What you need know about Contracts

Everyone needs to know about contracts, if you’re reading this you have probably entered into numerous agreements giving away rights you didn’t know you had. I want to help educate the public about contract law and what you need to know to protect yourself. This guide is not meant to replace a lawyer, if you are in serious contractual negotiation, you should always consult a lawyer: Sure you might spend $200-$5000, but it could save you $5000-millions of dollars. If you have any questions please call or email me.

What you need to know about Contracts

law books

Is it a contract or agreement?

Contract and Agreement are two terms which are commonly used interchangeably by many people, who don’t understand the significant difference between the two. Though as a figure of speech it doesn’t makes much of a difference in normal life but mistaking one for the other can prove costly, especially when it comes to monetary affairs. People with dubious intentions have been known to exploit to their advantage the ignorance of common people in confusing one term for the other. That’s why it is so very important to understand both the terms as well as to always consult a qualified attorney before signing anything important.

Agreement is a very generic term. When two or more parties have a mutual understanding between them about their relative rights and responsibilities, it is called an Agreement. The meeting of minds at a certain point is how most institutions define an agreement. An agreement can be on anything, from business views to domestic views. In an agreement, the parties define the terms and condition of the agreement by themselves.

What is a Contract?

A contract can be defined as a legally binding agreement between parties which creates obligations that are enforceable. Though it can be said that every contract is basically a legal agreement, not all legal agreements are contracts. A legal agreement must fulfill certain conditions, which make it enforceable, so that it can be termed as a valid contract.

Conditions that an agreement must fulfill, to be considered a Valid Contract –

  • Offer & Acceptance – An agreement must contain an offer made by a party and the acceptance of that offer by another party, or a counter by the other party in case it doesn’t accepts the original offer.
  •  Mutual Consent – Both parties must be on the same page when it comes to the terms and condition and get into the agreement on their free will, without being forced into it.
  • Consideration – Anything of value that is exchanged between the parties is called as ‘consideration’. Consideration can be goods, service, promises, act or money. In order to be a valid contract, an agreement must include ‘consideration’.
  • Legal purpose – The agreement shall be made only for legal purposes. One cannot contract for activities which are illegal or impossible.
  • Capacity/Competence – To enter a contract, all the parties must be of ‘sound mind’ i.e. the parties must not be minors (for most contracts), must not be under influence of any substance and must not be mentally deficient.

Can contracts be oral? What is the “statute of frauds”?

Barring a few exceptions both verbal and written agreements are considered contract in Florida if they fulfill the above mentioned criteria which make them binding and legally enforceable. Apart from those contacts which are specifically required under Florid law to be in writing, oral contracts, especially those in which a party fulfills its obligation(s) are enforceable in Florida.

Though oral contract are enforceable, their details are fairly hard to prove in a court of law when compared to a written contract. That’s why it’s always advised to have a written contract instead of an oral one. Certain written contracts in Florida are required to include the agreement between parties on specific issues. Even otherwise, a written contract must specify the terms and conditions of the agreement between two parties in great detail, so that there is little room for disputes to arise.

Limitations

One would have encountered terms like ‘liquidated damages’, ‘consequential damages’, ‘court costs’ etc. while going through a contract. Most of the people while getting into a contract don’t pay much importance to these ‘legal’ terms, only when it’s too late and a breach of contract occurs that an individual realizes the kind of limitations they place and their consequences.

Most of the ‘business’ contracts drafted nowadays contain limitations. The limitations can be for different things like limiting the amount of damages that an injured party can seek if a breach of contract occurs, limiting the jurisdiction to a specific court/ county in which a lawsuit can be filed if a breach occurs, limiting a party’s right to recover lawyers fee and other associated litigation cost when a dispute arises etc. It’s very important that before signing or drafting a contract one consults a lawyer to understand or specify the terms and conditions in the contract. Clauses regarding consequential, special or liquidated damages must be thoroughly understood BEFORE getting into a contract as they may severely limit your right to seek adequate damages (compensation), in case the other party breaches the contract.

 Can I cancel a contract

Cancelling a contract comes with its own set of difficulties. While most contracts can be cancelled if the parties involved give their consent for cancellation, some contracts come with ‘right of rescission’ which gives a party the right to cancel a contract, subject to certain procedures or conditions. If a contract contains the right to recession, one has to follow the exact guideline, timeframe and procedures mentioned in the contract regarding cancellation. In such cases, it’s best to take help from a qualified lawyer, or else the cancellation could be considered invalid if not done according to the specifications.

