Litigation FAQs
What are the features of a business corporation?
A corporation is a statutorily permitted creation of a fictional person. Unlike a partnership or sole proprietorship, a corporation has its own life, separate and apart from that of its owners, management, or employees. This universally held concept of independent existence is the basis of several advantages and traits of a corporation. The corporation, as an independent entity, has a perpetual life; it can contract, own property, sue or be sued in its own name, can have a domicile distinct from that of its shareholders; and, most important, it incurs liability distinct from that of its owners (the shareholders). The corporate form also has tax advantages, a principal attraction to many design professionals.
What are close corporation businesses?
Close corporation businesses are business enterprises owned or "closely held" by relatively few people. Businesses may be closely held corporations; enterprises with shares that are closely held by only a few stockholders, such as family members, rather than traded openly in the securities market. Close corporation businesses may also be sole proprietorships, businesses operated by a single owner with no separate legal entity for holding or operating the company, including the owner's liability for the business's debts.
What is a limited liability company?
A limited liability company is a hybrid business form that offers some of the best features of partnerships and corporations, but with significant advantages over both. If properly formed and managed, a limited liability company can be treated as a partnership for tax purposes, providing flow-through tax treatment, and as a corporation for liability purposes, offering limited liability to its members. Statutes, the articles of organization, and the operating agreement limit the boundaries of permissible activity. Most states have enacted limited liability company statutes; many of these statutes explicitly authorize professionals to use this type of association. In addition, some states have amended their professional practice acts to specify the requirements for forming a limited liability company.
When can a court dissolve a corporation?
Dissolution of a corporation is a long and complicated process governed by statute. However, in certain instances, when a deadlock of the board of directors paralyzes business functions, or when the directors are guilty of fraud, mismanagement, abuse of authority or persistent unfairness to minority shareholders, a court may dissolve a corporation.
What is a class action? Are there benefits to class actions?
Class actions were designed as ''an exception to the usual rule that litigation is conducted by and on behalf of the individual named parties only.'' One primary purpose of the class action is to promote judicial economy and efficiency by obviating the need for multiple adjudications of the same issues. Class actions are particularly appropriate when the ''issues involved are common to the class as a whole" and when they "turn on questions of law applicable in the same manner to each member of the class." Class actions involve a group of plaintiffs (or sometimes defendants) who share certain damages or types of legal claims. The group, or class, consolidates its arguments into a single lawsuit for resolution in court. Because most class members will not have their own lawyers, courts require special procedures to protect class members' interests.
The benefits of class actions include the enhancement of access to the courts by spreading litigation costs among numerous litigants with similar claims, avoiding inconsistent adjudications by providing a single proceeding in which to determine the merits of the plaintiffs' claims, and ensuring that the interests of absentee class members are considered fairly and adequately.
How can corporations avoid consumer class actions?
Corporations often use arbitration clauses in consumer sales agreements in order to limit the types of dispute resolution available should difficulties arise. These clauses require the parties to the agreement to resolve any disputes through arbitration. Arbitration involves the competitive presentation of evidence to a neutral decision-maker. The arbitrator makes a binding win/lose decision that usually cannot be appealed.
The Florida Arbitration Code governs the arbitration of commercial disputes in Florida, including disputes among partners or joint ventures. The Federal Arbitration Act may also cover commercial disputes, if the commercial transactions involve interstate or foreign commerce.
While arbitration has the advantages of expedience and relatively low cost, an arbitration clause precludes parties from taking disputes covered by the arbitration clause to court. Because a class action lawsuit involves direct judicial oversight, arbitration clauses prevent the development of a consumer class. Instead, each individual consumer must pursue his or her own arbitration procedure against the contracting business.
What are the differences between an unfair act and a deceptive act?
An unfair act or practice entails appropriation without permission and with intent to obtain commercial benefit or to divert patronage from a competitor. A deceptive act or practice involves direct misrepresentation, such as false claims or allegations that a competitor's goods or services are defective, or claims with false merit for one's own products, (i.e., false advertising). Accordingly, elements of proof may vary depending on how the allegations are pleaded.
What are unfair trade practices that affect employees or consumers?
Adhesion contracts, i.e., "take it or leave it" agreements, systematic breaches of contract, high-pressure tactics, and taking advantage of disparate knowledge are all practices that may affect employees or consumers disadvantageously. This includes practices such as intimidating customers, refusing to let customers leave until they sign contracts, filing collection lawsuits in improper forums or in technically proper forums distant from the residence of the consumer or place where the contract was signed.
In a construction contract, when does a party commit a breach?
When a party to a building or construction contract fails to comply with a duty imposed by the terms of the contract, a breach results, for which an action may be maintained to recover damages; and, of course, a breach occurs when the contractor fails to perform substantially in accordance with the terms of the contract. Additionally, the act of an owner in preventing the contractor from performing the contract is a breach.
What are the categories of land-use litigation?
Land use controls are in part an illustration of Rousseau's concept of a "social contract" and are typically a state matter, handled in the state courts. Land-use litigation generally falls into three categories:
- Developers' suits, where a developer, property owner, or ultimate user fails to win a desired or necessary development approval and brings an action against the local government (or other permitting agency) to attempt to obtain that approval or some other form of relief.
- Neighbors' suits, where a local government grants some form of approval to a project and neighbors (or other aggrieved parties) bring an action to reverse or alter that decision.
- Enforcement actions, initiated by the local government to enforce existing ordinances or regulations.
