Formalities

From: “Let me provide the formalities.”

Hew and Bordenave

To: “Let us provides the formalities.”

From Old Solo to New Partnership

Hey everyone, thanks for visiting our Blawg. I am just letting you know that all the posts prior to January 1, 2017 are from my solo practice. They are from Ryan K. Hew, Attorney at Law, LLLC. In particular, the old: hawaiiesquire.com. I brought the posts to our new site because a lot of the legal information is helpful for business owners and truth be told I loved doing Draw the Law, Boilerplate Blurb, and all the other content. So please continue enjoying them, but I do hope you like the new content from Trejur and me. Mahalo!

-Ryan K. Hew

*I posted this to my Facebook yesterday for the Federal income tax return deadline, and forgot to put it to my blawg! To busy dealing with my taxes and clients’ transactional issues during this hectic tax period.  Anyway, a little less relevant today, but remember 2015 Hawaii income tax returns or requests for extension are due tomorrow (4/20/16), so still slightly relevant. Cheers and good luck to you! 

I hope your Monday, this final day for submitting your U.S. federal income tax returns (at least without an extension), is not that stressful, but I share this interesting quote with you by one of my favorite U.S. Supreme Court Justices from the past, Oliver Wendell Holmes, Jr. He was a great jurist and in his time was known as the I hope your Monday, this final day for submitting your U.S. federal income tax returns (at least without an extension), is not that stressful, but I share this interesting quote with you by one of my favorite U.S. Supreme Court Justices from the past, Oliver Wendell Holmes, Jr. He was a great jurist and in his time was known as the “Great Dissenter”. I selected this quote, as apparently this quote appears on the IRS building in Washington D.C. So with that, I wish good luck on your taxes, as I do empathize with all of you, especially fellow self-employed small business owners! Anyway, if you are interested, you can find a nice short biographical history for Justice Holmes here: http://www.pbs.org/wnet/supremecourt/capitalism/robes_holmes.html

Happy Lunar New Year! It is the year of the Fire Monkey! Supposedly, fortune tellers say it is an ear of market volatility, so it is best to make contingency plans and not monkey around! However, enough punning, this post is about owning a monkey in Hawaii.

*Disclaimer:  This post discusses general legal issues, but does not constitute legal advice in any respect.  No reader should act or refrain from acting based on information contained herein without seeking the advice of counsel in the relevant jurisdiction.  Further, no tax advice is given in this post, and you are urged to seek a tax attorney, accountant, and/or tax professional to help you with your tax and accounting needs. Ryan K. Hew, Attorney At Law, LLLC expressly disclaims all liability in respect to any actions taken or not taken based on the contents of this post.

Happy Lunar New Year!

I hope it shall be a prosperous one for you! To celebrate that this is the year of the Fire Monkey, I decided to do a fun post,  as I am born in the year of the monkey (I am sure you can now guess my age, haha). So for this post, I thought a fun question to answer is one that that comes up and now and then among pet-loving friends: “Can I own a monkey, here in Hawaii?”

The answer is: yes, but not as an individual … and certainly not as a pet. 

Hawaii Department of Agriculture and Importation of Animals

As you probably could guess this is a regulated area. So it is not as easy as in you can fly in any monkey you want, then take it home, especially given that Hawaii laws are aimed at preserving nature and preventing invasive species.  Obviously, monkeys are non-native species to the island, so you are you going to have to import one and play by the rules. So none of that “see no evil, hear no evil, speak no evil” shenanigans with the government agents.

To begin with, the importation of non-domestic animals is under the jurisdiction of the Hawaii Department of Agriculture (DOA). See HRS 150A-6.2.  Some animals are banned outright, while others are allowable by permit. Monkey importation is allowable by permit but has an extra step. That step being bonding.

I had to use this image for this post. It is a monkey in a suit at a desk with paperwork. I know what people think of attorneys. Further, I think it was apt for this post. Lastly, I paid licensing fees for the image and had to make use of it (don't worry one post I will devote to licensing fees for you graphic designers, photographers, etc . . . but enjoy and laugh! I had to use this image for this post. It is a monkey in a suit at a desk with paperwork. I know what people think of attorneys. Further, I think it was apt for this post. Lastly, I paid licensing fees for the image and had to make use of it (don’t worry one post I will devote to licensing fees for you graphic designers, photographers, etc . . . however, enjoy and laugh!