Time Limitation for filing Lawsuits

When a party breaches a contract or terms of a contract, the non-breaching party must file a lawsuit within the prescribed timeframe to enforce the contract, or else the Courts in Florida may not allow filing of the lawsuit. According to Florida laws, a lawsuit must be filed within 5 years of the date when a written contract was made, in order to enforce it. In case of verbal (oral) contracts, the timeframe is of 4 years. The above mentioned timeframe does not apply to each and every case, in some cases the timeframe for filing a breach of contract lawsuit can be as little as 1 year.

 Difference between Arbitration or Lawsuit

Arbitration is a procedure in which parties having a dispute over a contract, resolve it outside court and the decision is made by an ‘arbitrator’ instead of a Judge or Jury. The contracts which require a dispute to be solved through arbitration include an ‘arbitration clause’ specifically stating it. By signing a contract that has an arbitration clause, an individual basically gives up their right of resolving a dispute through a court of law. Even otherwise, arbitration in contractual disputes is generally more expensive than resolving a dispute by filing a lawsuit. One must be cautious and evaluate all options before signing a contract with an arbitration clause.

Due to the significance of contracts and consequences one can face due to breaches, the Supreme Court of Florida bars non-lawyers from drafting most of the important contracts. To ensure that your rights are always protected it’s always beneficial to have a contract drafted by a skillful lawyer. Even when an individual is entering an already written contract, consulting a lawyer before signing it can ensure that one’s rights are protected, in case a dispute ever arises.

If you have a question about contracts, contract law, or personal injury law: please contact Mark Perenich today.  He has been practicing personal injury law for 30 years.

 

Personal injury Law and legal funding

Lawsuit Funding – the truth behind the BUSINESS

Often times personal injury lawyers are asked about “legal funding” I wanted to go over a few points about legal funding so more people can be educated.  Say you were in a car accident, and maybe your attorney is reasonable certain there will be a settlement at some point, you may opt to borrow some of the money before the case is final.

Car accident Clearwater

Legal funding, or as they are now known all over America ‘Lawsuit funding’ started to spread its wing in 1997. It is relatively a new ‘industry’ but one that has already garnered much attention due to its ‘controversial’ nature. Voicing one’s opinion about it is not easy as there are two sides involved, one that is made up of industry members, lobbyists the ‘pro’ side and the other made up of insurance companies, legislatures and finance experts the ‘con’ side. Depending on what views you have regarding this nascent industry and its ‘products’, you are sure to incur the wrath of one of the sides. In recent times, numerous bills have been filed in the state legislature for ‘regulating’ this industry. With the help of this article, we would like to share our perspective on this industry its different aspects and even on whether it needs to be regulated.

Lawsuit funding is basically ‘cash advances’ offered to plaintiffs and / or attorneys which are provided with a ‘promise’ to be repaid once the case settles or a favorable verdict is reached in court. They are termed as ‘funding’ instead of ‘loan’ for a reason, as they are ‘non-recourse’, meaning the borrower (plaintiff) does not need to pay back the loans if the case is not settled or an unfavorable verdict is reached. Moreover, the companies themselves don’t want to term the products as loans, the reason for it we will discuss later in this article.

Currently, the total business done by major players in the Lawsuit funding industry is over $100 million each year. The business is still in nascent stages and the companies involved in lawsuit funding, find it a lucrative field with chances of exponential growth in the coming years. Why is there so much hoopla over it and why it’s such an attractive field that new entrants are entering the business almost every week, these questions can only be answered once one knows how the business works.

How it works

Lawsuit funding companies advertise about their products / services with campaigns like “Need cash now? Get a cash advance for your pending lawsuit”. A plaintiff sees these advertisements and approaches the company. The company asks the plaintiff or in most cases the attorneys representing the plaintiff about the case details. Once the documents are submits, they evaluate the merits of the case and hand over the money to the plaintiff if they find the case ‘suitable’. The pre settlement funding advances can be anywhere between $500 to over $100,000 depending on the nature of the case and what the funding company estimates the value of the eventual settlement or verdict

The lawsuit funding company charges an interest per month, over the amount it has advanced but rather than saying ‘interest charged’ they prefer using the term ‘fee charged’ and call it ‘monthly fee’.

If the case is settled or the plaintiffs is awarded damages he / she needs to pay back the amount (principal) given as advance along with the cumulative ‘monthly fee’. If the plaintiff loses the case he / she owe the funding company nothing.

The ‘don’t pay if you lose’ nature of the funding is what attracts plaintiffs to apply for these type of funding and also works as a great PR tool for the funding companies.

NOTE – The State of Florida and the Florida bar association prohibits its members from getting involved in any process of evaluation by a Lawsuit funding company. (We think this this is a good policy for personal injury lawyers

 Monthly Fee (Interest rate)

This is where the problem and ‘controversial’ nature of the business lies. The average interest rate (what is termed as monthly fee) charged by the leading industry players is in between 2.5%- 5% P.M. At times, it can be as high as 15% P.M.!

