Wisconsin Business Law and Litigation
A blog dedicated to Wisconsin business law and business litigation matters, authored by Chris Moander of the Moander Law Firm.

Three different blogs, all focusing on business legal matters, have touched on a common (but foolish) business habit: copying other web site’s terms of use.

Terms of use are contracts between the owner of the site and the person viewing the site. As I’ve discussed before, contracts must be drafted with precision or they will not have the intended effect - namely, the contract can’t help you reach your economic goal nor can the contract adequately protect you or your business. Therefore, it is well worth the cash to get customized terms of use drafted, especially when you have a unique and specialized!

H/T: Rush Nigut, Jonathan Friedan, and Brett Trout.

Moander Law Firm

Chris Moander is an Attorney handling business law matters, business litigation, and collections matters throughout Wisconsin.

Unfair competition
The tort of Unfair Competition encompasses a variety of wrongs that occur between competitors. These wrongs fall into two major categories: (1) Intellectual property concerns and (2) misleading actions.

Examples of IP issues include infringement/dilution of trademarks and service marks, theft of trade secrets, copyright infringement, and other misappropriation of another business’s IP. I’ve written a bit about these areas here, here, here, and here, so I won’t go into detail on them. Suffice it to say that it is a prudent move to have someone (preferably and attorney) evaluate your IP ideas before you use them, especially if a new employee introduces you to a fantastic idea that might have come from a prior employer - lots of money at stake in IP matters.

A business has one major concern under the “misleading actions” category. Commercial defamation, also known as product disparagement, when a business makes false communications regarding another business or another business’s products. If a communication deters individuals or businesses from dealing with the business subject to the communications, whoever made the communication is liable for damages. Communications can come in print (libel) or via oral statements (slander). Bear in mind that a statement is defamatory if it tends to harm the reputation of another so as to lower him (it) in the estimation of the community or to deter third persons (or parties) from dealing with him (it).

I have not delved into all the potential business competitor torts out there because business torts, as is frequently the case with the law, are highly fact dependent. However, it is good business sense for a business owner to know about potential bases of liability. I hope my posts at least open some eyes of Wisconsin business owners.

Moander Law Firm

Chris Moander is an Attorney handling business law matters, business litigation, and collections matters throughout Wisconsin.

Gasp! Theft occurs in the workplace? Surely not! Oh, it’s sad but true - not all employees are honest and sticky fingers while on the clock often pick the pocket of the employer.

John Philips posted three articles on employee theft: Part I, Part II, and Part III.

I think the gist of these posts centers on two points that are always important in dealing with employees: (1) having solid policies in place and (2) enforcing them. Relationships do matter and they help make a business run well, but as John indicates, good relationships won’t stop people from boosting cash or supplies - workplace policies are king.

Moander Law Firm

Chris Moander is an Attorney handling business law matters, business litigation, and collections matters throughout Wisconsin.

My title is for you Pulp Fiction fans and another attempt at humor on my part. Where do you draw the line with your in-house collections and hand over the burden to a collections attorney? That’s not an easy question to answer, but there are a few markers that may help.

1. The account is 90 days overdue - if you’ve not heard from the debtor in three months, especially RE payments, the time has come to look at alternative methods of collecting.
2. You cannot reach the debtor by phone, mail, email, or any other method - yup, he/she/it is hiding from you. However, hiding does as well when you have the power of the judicial system behind you (although using lawsuits may not always be the best option)
3. All of a sudden, the debtor alleges some dispute over the debt, yet refuses to divulge the relevant details (date, nature of disputed charge, etc) of the dispute to you, or anyone for that matter.
4. The debtor breaks promise after promise after promise to pay - you want to believe the debtor will pay, but this tactic just buys time for the debtor.
5. You learn that other creditors are facing the same behavior by debtor as you are - i.e. not getting paid.

As always, this list is by no means exhaustive - there are a whole array of other signals indicating that you should consider outside collections help. Essentially, it is your company’s call whether to send debts out to an independent collector - consider how your internal collection team’s time is better spent working with willing or forgetful customers, versus investing resources chasing people who will not work with you until pressure is applied.