 

Hawaii Administrative Rules Chapter 4-71 and Bonding

We turn to the Department of Agriculture’s Administrative Rules, in particular, Chapter 4-71, as the objective of these rules are to implement HRS Chapter 150A. See HAR 4-71-1.  So what do the specific rules say about monkeys?

If we go to HAR 4-71-6.5, we see that we would need a permit, but more specifically we see in Section (a)(3) that certain animals need the securing of a bond, as specified in 4-71-7.  Scurrying down to HAR 4-71-7(1) it indicates that an applicant (for the permit) shall secure the appropriate bond for:

Monkeys, apes, baboons, chimpanzees, gibbons, lemurs, pottos, wallabies, and any other animal that the board or chairperson may require to be bonded as a condition for importation or possession;

Bonding Procedure and Conditions for Bonding

So how do you get a bond, and are there specific requirements? Well, the Administrative Rules continue from 4-71-7 to 4-71-8, Bonding Procedure and 4-71-9, Conditions for Bonding.  In these two sections, you will see much of the specifics you would need to fulfill to get a bond, which would go with the permit, which would, in turn, allow you to own a monkey.

Of course, even if you meet these requirements, and successfully import and own a monkey, you have to realize you have to comply with all the bond conditions. Failure to do so would mean the Department could seize it, as given their power under HAR 4-7-10.  Interestingly enough, if your monkey were to escape it is your responsibility to recapture it, and you have a week to do so, or else the Department will use its resources to recapture. Additionally, they can sell, ship, donate, or destroy it.  See HAR 4-71-10.

Are there Any Other Restrictions?

Yes, one of the biggest caveats to all this is that monkeys as a species are placed on the DOA’s List of Restricted Animals – For Private and Commercial Use.

What does “Private and Commercial Use” mean? In the case of the definition section of the Administrative Rules “Private Use” is for example, non-profit research, but is specifically not for “individual possession of an animal as a pet.” Further the restrictions makes clear that all members in the order of primates can only be brought into the state for primate sanctuaries or for research by universities or government agencies, exhibition in municipal zoos, etc … Also a primate sanctuary must maintain a 501(c)(3) not-for-profit federal tax-exempt status and have any permits or licenses required by federal state, or municipal law.  Therefore, if you are intending to bring a monkey into the State of Hawaii it has to be with the purpose of this Private and Commercial Use, which in turn you can see means you will have to jump through additional regulatory procedures (i.e. setting up a non-profit corporation and gaining tax exemption status).

Clearly, “owning” a monkey in the State of Hawaii not a process of monkey see, monkey do like with dogs or cats, but a Department of Agriculture procedure of permitting and bonding and understanding that an individual cannot possess the monkey as a pet, but that the importation of them would be solely for Private and Commercial Use.

Mahalo for reading!

-RKH

 

“Why do I have to pay taxes on money that did not get distributed?!”

This is a question that many LLC owners (know as “members”) ask me. The confusion (and obviously frustration) of paying out taxes on money that you never received is real, but much of it stems from the lack of understanding that in the realm of LLCs there are “allocations”, which handles how profits and losses are allocated among the members and there are “distributions” the actual distributing of cash or property from the LLC. Many business owners like to conflate the two concepts together, which is not the case, and thus creates their confusion.

I provide an informational sheet for readers to take a look and get the basic understanding of the difference between allocations and distributions (see below).  The tax matter aside, the divvying up of allocations and distributions that is a discussion that business owners should have prior to organizing a LLC and then having an operating agreement drafted for them because of not just the tax issue, but due to the flexibility of LLCs of having allocations and distributions not match ownership interest, and the timing of distributions.

Again, communication is fundamental for business owners and a lot of discussion and pre-planning goes a long way to avoid the deterioration of the relationship because these were not hashed out prior to the formation of the business. As discussed in previous posts, LLC owners starting out would want these agreed upon terms on allocations and distributions reduced to writing, and is usually found in the Operating Agreement.

If you would like to see the information sheet, click here and then look for the downloadable pdf entitled, “For LLC Owners: Difference between Allocation and Distribution”.

