What did your lawyer just say?

Do you understand what your lawyer just said?  No?  Can your lawyer explain to you those complicated terms in the contract they just drafted for you?  No?

Well, if you can’t understand your lawyer and your lawyer can’t explain to you what they mean, then I think there is a huge problem.  Maybe the “lawyer talk” is too complicated and maybe only lawyers are the ones who should understand them.  Definitely not:  I think we all deserve to understand.

Our firm believes in understanding what you are signing, and if you can’t understand what we have drafted for you, then we need to fix our drafting policies.

Ever heard of K.I.S.S.”?  I don’t mean that awesome band from the 70’s (oops, how old am I anyways), but the acronym for “Keep It Simple Stupid”.   I remember, especially in college, professors reminding us all the time to K.I.S.S.  I find myself muttering it under my breath when I’m drafting and reviewing just to remind myself.   In our office, the drafting is done so that everyone can understand what it is that is being said.  We strive for plain English in everything that we do.  Of course, there are those legal terms that we just can’t get away from, and those standard terms in contracts that must be there, but for the most part, they should be understood.

So if you have to repeatedly ask your lawyer what it is that is meant by something, maybe they need to re-think their drafting practices.

Christine Allan, Law Clerk

callan@andriessen.ca

 

Nothing is More Terrifying Than Being Left in the Lurch

No, we don’t mean the 6 ft 9-inch, awkward, gloomy butler from the Addams Family. We are talking about being left in a financial bind when your commercial tenant, or someone you do business with, decides they no longer intend to keep their part of your business arrangement. Whether it’s defaulting on a lease agreement or failing to pay invoices, you or your business’ ledgers could be left in the red. Terrifying, we know!

Well, from reading last week’s post entitled “When do you need to sue?” you should already know that our firm encourages clients to move quickly. Don’t delay in starting a legal claim for repayment. While we already warned you about the ghoulish two-year limitation deadline you have to bring your claim, there is one more concern to keep in mind when looking for repayment.

A growing trend among corporate tenants is to default on their lease agreement or renege on invoices, declare bankruptcy, and set up a new corporation. Even if the court finds in your favour, the old corporation can show that it now has no assets to pay out – having already moved all its assets into a newly incorporated business. So, while you may be left with a successful court order in your hand, your pockets may be empty. To our firm, this is a scarier scenario than being a resident on Elm Street.

Don’t let this nightmare situation be your realty.

We encourage our clients to act right away, before the other party has a chance to hide their assets and avoid repayment.

We strike while the cauldron’s still hot and so should you!

Robin K. Mann, JD,   Associate Lawyer

rmann@andriessen.ca

When do you need to Sue?

When you are owed money for your services or products, how long do you wait until you sue a customer who doesn’t pay?  Did you know that you only have two years from the date that you are owed your money to do so, and if you don’t, you’re out of luck?

The Limitations Act in Ontario gives parties two years from the date they’re owed money to sue for that money back.  This was done partially so that the Courts would not be bombarded with older claims.  Also, as time passes, people’s memories fade and facts may be forgotten, or even evidence misplaced or lost.

The only time that a debt that is older than two years can be sued on is if the debtor acknowledges the debt or makes a payment.  Then your two-year clock starts again.

So how long should you wait before you sue?  That is ultimately up to you, but you shouldn’t wait long.

At our Firm, our 30-60-90 Sue™ program allows our clients to create easy procedures to help them get paid.  In a nutshell, here’s how it works:

After thirty days an invoice is due, send your customer a friendly reminder that you expect to get paid.

After sixty days, that previous friendly letter should now be a firm one, outlining any accrued interest and that the amount is due immediately.

After ninety days, give them just five days to pay, failing which you will sue them.

Still didn’t get paid?  Sue.

And it didn’t take two years to do it.

You did the work.  Don’t wait two years to get paid because you deserve to get paid now.

Murray Brown, Paralegal

mbrown@andriessen.ca

The Night Before Legal Pot in Canada

‘Twas the night before legal pot and all through the nation,

Big law firms were churning out Cannabis Policies and charging a fortune.

When what to small businesses’ eyes should appear, but a law  firm more practical,

They’ll take it from here.

 

OK, so we’re not poets, but honestly, all of the dramatic emails some law firms are sending around regarding the impact of legalization of recreational Cannabis is a bit much.

