“No prudent individual would make a contract for the construction of a building of any magnitude without incorporating a provision somewhere making specific and definite arrangements concerning extra work.” City Street Improvement Company v. Kroh, 158 Cal. 308, 321 (1910).
Previously on our blog, we discussed how changes to construction contracts are often unavoidable, but that there are limitations to how much a construction contract can change. In this article, we will discuss the proper tool...
In order to build a development, home, or addition that does not comply with local zoning ordinances or restrictions, a property owner or developer must obtain a variance. The exact process of obtaining a variance will vary based on applicable city or county laws, and can vary depending on the scope of the project and the type of variance sought.
For example, there could be different processes or requirements for “residential use” variances versus “residential...
It is prudent for parties to a contract to include a clause that addresses “changed conditions.” A provision in a contract discussing changed conditions should broadly identify altered circumstances from the time the contract was signed and how these new circumstances will be addressed.
A changed conditions clause is frequently found in construction contracts. This is because construction projects rely on so many variables, including weather, labor, and materials, that can be subject to unpredictable...
A flow-down clause (also referred to as a pass-through or conduit clause) is usually found in a construction contract and provides that subcontractors will be bound to the general contractor in the same fashion as the general contractor is bound under its contract with the property owner.
Flow-down provisions are important to protect parties to a construction contract by spelling out that a subcontractor's obligations to the general contractor are identical to the ones a...
Varying circumstances may require parties to a contract to modify their original agreement. For example, contract modification may be necessary if parties want to extend a contract, change its duration, alter the quantity of goods to be sold or delivered, change a delivery time or place, or change a payment amount or type.
Parties typically can modify a contract at any time, as long as all the parties agree to the changes. Minor changes in a...
A sole proprietorship is the most common business form because it is simple to establish and easy to maintain. For the same reasons that it is easy to start a sole proprietorship, and dissolving a sole proprietorship is relatively simple as well. If you own your own business and run it as a sole proprietorship, you can close your business in a few simple steps.
Because only one person can own a sole proprietorship, dissolving one is...
The procedures for compensating a corporate officer and setting corporate officer compensation will depend on the type of business entity in operation, the industry, the entity’s profitability, and the corporate bylaws and/or operating agreement. In general, corporate officer compensation is permitted so long as it is “reasonable” for their efforts in carrying on a trade or business. In such cases, a corporate officer is often considered an employee of a corporation, and is paid as...
If a party was dishonest about a material fact during the drafting process of a contract, the other party may be able to take the contract to court and argue that it should be rescinded, or cancelled, due to misrepresentation. Moreover, if the honest party performed the contract because he, she, or it justifiably relied on the misrepresentation in a contract of material fact, he, she, or it may be able to collect damages...
Unlike patents and trademarks, trade secrets are protected without any procedural formalities associated with the benefits of registration with a government agency. The benefit to this is that a trade secret can be protected for an unlimited period of time and requires no public disclosure. The downside is that defining and protecting a trade secret can be trickier.
There are different definitions of what constitutes a “trade secret.” California law has adopted the Uniform Trade Secrets Act definition,...
“Economic” Shareholder Rights
Shareholders invest in corporations primarily for economic gain or profit. The two main ways shareholders can profit from a corporation are by receiving distributions of the company’s profits and by selling all or part of their interest in the corporation. These correspond with the two main “economic” shareholder rights: the right to receive dividends and the right to sell shares. Notably, shareholders only have the right to receive dividends as they are declared...