Mahalo for stopping by and reading my blawg!

-RKH

*Disclaimer:  This post discusses general legal issues, but does not constitute legal advice in any respect.  No reader should act or refrain from acting based on information contained herein without seeking the advice of counsel in the relevant jurisdiction.  Ryan K. Hew, Attorney At Law, LLLC expressly disclaims all liability in respect to any actions taken or not taken based on the contents of this post.

So I am going start this post with one of my favorite movie villain’s quote: “You may dispense with the pleasantries, Commander. I am here to put you back on schedule.”

Except instead of building a space station, I am here to help you build your business by recognizing that while you can skip the pleasantries in business, you should NOT ignore the legal formalities.  I realize some of you business owners find your attorney, CPA, compliance officer, and the like as pains in the butt by sometimes being overly cautious, but please understand that these advisors suggest caution because they see how bad it can get when you don’t follow their advice.  So this post and several that will follow shall focus on legal formalities that I have seen business owners fail to follow.  By failing to observing these simple formalities these owners spent great time and expense trying to fix them, and some of them are unfixable.

Sign Your Papers

So today’s post what am I talking about?  Well, for this post I am talking about something so basic.  Namely, don’t forget to sign your agreements.   Before you laugh, consider how many times some asks you to do something so simple, you procrastinate on it to the last minute because you think it is so simple take care of later.  Consider in that in today’s technological world it is easy to text, email, etc . . . so some people feel, why bother signing a piece of paper?  Let me share a story that I see constantly among current and past clients: the unsigned Operating Agreement/Bylaws/Partnership Agreement.

I have had clients who have gotten into disputes with their business partners.  It might be suspicions, poor communications, changed expectations, but in general the relationship is deteriorating and these former allies, now want the other side out of the business or they want their share bought out.

So by the time the distressed business partner comes to me I will ask, “Where is your Operating Agreement?” I will be using a LLC as an example, but this applies to corporations, partnerships, and in general many relationships.  They usually have an Operating Agreement and aside from the host of other problems, such as lack of adequate protection, incorrect names or usage of terms, etc . . . I get to the end of the document and find it is unsigned.

What’s an Operating Agreement?

Before I continue, let me explain something about an Operating Agreement. This document acts as internal document that sets up the rules and procedures among the members (the owners) of a LLC, and may dictate how one becomes a member, sells their ownership interest, and handles voting, profit-sharing, etc . . . Suffice it to say, you should have an Operating Agreement if you have a LLC, regardless if it is member-managed or manager-managed.  It gives you the rules of interaction.  I have even seen problems where clients did not even bother having an Operating Agreement drafted, which is just worst than not even having one unsigned.

The Problem with Unexecuted Paperwork

Anyway, when your Operating Agreement remains unexecuted (unsigned) or any paperwork for that matter, it would indicate to an attorney that the parties had no intent to be bound by the document.  After all, “why didn’t you sign it?” is the question that comes to mind.

Unsigned documents are just paper with pretty words.  In the law we expect you to take an active act to be bound by those pretty words, and that active act is signing the documents.  The signature serves as evidence.  Consider for a moment that is why even in our electronic world, we make you go through hoops to “click”, “check the box”, or “electronically sign”, basically showing that you “read” the terms and by your action you agree to be bound to them.

So getting back to this situation where the parties have a dispute, but have unsigned paperwork the question remains what were the terms of the contract.  It is true in a lawsuit you can prove there was intent to be bound under the agreement by showing that the parties took active steps to be bound by the unsigned document.

However, don’t you think it is easier just to produce a signed document as evidence rather than cobbling together various pieces of evidence to demonstrate that the parties meant to sign it?

With an unsigned Operating Agreement, you may find yourself stuck with the default rules at law to guide your dispute with regard to fellow members in a LLC.  The defaults rule set at law are very broad and offer very little help in resolving a dispute among members.  So if you are going to take time to prepare a proper Operating Agreement that covers all your bases in a LLC relationship, don’t forget to get it signed by your business partners and sign it yourself, that way at least you know what to look at for guidance when problems start.