If your business already has a written Drug & Alcohol policy, then you’re likely already well covered in the workplace.  You are not allowed to work drunk, similarly, you are not allowed to work high.  It’s not rocket science.

Some firms are suggesting that employers require employees to advise if they are using medical Cannabis.  Really?  Are you also going to ask everyone to disclose when they are on Oxycotin, Percocet or a litany of other drugs that you’re not allowed to drive or use heavy machinery with?  The short answer is no, you’re not and medical Cannabis is a prescribed drug, just like the two others I named.

Some employers are concerned they need specific policies saying you cannot drive a company car while high on Cannabis.  Well, the Highway Traffic Act kind of already says that people – see what I mean about drama?

So.  To recap: legal pot does not mean it is legal to drive or work high.

Inga B. Andriessen, JD

iandriessen@andriessen.ca

 

 

Shareholders’ Agreements. Do you need one?

Usually,  the only time that the answer will be no to the question in the title of this Blog is when there is only one shareholder.

Once your company has issued shares beyond the one shareholder (presumably you), you should have a shareholders’ agreement.  I know what you are thinking, you are only issuing to family members so it’s not necessary.  Always plan for the worst.

A shareholders’ agreement provides for the management and financing of the corporation, and also deals with the rights and obligations of the shareholder amongst each other.  Every shareholders’ agreement is drafted to each particular situation.

For example, if the shareholders are employees of the corporation, it will map out what happens to the shares of that employee if they are no longer employed by the corporation.

Additionally, if shareholders are family members, that shareholders’ agreement will include specific provisions geared towards martial breakdown, and family involvement in the company.

Even though the agreement is tailored to each particular situation, there are standard terms which will be found in all shareholders’ agreements, such as how to transfer shares, how to pay dividends, financing and dealing with directors and employees.  For this reason, it is important that lawyers are involved when drafting these agreements, and also that each party to the agreement has an opportunity to review it with their own lawyers.

So when we ask you if you would like a shareholders’ agreement prepared, you might want to think twice before saying “maybe later”, because sometimes “later” is already too late.

Christine Allan, Law Clerk

callan@andriessen.ca

Before You Sue, Make Sure Your Hands are Clean

No, the Blog title does not mean you need to take extra care scrubbing your hands before going to Court, though we do recommend Hand Sanitizer after going through Court Security.   This is about the legal concept of “Clean Hands”.

When I took my first college course on litigation well over a decade ago, one of the first doctrines we learned about was the doctrine of “clean hands.”  What does that mean?   The doctrine of clean hands, in a nutshell, is a defense that bars relief to a party who has engaged in bad behavior relating to the subject matter of their claim.

I was recently involved in a matter where our client was sued for failing to remove a payment on the date outlined in the contract, resulting in the plaintiff’s account being charged NSF fees.

They sued for what they claimed was irreparable harm to their credit, which was never established.

I argued (successfully) that the plaintiff is not entitled to damages resulting in the NSF charges, because the attempt to withdraw any payment was after the date it was due, and if the payment did not come out on the date it was supposed to, a reasonable person would simply leave the money in their account until it came did.  I suggested that the money was never in the account in the first place, and what caused the plaintiff’s damages was their failure to ensure the payment was in their account.

I argued that the plaintiff did not come to court with “clean hands” because the NSFs were not caused by our client attempting to withdraw the payment on a date other than what was in the contract, but because of the plaintiff not having the funds in the account in the first place, which resulted in any alleged irreparable harm to their credit.

The plaintiff failed to take responsibility for their actions, and the Court was not sympathetic to them.

It is important to be mindful of your actions before proceeding to Court to make sure that you come to Court with clean hands to ensure your actions won’t be used against you.

Murray Brown, Licensed Paralegal

mbrown@andriessen.ca

 

The Good Lawyer – Part 2

Here we are again for another installment of “The Good Lawyer” …Yes, the wait is over!

Last time, we began our discussion on what it takes to be a great lawyer by looking at the importance of communication.

Today’s trait of choice is …RESOURCEFULNESS.

Most people only need a lawyer when they are having legal problems. Lawyers are the ones you expect to have all the answers to your legal troubles. Some of you may be surprised to know this, but a great lawyer isn’t one who knows all the answers, a great lawyer is someone who knows where and how to look for the answers. Sometimes this means hitting the books and burning the midnight oil, other times it means reaching out to a network of experts. Yes, in this case, connections do matter!