Let’s look at it in a detailed financial perspective –

Suppose a plaintiff gets a funding of $10,000 for his /her case from the funding company at an interest rate of 3.5% P.M.

If he eventually gets a settlement or is awarded the damages claimed, this is what he / she will owe the company –

After 1 year- $15,639

After 2 years – $23, 632

After 3 years – $36,960

That means if somehow the case drags on for 3 years, which is likely in a lot of cases, the plaintiff will owe nearly 4 times the amount he borrowed. This is when we chose an interest rate below the median of what the industry charges; sometimes the interest rates are as high as 100% a year.

This is the perhaps the most significant reason why the lawsuit funding industry doesn’t terms its products as Loans and instead terms it as ‘advances’, as soon as you tell someone that you are providing them a loan, the first question they ask is – what is the interest being charged? What better way to conceal the information than selling the product under a different name.

The other significant reason for not calling the products as loan is to avoid falling under the usury laws. The usury laws arethe laws which prohibit a business entity or individual from charging excessive rates for the loans offered.

 

The funding companies project their ‘cause’ as helping the plaintiffs when they are in dire straits. They offer reasoning that if they will not offer their services the plaintiffs will be compelled to take lower value settlements as due to their financial condition, they won’t be able to fight their cases for a long time. The question to be asked is – don’t all types of predatory loan providers prey on distressed borrowers?

Regulations

Personal injury law

Currently, there are no regulatory authorities who govern the conduct and practices of this type of funding companies. Unlike other financial institutions which have fiduciary duties toward their clients, the lawsuit funding companies don’t come under any rule of law in terms of how they conduct their business or what interest rate they charge etc. It seems like the companies themselves don’t want to be regulated and are trying to avoid regulations. What else can explain the refusal to use the term ‘loan’ and advertising non-recourse funding, if not to avoid the regulatory authorities?

Conclusion

We agree that at times a plaintiff has to go through daunting financial times, especially plaintiffs of personal injury cases and at those times they need immediate money but that should not be a reason for a company or an organization to take advantage of. We don’t dispute the fact that in some cases getting a funding like this can really help but being attorneys ourselves we know law is not all that simple. One cannot ‘estimate’ anything when a case is sub judice and it affects the client-attorney relationship when a client starts estimating about monetary compensation he/she will be awarded.

Additionally, we will advise plaintiffs to make use of lawsuit funding only when they have exhausted all other options available to them. It can be a really painful experience when after fighting for long, when a judgment is declared and compensation is awarded, most of it goes in paying the funding and in such circumstances instead of questioning the reasoning behind taking such funding in the first place, most plaintiffs complain that the attorney or law firm representing them couldn’t get a ‘fair’ compensation awarded to them.

If you have any questions about your personal injury case feel free to email or call me.

How much does it cost to hire a Personal Injury Attorney (Clearwater Florida)

How much does it cost to hire a Personal Injury Attorney in Florida

 

An attorney or Law firm charge fees for the Legal services either on a per hour basis or Contingent fee basis, though some also charge a ‘fixed’ fees. Most of the attorneys or Law firms who handle personal injury, medical malpractice or workers compensation cases work on a Contingent fee basis.

 What is Contingent fee?

It is an arrangement between a client and the attorney (or law firm) who will be legally representing the client, in which the client agrees to pay a pre-decided fixed share (percentage) of damages awarded to the client if the result of the litigation is in favor of the client.

The Contingency fee agreement has to be signed by the attorney (or law firm) and the client they are going to represent, prior to taking up the case. The percentage of the recovery to be kept by the attorney (or law firm), the costs that will be deducted from the recovery and in what ways will they be deducted, all of this needs to be stated in the agreement.

Normally, no fee or expenses incurred in the suit is paid in advanced by the client, if the attorney (or law firm) works on contingent fee basis. (Some attorneys or law firms might charge for the costs associated with the case like medical reports, filing fee etc., even if working on contingent fee basis)

There are certain Rules of Conduct prescribed by the Florida Bar, which includes the rules for charging fees and costs for Legal services. The rules contain certain limitations that the Florid Bar imposes on charging Contingent fee in cases of Personal Injury, Medical Malpractice (keep in mind medical malpractice caps) and other tort cases.

