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Monday, December 8, 2014

Legal Advice on Problems in Business Contracts: Strategic Thinking Versus Knee Jerk Reaction

Strategic Thinking / What Does Your Attorney Advise You?

In this video, attorney Jason McGrath discusses how a business law attorney can - or should - handle mistakes and other problems found in contracts. The approach Mr. McGrath discusses is not the obvious one.

Does your business attorney think it through in depth, considering the bigger picture, and employ strategic thinking or just go with the standard, knee-jerk reaction when (s)he renders you advice?



For legal advice on business law and contracts, contact McGrath and Spielberger law firm today.

Sunday, November 23, 2014

Is the Advice You're Getting Specific to North Carolina's Unique Foreclosure Laws?

North Carolina Foreclosures

(Alternative Title: Some Dude in CaliforniaFloridaNevada Wrote it on the Internet, so it Must be Right)

In this video, Jason McGrath, attorney Charlotte NC, discusses the fact that many persons involved in a foreclosure or mortgage loan dispute, or involved in a mortgage relief / loss mitigation situation, turn to the internet or some "unofficial source" for information and/or sign up with some out of state organization or "law firm" for help. So while your Florida based "mortgage relief specialist" or your "national network of attorneys" headquartered in California may not (or may) be scamming you, do they actually understand NC's laws and process and customize their advice and services accordingly?

https://youtu.be/XGYYLnoBpqs

Tuesday, September 23, 2014

Are Negative Reviews Really Bad for Business?

Can an unfavorable review impact your business?

If properly handled, negative reviews can provide a business with an opportunity to actually boost its reputation.

With the surge of digital media and the growing use of social media, it has become extremely easy for both businesses and consumers to reach a captive worldwide audience at little to no time or expense.  Social media has helped drive many protests, actions in support, and boycotts in just a small amount of time.  This ease of access and use of social media could severely damage a business’ livelihood if the reviews or messages are negative and not addressed appropriately.

There are several considerations that should be made when deciding whether to respond to a negative review.  For instance,

  1. Does the review contain opinion, “facts,” or both?

  2. Whether to contact the person who wrote the negative review.

  3. Communicating with the company or website which hosts or published the troublesome response.

  4. Publicly responding to negative online reviews.

  5. Turn a negative into a positive, or at least an opportunity.
Another consideration offered by Yelp when deciding whether to respond is to determine if the review contains constructive criticism or is just undeniably negative.  The appropriate response for the business depends on this classification.  If the review is extremely negative and uses colorful language, it may be best to be left alone as nothing constructive could arise when emotions are involved.  When emotions are involved it will be difficult to change the person’s mind or sufficiently correct – in their subjective eyes – the problem.

customer service feedback form, rating, review, average, poor, rubbish, OMG, Call Lawyer
It is also important to look at reviews of other customers.  If there are more positive reviews than negative, the negative may not affect whether a future customer decides to purchase the business’ product or service.  For example, when I am deciding whether to make a purchase, I examine the online reviews.  I look to both negative and positive reviews but I only give sufficient credibility to those reviews that provide constructive feedback instead of generalizations because I want to know if the reviewers’ standards are similar to my own.  Further, some persons are suspicious of any business which has, for example, 20 reviews, all of which are positive, or all of which are “5 out of 5 stars” – that does not seem realistic to many of us.

Once the business determines that the review warrants a response, then a very effective way to neutralize the negativity is to publicly respond to the review.  A public response shows that the business is concerned that the customer was not completely satisfied with the purchase and would like to remedy the situation.  This will show other present and future consumers that the business cares about customer satisfaction and is willing to go to significant efforts to remedy any dissatisfaction.  It also shows that the business knows about the deficiency and the deficiency should be remedied going forward.

In the public response, the business should never get defensive or place blame because no one is perfect and it is impossible to satisfy everyone.  There is always going to be criticism, it is how the business handles the criticism that affects its reputation and possibly its bottom line as well.  Reaching out and offering solutions to customers is a way to not only boost customer satisfaction but it is a way to boost brand loyalty and neutralize any negative reviews.

Additionally, to facilitate helpful reviews, the business could provide discounts, rewards, or other benefits to the reviewers that provide the most comprehensive or helpful information which may benefit future purchasers in making buying decisions.  One way that a business that I have dealt with personally has succeeded in encouraging reviews is by providing the product along with a free sample of other products they supply.  Then, they sent a separate request and asked that I provide an online review and if I was dissatisfied to contact the business immediately so that any problems could be resolved expediently.

