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Detroit & Chicago Business Organizations Legal Blog

Can you legally break an employment contract?

Whether you are an employer or employee, when you sign an employment contract, you make a legal agreement. Breaking such a contract is difficult regardless of whether you live in Detroit or Chicago or anywhere else. Contract laws are fairly specific and strong. However, there are some certain circumstances that could allow you to legally get out of an employment contract.

Career Trend explains that one of the easiest ways to end an employment contract is to prove the other person broke it first. Breaching a contract means not honoring the terms of the contract. If you can prove the other party violated it in some way, you should be able to get out of the contract.

What makes a trade practice deceptive?

It is a common marketing practice among business owners in Michigan and Illinois to emphasize the positive aspects of the products and services on offer, while paying as little attention as possible to the negative aspects. You may wonder if this represents a deceptive trade practice. According to FindLaw, it does not qualify as a deceptive trade practice in the eyes of the law. In order to categorize a trade practice as deceptive, you have to make a claim that is demonstrably false or deliberately misleading. 

Nevertheless, the definition of deceptive trade practices is far-reaching and includes the following:

  • Misrepresenting used, damaged, reclaimed or altered products as brand-new
  • Selling counterfeit goods while claiming that they are the genuine article
  • Making false claims about needed repairs, replacements or services
  • Intentionally keeping an insufficient amount of products in stock to meet expected demand

How can I avoid problematic clients?

When offering a professional service, clients help your business grow. While they’re an integral aspect of being successful, you also want to choose your clients wisely to prevent serious issues, such as contract disputes, from occurring down the line. Medium explains some common client red flags to look for so you can avoid problems.

Downplaying the amount of work

Business formation types that limit personal liability

When you own an Illinois or Michigan small business, you assume a certain amount of risk, but the amount of personal liability you take on will depend on the type of business structure you choose to create. At Pentiuk, Couvreur & Kobiljak, P.C., we understand that the business type you choose will have a direct impact on whether others can hold you personally liable, should someone sue or file a judgment against your company. We have helped many entrepreneurs with similar concerns select business formation types that meet their needs.

According to QuickBooks, all small business owners face some degree of risk, and this holds true regardless of whether they own companies facing obvious liabilities, such as transportation companies, or entities where the risks are less overt. There are, however, two key business structures worth considering if one of your primary goals involves reducing personal liability in your business.

What are the crucial elements of a contract?

As a Michigan or Illinois business owner, you and your company enter into numerous business contracts. Whether they represent purchase or sale agreements, employment agreements, partnership agreements or some other type of agreement, contracts form a major part of your business operations.

The Judicial Education Center explains that all contracts, no matter of what type, contain the following four elements

  1. Offer
  2. Consideration
  3. Acceptance
  4. Mutuality

Director seeks compensation for alleged breach

For companies and individuals in the media and entertainment industries, strong contracts are essential. Anyone in Illinois or Michigan who is involved in these industries knows this firsthand. In many cases, a contract between a large corporation and an individual may entail payments for work that could take a long time to produce or complete. In some situations, the work is never completed and this may well happen due to a dispute between the parties that results in the cancellation of the contract.

One example of this can be seen in a case involving a famous director and the online and content giant, Amazon. The two parties apparently worked together on one program and then entered into a contract for a new movie. Since the creation of that contract, however, renewed allegations relating to sexual misconduct against the director surfaced. In addition, some professionals indicated their refusal to work with the director.

CVS Caremark, Wal-Mart contract dispute resolved

Consumers in Illinois and Michigan have concerns about the rising costs of prescription medications. According to the Wall Street Journal, these concerns have put pressure on drug manufacturers, pharmacies, and the middlemen between them known as pharmacy benefit managers to lower the costs.

The heightened tensions erupted in a dispute earlier this month between Caremark, a PBM associated with CVS Health, and Wal-Mart, with the retail giant threatening to rescind its participation in Caremark's prescription drug coverage. This move had to potential to affect participants in Caremark plans as they would have to pay full price to get prescription medications filled at Wal-Mart pharmacies. This would have particularly affected consumers in more rural areas in which Wal-Mart is one of the few, or in some cases the only, pharmacy in the vicinity to participate in Caremark.

New year, new tax laws for businesses

Company owners and shareholders in Michigan and Illinois are often busy at the beginning of the year preparing for the year ahead. This year, they are also likely focused on navigating how the full implementation of the Tax Cuts and Jobs Act will impact them.

As explained by The Motley Fool sole proprietors, LLC members or shareholders in S corporations may be able to deduct 20 percent of their business earnings from their individual tax returns going forward. All of these businesses are referred to as pass-thru entities which means that the companies themselves pay no income taxes. Instead, the tax responsibility rests with these individuals.

Illinois company wants contract review

Companies that do business with local municipal governments might assume that these entities would want to support operations in their cities or states. While certainly this can happen, there may be a variety of factors that go into a city council's decision to award a contract to a vendor from outside the area. In one recent situation involving this type of decision, the local company is pushing to have the contract award reviewed and reconsidered.

At issue is a contract that would allow one company to haul coal for a period of three years. As reported by Transport Topics, the city of East St. Louis opened up bids to the incumbent and one other vendor to bring in coal for the City Water, Light and Power department. The incumbent is a company from Georgia and the other vendor is based in Illinois

What are the pros and cons of a sub S corporation?

A sub S corporation, or subchapter S corporation, is a special type of corporation that provides the security of LLCs but allows profits and losses to flow directly through to shareholders. This means that income and losses accrued by the corporation may pass through to the shareholders so that they may include them on their individual tax returns. This eliminates the need for the company to pay federal taxes. Though this type of business entity is more appealing to small business owners than a standard corporation, you should weigh the pros and cons of this type of entity before structuring your Illinois- or Michigan-based business around it.

According to Entrepreneur, there are a few benefits of electing to form a subchapter S. One is that you can use the cash method of accounting. The cash method is simpler than the standard accrual method as it allows you to tax your income as you receive it and deduct expenses when you pay them. Another benefit is that you assume limited liability for items such as debts and claims against your business, much as you can do with an LLC. 

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