Limitations

  • 33.33% of any recovery till $1 million – If the case is settled prior to filing of an answer or demand for appointment of arbitrators or if a lawsuit has already been filed, as late as the time till defense files an answer or makes a demand for appointment of arbitrators.
  • 40% of any recover till $1 million – If the case is settled after the lawsuit has been filed and the defense has filed an answer or makes a demand of appointment of arbitrators or, if neither has an answer been filed nor demand for appointment of arbitrators is made, the expiration of the time period provided for such action, through the entry of judgment. Keep in mind, that your attorney will ask for your approval when filing suit.
  • 30% of any recovery between $1-2million (In the first two scenarios) – If the case is settled, or a favorable verdict is reached in trial.
  • 20% of any recovery above $2 million (In the first two scenarios) – If the case is settled, or a favorable verdict is reached in trial.
  • 33.33% any recovery till $1 million, 20% of recovery between $1-2 million and 15% of  recovery above $2 million – If liability is admitted at the time of filing answers and the case goes on trial only for deciding on the damages.
  • 5% additional on any recovery– If the case is appealed / requirement of action for recovery of the Judgment / Post-Judgment Relief.

Charging fee above the standard is considered to be ‘excessive’. However, if a client wishes to pay a greater fee, they can approach the court before filing the case or during filing their case for removal of the fee limitation.

Additional Limitations for Medical Malpractice Cases

There are additional limitations placed on how much a Lawyer can charge for medical malpractice cases by Article I, section 26 of the Florida Constitution.

  • Victims of Medical Malpractice are entitled to no less than 70% of first $250,000 in damages ( excluding the costs )
  • Victims of Medical Malpractice are entitled to 90%  of all damages above $ 2,50,000 (excluding the costs)

If an attorney is representing a client of Medical Malpractice, he is bound by the rules of conduct to first furnish a copy of the constitution’s fee limitations, before taking up the case. In addition to this an attorney is required to inform the client that these limitations will be in effect, till the client waives the constitutional limitation of Medical Malpractice fee and the attorney should also advise the client that they can consult with other attorney(s) before waiving the right or can also ask for a hearing before a judge for explaining the waiver.

If the client opts for waiving the constitutional right, the client is entitled to receive a detailed waiver form from the attorney.

Fee Division

If a personal injury or property damage (resulting from wrongful conduct) case is being handled by two attorneys, then the attorney with primary responsibility is entitled to no less than 75% of the total fee while the attorney with secondary responsibility is entitled to no more than 25% of the total fee.  In a case where both the attorneys take equal responsibility of the case, the court will decide on how the fee will be split.

When a case of a client ends, an attorney is required to furnish itemized bill of the costs and expenses incurred in the particular case and if the case has been won then the fee too. The client needs to sign the bill statement along with all the attorneys who represented the client in the case.

Points to remember –

  • It is not always possible for a lawyer to give you a complete estimate while taking up your case.
  • The associated costs involved in a case are uncontrollable as they depend on a variety of factors.  Extra costs may be necessary to get your case settled or to trial.
  • Some attorneys charge a ‘retainer’ or ‘advance’  for costs involved even though they might be working on Contingent fee basis, these ‘retainer’ or ‘advance’ can be refundable or non-refundable.

When hiring an attorney you should first meet them and get to know how they work.  It is important to establish a relationship with them, because they will be taking case of an aspect of your life for a few months to years.  If you’d like to know more about attorneys fees, or if you have been involved in an car accident please call mark today 727-386-9677 or go to www.1forjustice.com

 

Mark Perenich’s verdict

Please check out my spot in  this recent publication concerning a recent 54 million dollar verdict.

  • Exec must pay $54 million for killing his wife’s friendA former globe-trotting executive who was convicted of killing his wife and her friend was ordered to pay $54 million by a civil jury for the death of his wife’s friend.Patrick A. Evans, once a vice president at international electronics company Jabil Circuit who handled the company’s business in Aisa, shot his wife, Elizabeth, and her friend Jerry Taylor in their Florida condo. A jury convicted him of murder and recommended the death penalty. Taylor’s family sued in a wrongful death lawsuit.

    Attorney Mark Perenich

    The verdict includes $4 million “for the endless pain he has inflicted” against Taylor’s 10-year-old daughter Francesca, said attorney Mark Perenich, who handled the case. Francesca, who was 7 at the time of the killings, was interviewed in a videotaped deposition, which was played for the jury, Perenich said.Although Evans is unable to pay $54 million, the former exec may have assets to cover some of the award, including a waterfront home, a condo, and an airplane, Perenich said.

    Another lawsuit seeking monetary damages on behalf of his wife’s family is underway.

    Evans will find out at the end of this month whether he will be sentenced to death.

    Learn about personal injury or contact an attorney to answer your legal questions.

    http://blogs.lawyers.com/2012/07/editors-choice-jury-awards-edition-41/