All in all, the best way to respond to a negative is with something positive.  There is an old saying which states that “you can attract more flies with honey than vinegar.”  That rings true not only when trying to convince someone to do the things you want them to do, but also to neutralize negative experiences.  The best form of advertising is personal experience and word of mouth (whether verbal or via the internet).  If you can turn someone’s negative personal experience into a positive by remedying the situation, you may have just turned a loss into a gain.

Tuesday, June 24, 2014

(Part 5) 5 Considerations as to Your Business’ Negative Internet Review


As attorneys with a law firm which has a significant online presence, and as lawyers who represent small and medium businesses, we are very much aware of the power of the online review and/or rating given by consumers. In fact, in this day and age, the positive or negative nature of a company's reputation as declared by the internet can make or break your business.

For many businesses, it is almost impossible to avoid at least the occasional negative comment or even merely a lukewarm review. Many times, the information posted online is not accurate, or at least is presented out of context and/or incomplete. All businesses which encounter this face the same question: what can we do about this negative online review?   Hopefully, after you have had a bit of time to think about it, one of your next questions is: what should we do about this negative online review? We have developed a list of 5 key considerations and here is the fifth.

(5) Turn a negative into a positive, or at least into an opportunity. This can't work in all industries or all situations, of course, but what about turning the criticism into a promotional effort? For example, let's consider the complaint of "I had to wait more than 30 minutes for my car to be cleaned at Acme Car Wash." Perhaps the response from Acme is similar to this: "We regret you had to wait so long, but we were simply very busy that day with so many customers who know what a good job we do. Everyone should know that this month we have a 25% discount for our Premium Customer Club memberships, which allow you to make an appointment, among other benefits!"

This creative approach focuses on the positive, while still "apologizing" to the unhappy customer. It might even increase business. Find the silver lining.

Thursday, June 5, 2014

(Part 4) 5 Considerations as to Your Business’ Negative Internet Review


As attorneys with a law firm which has a significant online presence, and as lawyers who represent small and medium businesses, we are very much aware of the power of the online review and/or rating given by consumers. In fact, in this day and age, the positive or negative nature of a company's reputation as declared by the internet can make or break your business.

rating, review, feedback, custom service, service score, business
For many businesses, it is almost impossible to avoid at least the occasional negative comment or even merely a lukewarm review. Many times, the information posted online is not accurate, or at least is presented out of context and/or incomplete. All businesses which encounter this face the same question: what can we do about this negative online review?   Hopefully, after you have had a bit of time to think about it, one of your next questions is: what should we do about this negative online review? We have developed a list of 5 key considerations and here is the fourth.

(4) Publicly responding to the negative online review. Some business owners will post a response if the hosting website allows the same/has a mechanism in place. Again, you would want to be very careful in taking this approach, would want to take numerous deep breaths before writing the response, and would want to have at least one other rational person review your response before submitting. There is a definite split of opinions as to how to execute this approach, and of course each situation can be different. If you are going to respond:

  1. should the response be general or detailed?

  2. should the response be apologetic or more of a rebuttal or defense?

  3. should the response contain the name, or at least the position, of the person writing it on behalf of the business?

  4. should the response invite the complainer to call the business to further discuss?
In my personal experience, most of the responses I see written by business owners are fairly neutral and contain sort of a non-apology apology - you know, the kind that athletes' public relations representatives write for them, something like "I am sorry if anyone was offended by . . . ."

The bottom line is that if you are going to respond, be very careful. Some of the folks out there, referred to as "trolls" in today's internet world, will gleefully jump on any response, no matter how well-intentioned, just to up the ante and further stir the pot. Good luck.

Monday, May 19, 2014

(Part 3) 5 Considerations as to Your Business’ Negative Internet Review


As attorneys with a law firm which has a significant online presence, and as lawyers who represent small and medium businesses, we are very much aware of the power of the online review and/or rating given by consumers. In fact, in this day and age, the positive or negative nature of a company's reputation as declared by the internet can make or break your business.

For many businesses, it is almost impossible to avoid at least the occasional negative comment or even merely a lukewarm review. Many times, the information posted online is not accurate, or at least is presented out of context and/or incomplete. All businesses which encounter this face the same question: what can we do about this negative online review?   Hopefully, after you have had a bit of time to think about it, one of your next questions is: what should we do about this negative online review? We have developed a list of 5 key considerations and here is the third.

(3) Communicating with the company or website which hosts or published the troublesome review. This can be productive and worthwhile and is unlikely to have negative consequences. In our experience most review sites do make an effort to act professionally, but understandably it is impossible to manage the hundreds, thousands or tens of thousands reviews that the website may ultimately contain. If you - or your representative/attorney try hard enough, you can likely get someone’s attention and perhaps even instigate an investigation of the review.