Stop back and I will talk about some of the problems you may face forgetting to do your Annual Filings or missing a renewal date!  Mahalo for reading!

iphone6

So were you one of the lucky ones this morning?  Were you able to pre-order yourself an iPhone 6 or an iPhone 6+?  I was successful in getting an iPhone 6, a gold one with 128 GB if you are interested.  However, I was also able to get a copy of my Wireless Customer Agreement with AT&T, which I find interesting.  Usually, when I make large purchases online, I like to copy and paste the agreements in an MS Word document so that I can analyze them and truth be told consider utilizing their language in my agreements.  Attorneys are always looking for drafting language, copying and pasting speeds up the process for clients, but also for the attorney; it allows us to see how other agreements try to encompass a transaction and reduce it to writing (at least for a business attorney).  Further, when we are developing a new transaction for a client, it helps to see what is out there already in the marketplace. Do we have something novel or is someone else already doing it that way?

Anyway, this post is not about analyzing attorneys, but rather I thought it would be interesting to see how a giant wireless company drafts its agreement and what you are agreeing to, as I find for smaller businesses they are always curious what the “big boys” do for their agreements. Also as I stated, transactional attorneys will use drafting language from another company’s agreement if their client is doing the same or similar, then modify to the client’s needs (not to mention in B2C agreement, if the customer already understands a competitor’s agreement it makes it easier for them to understand if the language is the same).  My last rationale is that in our TL;DR social media culture, I thought I would highlight some provisions I thought were interesting if you were just curious as a fellow user of wireless services.

So here is the pdf version of the Wireless Customer Agreement that popped up on my screen that AT&T made me agree to get my iPhone 6 on preorder so that you can follow along.

I. 2nd Paragraph = Please Read – Are we Tracking You? And You are Agreeing to Arbitration.

Right off the bat, in the second paragraph, in big, bold letters, AT&T’s agreement states:

PLEASE READ THIS AGREEMENT CAREFULLY TO ENSURE THAT YOU UNDERSTAND EACH PROVISION, INCLUDING OUR USE OF YOUR LOCATION INFORMATION (SEE SECTION 3.6). THIS AGREEMENT REQUIRES THE USE OF ARBITRATION ON AN INDIVIDUAL BASIS TO RESOLVE DISPUTES, RATHER THAN JURY TRIALS OR CLASS ACTIONS, AND ALSO LIMITS THE REMEDIES AVAILABLE TO YOU IN THE EVENT OF A DISPUTE.

A. Privacy Issue

So what’s all of that mean? Well, if we go down to Section 3.6, we soon discover that this all about how they handle information that they receive from your “Device” (your phone). One of the relevant parts states the following:

We use that information, as well as other usage and performance information also obtained from our network and your Device, to provide you with wireless voice and data services, and to maintain and improve our network and the quality of your wireless experience. We may also use location information to create aggregate data from which your personally identifiable information has been removed or obscured. Such aggregate data may be used for a variety of purposes such as scientific and marketing research and services such as vehicle traffic volume monitoring. It is your responsibility to notify users on your account that we may collect and use location information from Devices.

Interestingly, the language here tracks with many privacy policies that other companies use and they’ve incorporated it into the agreement.  Additionally, AT&T recommends you see its privacy policy on its website by stating:

Please review the terms and conditions and the associated privacy policy for each Location- Based Service to learn how the location information will be used and protected. For more information on Location-Based Services, please visit att.com/privacy. 

I’ve discussed the differences between a contract and a policy in a Slideshare presentation before if you are curious.  In this case, some of the policies are firmly settled into and a part of the agreement; this is always a decision to ponder when drafting of whether or not to incorporate policies into an agreement, thereby making them a part of the contract.

B. Arbitration

So here is one fun part (well, at least to me), throughout this agreement AT&T strives to make it clear through all capitalization or bolding of letters that you agree to binding arbitration. “What’s ‘arbitration,’ Precious?!?” (Pardon, the dorky humor.)

Well, AT&T tells you what it is exactly in Section 2.1 of the agreement.  Arbitration is NOT court; it is a form of “alternative dispute resolution.”  It is less formal than a court proceeding and tends to be faster in reaching a resolution in a dispute than going to court. With that being said, generally speaking, many feel that arbitration tends to be favorable to the business and anti-consumer.  I’m not here to judge whether or not that is true, but what is clear is that AT&T has its consumer’s waive the ability to go to court (other than small claims) and has also barred class arbitration and class actions.  “Class” actions or arbitrations are where a large number of people who have suffered that same injury from the same person (a business entity is a legal person) band together to pursue a claim.  This type of provision is also seen as anti-consumer by consumer advocates.  For my part and this post, I’m just going to address the question: can they do that?

