coverage, including general liability and property insurance. Many investors also add umbrella coverage (often $1 to $2 million) for additional peace of mind. If you plan to buy more than one property, it’s worth considering a separate LLC for each one. This prevents a legal or financial problem at one property from putting your entire portfolio at risk. It’s more paperwork and a bit more cost, but the added protection is usually worth it for serious investors. Also, stay organized. Even though LLCs don’t require strict corporate formalities, it’s smart to document big decisions and hold regular check-ins with all members. This keeps the business side of things separate from your personal relationships and helps prevent misunderstandings. Why You Need a Lawyer and a CPA Setting up a basic LLC isn’t too difficult, but because this involves family, money, and property, it’s smart to bring in professional help. A business attorney who knows New York real estate can draft an operating agreement that fits your situation and helps avoid trouble later. You’ll also want to talk to a CPA. They can walk you through tax strategies, depreciation, and how to maximize your deductions. If estate planning is something you’re thinking about, this is a good time to start looking at how LLC membership fits into your broader plan for wealth transfer.

Randy M.

Answered Sep 1, 2025

You’ve had enough issues with quality and missed deadlines to know this isn’t something to keep risking. At this point, having a Translation Services Agreement isn’t just a good idea. It’s a necessary layer of protection for your business. This industry runs the full spectrum when it comes to professionalism, and without a contract, you’re basically crossing your fingers and hoping things don’t go wrong. When they do, you’re left with little recourse. WHY THIS MATTERS RIGHT NOW According to the American Translators Association, nearly half of freelance translators don’t use contracts at all. Even more concerning, over 60% don’t have their own terms of service. That’s not just a red flag. It means if you’re not the one setting expectations in writing, you’re probably operating on assumptions. And that’s exactly how you end up dealing with missed deadlines, poor quality, and miscommunication. THE LEGAL BACKBONE YOU’RE MISSING In the U.S., translation is legally treated as a professional service. That means it falls under common law contract rules, not the Uniform Commercial Code, which only applies to goods. Why does that matter? Because services require more specific, clearly written terms to be enforceable. You can technically have a valid verbal agreement, but proving that in court is a nightmare. If a translator misses a deadline or turns in subpar work, your only real protection is a signed contract that outlines exactly what was expected. WHAT YOUR CONTRACT NEEDS TO COVER Performance and Quality Standards You need to spell out what “acceptable work” actually means. That includes accuracy thresholds, how many revision rounds are included, and what happens if the work doesn’t meet the agreed standards. Otherwise, you’ll end up arguing over subjective opinions, which helps no one. Delivery Terms with Teeth Set real deadlines. And don’t stop there. Build in consequences for delays. Instead of vague penalties, which some courts may reject, use liquidated damages clauses that estimate the actual cost of a delay. Or include language that lets you terminate and bring in someone else, with costs passed to the original translator if they drop the ball. Who Owns the Final Product? Here’s where a lot of businesses get caught off guard. Under U.S. copyright law, unless you get a written assignment of rights, the translator, not you, owns the translated content. That “work for hire” line most people throw around usually doesn’t apply to freelance translation. Your agreement needs to clearly say the copyright is being transferred to you, in plain language. Confidentiality Shouldn’t Be Optional Your documents likely contain internal strategy, client data, or proprietary processes. Without an enforceable confidentiality clause, there’s nothing stopping someone from sharing or misusing that information. A strong NDA section is not just smart. It’s basic protection. Payment and Legal Protections Make payment terms clear. Spell out due dates, what triggers an invoice, and how disputes will be handled. And definitely consider a clause that lets the winning side recover legal fees in any dispute. That one sentence can be the difference between enforcing your contract and walking away because it’s too expensive to fight. WHAT TO AVOID Watch out for one-sided indemnification clauses that could make you responsible for things outside your control. And if you’re working through agencies, be wary of payment terms that depend on when they get paid by their clients. That structure pushes all the risk onto you and makes cash flow unpredictable. HOW THIS REALLY PLAYS OUT Sure, contracts are enforceable, but going after freelancers legally, especially those overseas, is expensive and messy. That’s not the point here. The value of a good agreement is that it prevents problems before they start. It attracts more serious professionals, sets expectations from the beginning, and gives you leverage when things slip. THE BIGGER PICTURE More than half of small businesses report vendor or supplier disputes. And poorly managed contracts can drain up to 9% of your revenue. Add in the fact that one in two small businesses has faced IP theft, costing them millions on average, and the need for solid legal agreements becomes crystal clear. WHAT TO DO NOW Start with a solid template, but don’t skip the attorney review. Many attorneys on Contracts Counsel would be happy to assist. You want someone who understands your state’s laws and your business model. It’s a one-time investment that can save you from countless headaches down the road. And honestly, the translators who resist clear, professional agreements are often the ones you don’t want to rely on in the first place. You’ve already seen what happens when expectations aren’t in writing. Now it’s time to protect your company and raise the standard for everyone you work with. A well-drafted agreement doesn’t just prevent worst-case scenarios. It shows that you take your business seriously and expect the same from your translators.