Moander Law Firm

Chris Moander is an Attorney handling business law matters, business litigation, and collections matters throughout Wisconsin.

As more food for thought, I’ve guest posted on my friend Jon Groth’s blog. You can read my post here on the primary collections laws that apply to Wisconsin.

Moander Law Firm

Chris Moander is an Attorney handling business law matters, business litigation, and collections matters throughout Wisconsin.

No, that’s not really a joke - it’s the point of the following post, that properly organizing your accounts receivable files and other debt-oriented materials is a really good idea!

So, the time has come to face a debtor that has vexed collection efforts at every turn. Your collector is lined up and has begun preparations for what may lie ahead. When you turn over the debtor’s file, what will the collector find?

Organization is key in a collection matter, but is secondary to timing. As you have likely encountered, debtors (feeling desperate) often resort to running, hiding, liquidating assets/collateral, and any number of other evasion tactics. To reduce losses caused by debtor avoidance maneuvers, your business might consider confirming that certain documents are preserved, properly organized, and easily accessible. It is likely you have an existing need to maintain these records, including:

• The name, address, telephone number, Social Security number, a copy of the debtor’s driver license, and other information used to identify the debtor.
• If the debtor is a business, the contact person at the company
• Credit applications
• Debtor-signed contract or agreement
• Financial statements
• Ledger’s reflecting the debt, including the life cycle to date of your company’s relationship with the debtor
• Correspondence to debtor from your company (i.e. in-house collection documentation): emails, letters, and any other kind of documentation
• UCC financing statements
• Copies of debtor’s checks, including those that cleared and any declared NSF.
• Tax returns (for both individuals and companies)
• Records of prior relationship(s) between debtor and creditor to establish a course-of-dealing
• Any other relevant or applicable information

The list above isn’t exhaustive, but it conveys the idea of what information your business will need to organize and secure. When your collector examines these files, he or she will be able to: (1) get a sense of the debtor’s legal composition (otherwise extra research may be required); (2) potential alternatives to litigation (i.e. arbitration); and (3) whether interim relief is available (pre-suit garnishments). Because time is of the essence, you collector can move faster with organized files and thus increase the likelihood of collection and reduce costs across the board - the key value in proper document organization!

Moander Law Firm

Chris Moander is an Attorney handling business law matters, business litigation, and collections matters throughout Wisconsin.

Well, it depends. Often, when collections is mentioned, people think of credit cards and the like…some feel like collections is dirty word reflecting hardball collectors calling you at 2 am.

Let’s look at the other side of this coin. Your company worked hard to seal a lucrative contract, only to have the other side simply stop performing or never ship the goods. They won’t accept your phone calls, nor your mailings. You dedicated considerable time and money to winning the agreement, in some cases rejecting offers from others willing to work with - all to your detriment! You sue and win - now what?

Perhaps a competitor has been using your trademark for some time, causing you to sue her and you win. She’s not paying up and she’s made that clear as crystal.

Or maybe your business offers financing to consumers so they can buy new washers and dryers. The payments begin to come in late and then, not at all. You come to find that some consumers have vanished, along with your collateral.

Litigation makes businesses shudder. However, collecting what is owed to you does matter, for a number of reasons: (1) the cost of collecting is less than the debt owed (in some cases); (2) you want to make it clear that you do mean business when debts are owed to you, so people and entities that contract with you are serious in their commitments; (3) if you don’t collect, a major part of your business may die (think banks), to name a few.

My point is simple: sometimes, many times, it is imperative that your company collect (or at least try) - your bottom line may be at stake if you don’t.

www.moanderlawfirm.com

Chris Moander is an Attorney handling business law matters, business litigation, and collections matters throughout Wisconsin.

Rush Nigut posted a slew of good links to information on purchasing a franchise, including some stuff by Teri Rasmussen, the SBA, and Mike Hamblin - all good sources to get a handle on how the franchising process works.