Yes, the Supreme Court of the United States (SCOTUS) has made clear in recent rulings the applicability of the Federal Arbitration Act to these types of agreements. So if you have a dispute with AT&T beyond small claims court limitations, you are going to have to arbitrate: there is not another option.

It is worth noting here AT&T had a case before SCOTUS on this matter in AT&T Mobility v. Concepcion, 563 U.S. 321 (2011).  Basically, SCOTUS ruled that the FAA preempted state laws (in this case California’s law) that prohibit contracts from disallowing class-wide arbitration, thus allowing businesses to include arbitration agreements eliminating a consumer’s ability to bring a class action suit. So it should come as no surprise with a SCOTUS victory, they are going to include this in their agreements.

II. Section 6.0: Data – Why all the CAPITALIZATION and Bolding?!

So another area that caught my eye, and probably purposefully so by the drafter of this document is Section 6.0.  Why did it catch my eye?  When scrolling down the text one cannot, but help notice the large amounts of bolding and capitalization in Section 6.0.  And of course they are going to do that, it has to deal with one of the biggest contentious areas that people have with their wireless carriers, the data usage plan.

A. 6.1: Overage Charges; No Rollover; and Terminate with or without Cause

So this isn’t exactly news, as many of you already understand this, but I thought I would pull out the line in the agreement that states it for you:

On Data Services with a monthly megabyte (MB) or gigabyte (GB) data allowance, once you exceed your monthly data allowance you will be automatically charged for overage as specified in the applicable rate plan. All data allowances, including overages, must be used in the billing period in which the allowance is provided. Unused data allowances will not roll over to subsequent billing periods.

You will be charged for overages if you are on a rate plan where that is possible, so those of you grandfathered in will probably cling to your rate plans that have no overage charges till you become a grandfather.  Also, no rolling over unused data into another billing period.

Then we have this sentence at the end of Section 6.1:

AT&T RESERVES THE RIGHT TO TERMINATE YOUR DATA SERVICES WITH OR WITHOUT CAUSE, INCLUDING WITHOUT LIMITATION, UPON EXPIRATION OR TERMINATION OF YOUR WIRELESS CUSTOMER AGREEMENT.

Basically, AT&T may terminate your data services, and they do not need a reason to once your wireless customer agreement ends whether it expires or terminates. 

B. Section 6.2: Don’t Do this Stuff as It’s Not the Point of the Wireless Data Service (i.e. Prohibited Uses)

Ok, I am not quoting Section 6.2 (as the relevant part I want to discuss is long), and you are probably getting tired reading this post as it is long, but for those of you have stuck it through all this, much appreciated.

Anyway, for this wall of bolded text, basically, it is AT&T’s intent to prohibit certain behaviors as those uses are probably illegal, harms AT&T’s infrastructure, damages AT&T’s ability to profit, or exposes them to some other liability.  It’s pretty detailed and lists a lot of examples. Also, they save themselves on making sure you understand that the list of examples are not the only ones of Prohibited Use by stating that their listing is “without limitation.”  Of course, if AT&T “believes” you are using their Service in one of these prohibited manners, it may terminate the agreement.

III. Section 10.0: Doing Business in Multiple Jurisdictions.

So I am going to round out this post at the end of AT&T’s Wireless Customer Agreement (seems to be a good place as any to stop), as I tend to do this blog for business owners (small and large), and Section 10 to me highlights what businesses face when they operate in multiple jurisdictions.

Most businesses start off in one state, and then as they become more successful they grow, and that growth is sometimes beyond the state they started in.  Depending on the situation, sometimes you can avail yourself of your home state’s laws and other times when you do business in another state you are bound to follow their laws.  For large businesses, like AT&T they have a myriad of laws that they must follow at the federal level, but individually as to all the states that they have customers in.  Sometimes those state laws force a company to stipulate to things in their agreements, in particular when it is with consumers, due to some states passing consumer protection laws.  Here, in AT&T’s Section 10.0 we see that California, Connecticut, and Puerto Rico (which is not a state, but I’ve been using “state” here for my own convenience) have special provisions.