Being resourceful also means looking at a legal problem and carving out a unique solution. At our firm, we recognize that all legal problems are different and that standard cookie-cutter approaches are not the way to go. Thinking outside of the box is key.

Resourcefulness in a lawyer should take them beyond just providing legal services. A resourceful lawyer is someone who doesn’t blindly take instructions from their clients but instead, where appropriate, offers creative alternatives that better serve their client’s needs.

To sum up, when sizing up your legal representation, remember: truly resourceful lawyers have great research skills, connections to a network of helpful experts, and creative approaches to handling your legal problems.

Stay tuned for Part 3 of our segment on “The Good Lawyer.”

Robin K. Mann, JD

Associate Lawyer, rmann@andriessen.ca

The Cost of Being your Own Lawyer

Some Blog topics come up over and over again on our site.  It’s not because we’ve run out of ideas – believe me WE have ideas.  It’s because the issue keeps coming up over and over again.

Recently, we helped a client with a lawsuit involving a contract they drafted without a lawyer’s input.    We won.  The client was happy.

The client then returned with a new lawsuit involving another contract they drafted without a lawyer’s input.  This contract was drafted during the timing of the first lawsuit.  The client knew better.

The client knew that they paid us approximately $4,000.00 to deal with the litigation and they knew we would have charged $ 750.00 to review their contract.   You don’t need to be a math major to recognize litigation costs a lot more than drafting work.

A different client recently came to our firm, finally giving up trying to run their own Small Claims Court collection files.  They realized that sitting around, waiting to be heard by a Judge was taking away from their ability to conduct their business.  No kidding.  If you’re not a paralegal or lawyer, you have better things to do with your time than sit around waiting for Court.

In this day and age where many business owners are willing to spend money on expensive cars and luxurious office furniture, maybe it’s time to take a step back and realize that you can afford a lawyer if you choose to do so.  It’s cheaper in the long run.

Inga B. Andriessen JD

iandriessen@andriessen.ca

Always Forward, Never Straight

The title of today’s Blog is attributed to many people, so I’m not sure who to actually credit for it.  I personally learned of it recently when Lance Armstrong’s wedu.team adopted it as one of their inspiring quotes.   As applicable as the quote is to endurance sports, it’s also applicable to business.

Now I know this sounds philosophical, but stick with me for a paragraph or two longer and we’ll get back on “legal” footing.  A business that is growing will not always choose to stick to the same plan and just move forward, rather, it will explore a side issue that might take it in a different, but still forward direction.

As long as your business is always moving forward, you’re going in the right direction.  This is not to say, don’t look back.  The adage if we don’t learn from our mistakes, we’re bound to repeat them, applies even more so in business than it does in history.

When it comes to the legal aspects of your business, it’s important you check in regularly with your lawyer to ensure that forward path you are on is still compliant with the law.  In our firm, we do annual checkups with our clients – these are phone calls where our clients update us on how the past year was and their plans for the next.  This allows us to let them know of changes in the law that might impact them and help them keep moving forward.

Does your lawyer check in with you annually?  Why not?

Back to moving forward !

Inga B. Andriessen JD

iandriessen@andriessen.ca

 

Always Read the Terms of your Contract

When you are running a business and you require the services of another company, most likely that company will have you enter into a contract with them.  Before you sign that contract, always read the terms and make sure you understand them.  If you don’t – call us, and let our firm have a look at the contract for you.

Some contracts for services have a semi-automatic renewal term.  What does this mean?  This means if you do not terminate the contract prior to the expiration of the initial term, the contract will then renew for an additional term, usually the same amount of time as the original term.

If you do not provide proper notice under the terms, you can be on the hook for the full amount of the term of the contract if you want to terminate it.

In 2017, the Supreme Court of Canada considered the issue of semi-automatic renewal provisions in contracts, and the Court found that if the term is not ambiguous, the contract will renew in accordance with the terms unless proper notice under the terms is provided.

So, if the value of the term of the Contract is $2,000.00 and you fail to give proper notice or notice at all, and you still wish to terminate that contract, you are obligated to pay that service provider $2,000.00, whether or not you continue with the services under the contract or not.

Always read the fine print of your contracts.  Diarize when your contracts end, and more importantly, diarize the earliest date which you must provide notice to terminate your contract(s) so that you do not end up paying more than you have to.

Murray Brown, Paralegal

mbrown@andriessen.ca