Some reviews violate the posting company’s terms of service. Others may end up being removed if the publishing website cannot verify the legitimacy of the review. Another common occurrence leading to a deletion is if the person writing the review cannot be identified or at least confirmed as having truly been a customer or client. Finally, sometimes the entity hosting the review's content or publishing it will remove it if an investigation leads to a conclusion that the review is incorrect or unfair.

Oh, and we should mention one other scenario, since, after all, we are lawyers . . . the threat of legal action may make such a review go away, independent of the factors above.


Friday, May 2, 2014

(Part 2) 5 Considerations as to Your Business’ Negative Internet Review


As attorneys with a law firm which has a significant online presence, and as business lawyers who represent small and medium businesses, we are very much aware of the power of online reviews and/or ratings given by consumers. In fact, in this day and age, the positive or negative nature of a company's reputation as declared by the internet can make or break your business.


For many businesses, it is almost impossible to avoid at least the occasional negative comment or even merely a lukewarm review. Many times, the information posted online is not accurate, or at least is presented out of context and/or incomplete. All businesses which encounter this face the same question: what can we do about this negative online review?   Hopefully, after you have had a bit of time to think about it, one of your next questions is: what should we do about this negative online review? We have developed a list of 5 key considerations and here is the second.

(2) Contacting the person who wrote the negative review. Be careful if you are contacting the person who made the negative review. While this can sometimes be effective, there are a number of reasons one should be hesitant to do this.

First, you have to consider whether you are going to be able to communicate politely and without expressed emotion, given the topic at issue and the likely hood that you feel wronged. Also, if the reviewer seems to have exaggerated or provided inaccurate information, how confident are you going to be that (s)he are going to respond to you in a reasonable fashion? Further, you always run the risk of the conversation not going well, or at least not going as planned. It's even possible that you may think the conversation went well, but the complaining party did not appreciate it. This could result in the former customer updating/expanding the initial negative review.

We're not suggesting that you should never reach out to a complaining customer or client. We're emphasizing that if you are going to make contact with someone who has issued an online complaint against your business, make sure it's done carefully and with some advance consideration. 

In some ways, as a trial lawyer, this makes me think of the debate within my profession about asking a judge to "Strike that from the record and instruct the jury to disregard it." This objection and request happens all the time in trial (especially on TV, it seems). Many of us think that a jury being told to disregard the offending testimony/evidence will actually have the opposite effect - that information has been singled out for greater attention, and may end up being further cemented in the jurors' minds. In other words, sometimes you are better of either ignoring such situations or handling them in a low-key manner as opposed to potentially aggravating the situation.

However you handle this - and hiring an attorney to deal with it is sometimes an option worth considering - be careful.

Thursday, March 6, 2014

5 Considerations as to Your Business’ Negative Internet Review

As attorneys with a law firm Charlotte which has a significant online presence, and as lawyers who represent small and medium businesses, we are very much aware of the power of the online review and/or rating given by consumers. In fact, in this day and age, the positive or negative nature of a company's reputation as declared by the internet can make or break your business.

Thumbs Down, disapproval, bad rating
For many businesses, it is almost impossible to avoid at least the occasional negative comment or even merely a lukewarm review. Many times, the information posted online is not accurate, or at least is presented out of context and/or incomplete. All businesses which encounter this face the same question: what can we do about this negative online review?   Hopefully, after you have had a bit of time to think about it, one of your next questions is: what should we do about this negative online review? We have developed a list of 5 key considerations, and here is the first.

(1) Does the review contain opinion, “facts”, or both? As a general rule, it is more difficult to force the removal or editing of a review, once published, which contains merely an opinion. Stated from a legal perspective, a defamation claim is difficult, if not impossible, to bring regarding someone’s stated opinions, even if said opinions are perhaps unfair.

Thus, in some ways, a review such as “I spoke to the owner and could not believe how rude he was” is quite challenging to deal with. It is difficult to come up with an objective standard of what rude is and how to legally qualify “rude” behavior. In other words, this subjective interpretation of the owner’s alleged conduct is pretty much opinion and the accusation of rudeness is not a good basis for a defamation claim.

On the other hand, let’s take a second look at the above example to reconsider the fact vs. opinion issue: “I spoke to the owner and could not believe how rude he was.” Well, if we can’t effectively attack the “rudeness” aspect of this, what about something in that statement that can more easily be described as factual – something demonstrably true or false?