Therefore, this brings me to a point for all you businesses that have operations in multiple states. While for the sake of ease, and that variations in your operations and systems cost time and money, it is sometimes inescapable due to a state’s laws that your agreements will be regulated.  So you should consider, especially when it comes to your consumer agreements, knowing what the consumer protection laws are if you intend to a comprehensive catchall agreement as AT&T has done here.

Anyway, I think this makes up for my lack of posts for several months.  I will strive to be less wall-of-text on you readers next time and spruce up the next post with pictures, possibly my doodles for a Draw that Law when I get back to it.  As always, mahalo for reading.

-RKH 

Non-Profit Organization

As it is the giving time, I took some time to give a donation through the Friends of Hawaii Charities, Inc. page. As I was going through the process, this triggered my busy-filled brain that I was going to do a series of one-sheets and posts about nonprofits, tax-exemption status, and the meaning of 501(c)(3) . . . Which as you can see I have not done.

So I figured let’s just do a short post on one aspect:  namely, terminology and use of phrases of “nonprofit,” “non-profit corporation,” and “501(c)(3)”.

Be Specific: The Importance of the Right Word

Sometimes the “officialness” of a word tends to confuse rather than help. However, for attorneys, especially transactional ones, like myself, we often correct clients that conflate a “corporation” with an “LLC.”  They are NOT the same entity.  Further, this translates into a shareholder owns stocks/shares in a corporation whereas a member owns membership/ownership interest in their LLC.  While this can get confusing to the average businessperson, we attorneys use it to understand what type of situation we are facing for the purposes of ownership, rights, obligations, taxes, etc.

So this brings me to the point of this post.  I hear many times people use the word “nonprofit” to mean the same thing as “501(c)(3)” and vice versa.  While a 501(c)(3) is a nonprofit, not all nonprofits are 501(c)(3) organizations.  (If you remember nothing else of this post, just remember that sentence!)

What is a Nonprofit?

Many people think that “nonprofit” means that the organization does not make money. While, in a sense true, that does not paint the whole picture.  Like many lay people’s interpretation of the mechanics of law that is oversimplified.  The designation of being a nonprofit does NOT mean that the organization does not intend to make a profit.  What it means is that the organization has no owners (like shareholders or members of for-profit corporations or LLCs) and that the revenues earned by the organization do not inure to any particular owner.  In fact, there are some large revenue-generating nonprofit organizations out there, and one has had some headlines recently is the National Football League (NFL).

Yes, the NFL is a nonprofit; specifically, under the US Tax Code, it is a 501(c)(6).  I will get to the 501(c) thing in a minute.  I’d like to finish this thought on “nonprofit” before segueing to the 501(c).  Because business entity formation happens at the state-level (here in Hawaii you go through the Department of Commerce and Consumer Affairs, and in other states through the secretary of state), nonprofits first step toward 501(c)(3) status is to become a nonprofit corporation.

At that point, after your Articles of Incorporation are filed, you have a non-profit corporation in your state, BUT you are NOT a 501(c) tax-exempt nonprofit organization.

What are 501(c)s? and Specifically What is a 501(c)(3)?

After you have a non-profit corporation most organizations try to determine whether or not to seek further 501(c) status due to their purpose.  Notice that I mentioned that the NFL is a 501(c)(6), which is a Business League,  but in total there are about 29 different types of 501(c)s of varying use.  The most well-known is what everyone thinks of as a nonprofit, which is an organization organized for charitable (or similar purposes) and has 501(c)(3) status.

If the nonprofit corporation has a charitable purpose, its board of directors will seek 501(c)(3) status form the IRS. This tax-exempt status confers a benefit to people who donate money to the organization.  If you look at the website that I made a donation to this is the language they use:

Your donation is made to Friends of Hawaii Charities and is tax-deductible because Friends of Hawaii Charities is a 501(c)(3) tax-exempt charitable organization.

For charitable organizations, that is the key feature of a 501(c)(3) tax-exempt status, allowing the donors to get a tax deduction.  To receive this special status the nonprofit corporation has to meet certain criteria, and even after it gets its 501(c)(3) status the organization needs to abide by standards set out in the tax code.  For example, 501(c)(3) organizations cannot support political candidates and conduct extensive lobbying whereas the 501(c)(4), civic leagues, aka “Super PACS,” are not barred from these activities (yet).

Last Word: Know the Terms

I hope this clears the confusion when you use the words “nonprofit” and “501(c)(3)”. Nonprofit is just a general catchall and consider the fact that the term can just as easily apply to a casual association as well as a formal organization (i.e. one that has filed Articles of Incorporation to become a nonprofit corporation).  Then, you take your non-profit corporation and apply for 501(c)(3) tax-exempt status.  If that does not help, as always seek an attorney or professional and they may explain it better than me.

P.S. If you are feeling giving, be sure to check out the Friends of Hawaii, Inc. site and give to a Hawaii nonprofit through Friends of Hawaii, Inc., which is a 501(c)(3) charitable organization!

 

*Disclaimer:  This post discusses general legal issues, but does not constitute legal advice in any respect.  No reader should act or refrain from acting based on information contained herein without seeking the advice of counsel in the relevant jurisdiction.  Ryan K. Hew, Attorney At Law, LLLC expressly disclaims all liability in respect to any actions taken or not taken based on the contents of this post.

Today’s Post is Not About Sledgehammer Time: It’s Only Focused on the Shopping Cart Law

Hey all, I decided to jump on the bandwagon (may be the shopping cart?) and talk about shopping carts.  However, I am not going to get into whether Rep. Brower’s actions exposes him to civil or criminal liabilities or if they were right or wrong.  I think Civil Beat, attorney Marcus Landsberg, and the news outlet and social media has already beaten that cart into disrepair (yeah, I am going to keep trying to hammer away with the lame jokes and puns).

Anyway, what I would like to do is take a look at this matter from a business establishment perspective (those that put out the carts) and what the legislature has put forth as a law on point (looking at what is on the books.  It turns out that we have enacted a law specifically for shopping carts.  HRS § 633-16 discusses the unauthorized removal of shopping carts.  Further, as it is in Chapter 633, it puts this matter in small claims court.  

Breaking Down the Law

So looking at the law, as currently stated, it makes it a violation for a person to remove a shopping cart (including baskets and other devices) from the premises of business establishment (that owns the cart), if they are unauthorized.  The premises include the parking lot as well as the sidewalks adjacent to the business establishment’s premises.

The business establishment is the person who has the ability to bring a claim under this law if there is damage to the business or property.  The business may sue for damages and win an award equal to the replacement value of the cart (and keep in mind the average cost of a cart ranges from $100 – 250), basket, or device plus the cost of the suit.  The establishment can also sue to enjoin the unauthorized act.

So in order for a business to win in small claims court (under this law) the must nail down these elements: 

  1. they are the lawful owner of the cart, which has been identified;
  2. they gave notice, which means posting a conspicuous sign where the carts are stored that says the carts are not to be removed;
  3. that the cart was removed from the business location without proper authority; and
  4. the person accused of violating this law is in possession or had control of the cart.

Practicalities of the Law

In terms of policymaking it is understandable why the legislature gave such a legal action for business owners of these carts (as they are expensive).  However, in terms of reality is if these carts are being taken by people who are unable to pay the damages or the business cannot track them down its effectiveness as a law should be looked into.  In addition, how many shopping cart owners utilize this law for these purposes? All I know at this point though is that the bang of the gavel in your favor is a better sound than a squeaky cart on uneven pavement!

A Final Word

Although this post was focused on shopping carts, business owners for any type of legal action should always consider the cost of pursuing claims in court versus that of implementing practical solutions (where possible), or possibly a combination of legal and practical action, such as drafting contracts, policies, procedures, and other preventative measures.  Anyway, that’s it for this post.  Mahalo!

*Disclaimer:  This post discusses general legal issues, but does not constitute legal advice in any respect.  No reader should act or refrain from acting based on information contained herein without seeking the advice of counsel in the relevant jurisdiction.  Ryan K. Hew, Attorney At Law, LLLC expressly disclaims all liability in respect to any actions taken or not taken based on the contents of this post.