What if the individual to whom the consumer spoke was not the owner but merely a front line employee with no real managerial authority and the consumer knew that? That might be a whole different ball game. All of us, or at least most of us, can agree that a receptionist allegedly being rude to a customer would be less damaging in the eyes of other potential customers as compared to the owner of the business acting in such a manner. Of course, if you are talking about as going as far as a defamation suit, you would want very much to be able to prove that the consumer who posted the negative online review was aware that he/she had not spoken to the owner and had thus intentionally made a misstatement of fact.  

As you can see, this one example – a simple, single sentence review consisting of 13 words – can involve multiple legal issues and possibilities. Please stay tuned for updates on this topic, and please be careful how you handle these types of situations.


If you are interested in a consultation with one of the McGrath and Spielberger business lawyers, simply visit the Contact Us page and complete the contact form.

Friday, February 14, 2014

Is your Worker an Independent Contractor? (The IRS Cares!)

Determine if your Worker is an Employee or an Independent Contractor

This article contains the factors the IRS uses to decide - which you need to know

Don't Get Audited!
As attorneys who represent small and medium-sized businesses in both transactional matters and disputes, we do our best to have a good idea of which issues are commonly encountered by our business clients -including contracts such as employment & independent contractor agreements. One situation which has become even more frequent over the last few years is the hiring of persons to work for the business in a non-traditional arrangement. Two reasons for this are the economic depression and how technological advances allow individuals to perform business tasks, often traditional ones, in new ways and in different settings. (As an example, I am dictating a draft of this article, to be transcribed by someone who does not work “in” my office. She will transcribe my dictation at her own location, using her own equipment and her own skills, and she will email it back to me more or less on her own schedule.)

While my example above does reflect an independent contractor relationship, many businesses mistakenly classify workers as independent contractors who are not, and the IRS is cracking down on these misclassifications. While filing your personal and business tax returns is necessary, you generally want to limit your interactions with the IRS and keep it as far away from your business as possible. Thankfully, our friends at the IRS have published plenty of material to help us mere mortals understand who is an independent contractor, and who isn’t. In fact, you can even make an inquiry of the Internal Revenue Service to ask them to make that determination for you (Form SS-8)! In case you don’t want to go quite that far, though, we’re glad to summarize below for you the factors the IRS focuses on in deciding if your worker is an independent contractor or an employee.

The IRS describes three categories of information it considers in making the I.C. vs. employee decision: behavioral control, financial control, and the relationship of the parties. Here are some of the key details the IRS analyzes in each category:

Behavioral control:

  1. when and where to do the work

  2. what tools or equipment to use

  3. what workers to hire or assist with the work

  4. where to purchase supplies and services

  5. what work must be performed by a specified individual

  6. what order or sequence to follow

Financial control:

  1. the extent of the worker’s non-reimbursed business expenses

  2. the extent to which the worker remains otherwise available for outside work

  3. how regular / guaranteed the worker’s pay from the business is

  4. the extent to which the work can realize a profit or a loss

Type of relationship:

  1. what any written contracts say about the nature of the relationship

  2. whether the business provides the worker with employee-type benefits

  3. how long / ongoing the relationship is

  4. the extent to which the worker is providing one of the business’ fundamental services


The bottom line is that the more control a business can exercise – or even more importantly – does exercise over a worker, the more likely it is that the worker is actually an employee as far as the IRS is concerned. Properly classifying your workers helps to keep the IRS where it should be – out of your way!

Disclaimers: the above is not legal advice, nor is it tax advice.

Tuesday, February 11, 2014

Venue Clauses in Contracts - Beware Listing Only the County and State

Our law firm regularly works on business law disputes, contested real estate / mortgage loan matters, and other cases involving actual or alleged breaches of contract. We also prepare contracts for clients, of course. We know very well that a poorly drafted or inadequately considered contract increases the chances of litigation; if a party to a contract thinks the contract gives him an inch, he may very well try to take the proverbial mile.

Beware the generic venue clause! One extremely important aspect of a contract which is often overlooked as being “basic” or “boilerplate” is the designation of venue. It’s easy, right, the contract just needs to say something like (A) “Any and all claims shall be litigated in Mecklenburg County, North Carolina.” or (B) “Unless the Parties otherwise agree in writing, any lawsuit or legal claim over the subject matter of this Agreement shall be instituted and prosecuted in Charleston County, South Carolina.” Well, not so fast, my friends.[1]

I suspect that most lawyers have never considered this exact issue. Let’s take the above two examples, which use fairly ‘standard’ language with regard to venue.