What is the Entire Agreement (aka Integration aka Merger) Clause?

The entire agreement or integration clause basically states that anything not in or a part of the written agreement, is not a part of the agreement.  It is premised upon the parol evidence rule, which is a rule that prevents a party to a written contract from presenting outside evidence that contradicts or adds to the written terms in the agreement.  Basically, you can’t say the final agreement is wrong because you had discussed something different in letters, conversations, or side agreements prior to the final agreement.

Why do we have it?

At a certain point, you either have a deal or not, and while some people prefer handshakes, their attorneys feel that having something in writing is better.  Now, imagine, if we allowed parties that were in dispute of a contract continually bring in evidence that undermined the final written agreement.  It would kind of make settling on the terms of the agreement pointless, wouldn’t it?  So, we limit the understanding of the agreement to what is reduced to writing, bolstered by this clause.

Generic Example

This Agreement sets forth the entire agreement of the parties and supersedes all prior or contemporaneous writings, negotiations, and discussions with respect to the subject matter hereof.  Neither party has relied upon any such prior or contempraneous communications.

Example of a an Entire Agreement Clause in a Consultant Agreement

This Agreement represents the entire understanding between the parties with respect to the subject matter contained in it and supersedes all other written or oral agreements made by or on behalf of Consultant or Client.

Example of Integration Clause in an Employee Agreement

This agreement constitutes the entire agreement of the parties relating to the subject matter of this agreement and supersedes all other oral or written agreements or policies relating thereto, except that this agreement does not supersede or limit the Employee’s rights under any benefit plan.

What about changing the terms of the Agreement?

Well, that’s what the Amendment clause is for, and that is for another post!

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FB 'Like' Constitutionally Protected

LEGAL DISCLAIMER: The following information is provided to be just general information, and therefore, should not be taken as specific legal advice that pertains to any particular situation.  The reader should not base any decisions on the information here to act or refrain from acting regarding a legal problem.  If you believe you have a legal problem please seek legal advice from a licensed attorney in the relevant jurisdiction.
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Exciting news everyone!  My Pacific New Media (PNM) class on Social Media and the Law is next week!  So there is still plenty of time to sign-up.  Here is the general info:

Sep 25, 2013 • Wed • 7:00-9:00pm • 1 mtg • UHM Krauss 012 • $50 (SMCHI $45)

What will I be covering?  Well, as it is a general survey class, I will touching upon areas where the law has inserted itself in the social media sphere, such as today’s more exciting news.

4th Circuit Court of Appeals Rules the “Liking” on Facebook is Constitutionally Protected

For instance, like how a Facebook ‘Like” is protected by the 1st Amendment of the U.S. Constitution (i.e. it is a freedom of speech).  Today, the 4th Circuit Court of Appeals issued a ruling in favor of a former deputy sheriff who had been fired from his job due to “liking” the Facebook page of the man running in opposition to his boss.  Basically, the court felt that by “Liking” a campaign page, it was the “Internet equivalent of displaying a political sign in one’s front yard, which the Supreme Court has held is substantive speech.”  Further, the court, in its unanimous ruling, as to this Facebook issue, stated that, “On the most basic level, clicking on the ‘like’ button literally causes to be published the statement that the User ‘likes’ something, which is itself a substantive statement[.]”

To read the complete ruling, check it out here.

Other Topics at my Class

As stated in my post on Trademark Usage, I attended the ABA’s Annual Conference, so I sat in on a seminar on “Social Media Terms of Use: Case Law Round Up”.  Many of the issues discussed at that seminar are ones I will be focusing on for my PNM class, such as various social media platforms’ terms of use, policies, etc . . . . I have a Slideshare that covers basics on the differences between Policies and Contracts.   What many users fail to realize that Terms of Use are generally binding and enforceable contracts, but that a Privacy Policy tends to be just a company’s call toward a prescribed action.  This is something that social media marketers, consultants, small business owners, and those who use social media as one of their primary marketing tools should consider.  Finally, if you are a responsible decision maker for your organization/business, you really consider having internal dialogue on handling social media in general (whether it be employees, PR, marketing, etc . . .).

Anyway, that is just a sliver of one of the many topics to be covered in my class.  So if you are interested in signing up click here.

Mahalo!

-RKH