(A)  “Any and all claims shall be litigated in Mecklenburg County, North Carolina.” If I’ve got a contractual dispute and the contract at issue states that venue shall be in Mecklenburg County, NC, maybe I decide to shake up the opposition by doing something unexpected . . . instead of filing in Superior Court, I file in the United States District Court for the Western District of North Carolina (Charlotte Division). After all, both courts are “in Mecklenburg County, North Carolina” even if one is a state court and the other a federal court.

(B)  “Unless the Parties otherwise agree in writing, any lawsuit or legal claim over the subject matter of this Agreement shall be instituted and prosecuted in Charleston County, South Carolina.” If my partner Jim Spielberger (who is located in Mount Pleasant, SC) is asked to advise a business owner who is expecting to be sued over an alleged breach of contract, can he, with any confidence, assure the client that the case will be in state court based on the venue clause? Could not the plaintiff, with a straight face, argue that the very language of the contract’s venue clause allows the case to be filed and litigated in the USDC for South Carolina (Charleston Federal Courthouse)? Again, this generic venue language does not specify state court or federal court.

Those of you who are dealing with venues that lack a federal courthouse may think this cannot pertain to you – and you’d be wrong, or at least potentially wrong. Some appellate decisions have held that a venue clause similar to those above would allow the case to be litigated in the federal court district which includes the named county, even if that county doesn’t have a federal courthouse / the actual federal courthouse is located in a different county.

Obviously there are other factors which influence where a case can be filed, where it should be filed, where it must be filed, etc., just as there are various elements to be considered when interpreting the language and intent of a contract. This venue designation issue can be a pit-fall for the unwary lawyer as well as the unknowing client. We have a professional obligation to be mindful of such potential problem areas and also to know when our clients may ethically and legally benefit from such loose language.



[1] Common attribution for this expression goes to Lee “Scooter” Corso, ESPN announcer and former honorable mention All-American football player for Florida State University.

Wednesday, January 22, 2014

Breach of NC Real Estate Purchase Contract - Buyer's Damages in NorthCarolina

The real estate market is extremely volatile these days, leading to an increase in real property purchase and sale contracts gone awry. If you are a buyer with an actual contract to purchase real estate and stand able, ready and willing to close / purchase, but the seller breaches the contract and fails to sell you the property, what are your remedies, your options? NC law has surprisingly little to say about this, but this writer can share some information which should be of use.

Of course, every situation is unique, this is not legal advice, and this is not intended to cover every situation or to be a comprehensive thesis on the topic. I recommend you consult a qualified contract lawyer NC if you are faced with this or a similar scenario. That being said, NC law typically allows a wronged would-be buyer 3 options if there is a real estate purchase contract which the seller breaches; I will list them and then translate them:

1) The would-be buyer may sue at law for the damages suffered.
2) The would-be buyer may sue in equity and seek specific performance.
3) The would-be buyer may rescind the contract and recover what (s)he has paid.

The would-be buyer may sue at law for the damages suffered. If you can prove that the seller wrongfully breached by not selling to you and that this failure cost you money, you may be able to recover that amount (and possibly costs and/or fees). While damages cannot be merely speculation, lost opportunity damages may be available. For example, if you had a contract to purchase real estate- a vacant lot in Brunswick County, North Carolina - for $50,000.00 and the property clearly had a market value of $100,000.00, you would typically be allowed to sue and claim a loss of the opportunity to make $50,000.00. Of course, you would need to prove that you could have sold the property for $100,000.00.

The would-be buyer may sue in equity and seek specific performance. Let's say that you had a contract to purchase real property - a 5 bedroom, single family home in Charlotte, North Carolina's Ballantyne area - and the seller refused to go forward despite the contract. You would be able to sue "in equity" and seek a court order forcing the seller to go forward and perform under the contract.

The would-be buyer may rescind the contract and recover what (s)he has paid. One issue that comes up in almost every failed real estate contract is the issue of the earnest money deposit and what happens to it. If you're trying to purchase a townhouse in downtown Raleigh, North Carolina and have paid thousand of dollars in earnest money, you're going to worry about those funds if the deal goes south. Again, depending on the circumstances, the law may allow you to step away from the contract entirely and recover the funds you previously paid toward the purchase. Fortunately, such funds are typically held in an attorney's trust account and thus should be available to recover.

Your situation may or may not allow for the above remedies, you may have to choose just one of these, and there may be other remedies available in certain situations. Whatever you do, please strongly consider protecting your legal rights.