Are Commercial Leases Negotiable?

In a word - yes.

Depending on the amount of leverage you have, landlords are usually open to negotiating various terms prior to a commercial tenant signing a lease.

As a former employee of a large national shopping center responsible for drafting and negotiating commercial leases, I can tell you that landlords usually draft commercial leases severely slanted to favor the landlord.

The landlord knows that there are one of three things that can happen - the potential tenant can walk away after reading the lease (unlikely if the potential tenant has gotten to the stage of getting a written lease), sign the lease as is, or negotiate specific terms of the lease before agreeing to sign.

As such, it is imperative that before signing a commercial lease, that the potential client determine what terms are important to him/her and attempt to negotiate those terms. Unless the tenant is very sophisticated in the area of lease negotiation, it would be prudent to get assistance from a well qualified attorney.

In my practice (and my life prior to practicing law), I have had the benefit of negotiating and drafting commercial leases from both sides of the fence - for both the landlord and tenant.

If you are a commercial landlord or prospective commercial tenant, feel free to call the Scott D. Wu to assist in negotiating your lease to get terms that are more beneficial to your specific needs.

Looking Up Businesses in California

Ever wonder if the company you are doing business with is registered with California?

If so, the California Secretary of State has a great tool to look up registered Corporations, LLCs (Limited Liability Companies), and LPs (Limited Partnerships). If the company is registered with California, you should be able to find out when the company was registered, its current status, its address and its agent for service of process. To start your search now, click here (http://kepler.sos.ca.gov/list.html).

Domain Name Scams & Small Businesses

Many business owners know that internet marketing can be very beneficial for the company's bottom line. Business website and blogs are going up every day - and the scammers know it!

We are all well aware of spam and phishing scams clogging our email inboxes. Now, at least one outfit is trying to scam businesses of all sizes via snail mail.

My office, along with many other businesses, received a piece of snail mail that at first glance appeared to be renewal for a website domain name I own. The title of the letter is "Domain Name Expiration Notice". Included prominently in the notice was a date I had to respond by.

I almost fell for it.

However, I did not register my domain name through the company that sent the solicitation. After a careful reading of the mailing, I realized it was merely a cleverly disguised offer to transfer my domain name from my existing website host to this company. I had to respond by a certain date for their "best savings". When comparing these "best savings" rates to other hosting companies, I realized that these rates were not, by any means, competitive.

Before responding to any correspondence sent to you, make sure you carefully review the complete contents of the correspondence before responding - you may be giving your permission for a company to do something you do not want them to do.

Scott D. Wu is an attorney licensed to practice in California. His firm focuses on various aspects of business law, contract drafting and negotiation, family law, personal injury and real estate.

The information on this blog is not legal advice, nor is it intended to create an attorney-client relationship. Legal questions should be directed to a lawyer of your own choosing.

In House Counsel for Small and Medium Sized Businesses

Many large businesses have their own in house counsel that handles the company's legal matters paying each attorney upwards of six figures annually.

Most small and medium sized businesses can't afford to pay a lawyer that type of money just to have an attorney on call. Instead, these smaller businesses traditionally have two options. They can either hire an attorney for every matter that comes up, sometimes paying many thousands of dollars or they can choose not to hire an attorney and attempt to handle the situation without legal counsel.

Realizing that small and medium sized businesses also need effective and reasonably priced legal counsel, the Law Offices of Scott D. Wu has created a program that can accommodate California businesses of any size - whether your company is national, international, local, or any where in between.

Feel free to call Scott D. Wu to discuss your company's needs and requirements.

Happy Holidays!

I wanted to take the opportunity to wish all of you a very happy holidays and a happy new year.

I hope 2008 is a successful year for all of us!

~Scott D. Wu
Attorney at Law

Gift Certificates in California

Gift certificates are a great way for California businesses to increase their bottom line. Shoppers that do not know exactly what to give their friends or loved ones can instead give a gift certificate. Before issuing gift certificates (or gift cards), a business should be aware of the various requirements that California law imposes on gift certificates one of which is discussed in this post.

In California, a gift certificate usually cannot expire*.

Exceptions to this rule apply if the gift certificate is issued on or after January 1, 1998, the expiration date appears on the front of the gift certificate in capital letters in at least 10-point font and any of the following apply:

1. If the gift certificate is for an awards, loyalty or promotional program where money or any other thing of value is not exchanged for the gift certificate;
2. If the gift certificate is sold below face value at a volume discount to employers or nonprofit and charitable organizations for fund raising purposes if the expiration date on the gift certificates is not more than 30 days after the date of sale; or
3. If the gift certificate is issued for a food product.

Logically, this general rule makes sense. The purchaser is essentially advancing the gift certificate issuer his/her money. In exchange, the business will provide a product (or service) at a later date to the person that holds the gift certificate. The issuer would unfairly profit if it required the gift certificate holder to redeem it within a certain amount of time.

There are other requirements that an issuer of a gift certificate or gift card must follow to be in compliance with California law. If you or your business need further assistance, please do not hesitate in contacting our office.

Scott D. Wu is an attorney licensed to practice in California. His firm focuses on various aspects of business law, contract drafting and negotiation, family law, personal injury and real estate.

*California Civil Code Sections 1749.5-1749.51 govern gift certificates issued in California.

The information on this blog is not legal advice, nor is it intended to create an attorney-client relationship. Legal questions should be directed to a lawyer of your own choosing.

Employee Rest Breaks and Meal Periods

In California, an employer must provide his employee rest periods (breaks) and meal periods if the employee's work period meets certain requirements.

An employee is entitled to one (1) paid ten (10) minute rest break for every four (4) hours worked or major fraction thereof. The breaks should be as close to the middle of the work period as reasonably possible. These rest periods are not required for employees that work less than three and a half hours for the day in question.

Employers must provide a 30 minute meal break after five (5) consecutive hours of work. However, if the workday consists of less than six (6) hours, the employee and employer can agree to waive the meal break. If the employee works more than 10 hours per day he must be provided a second 30 minute meal break. However, if the workday is 12 hours or less, a second meal break can be waived by the parties if the first meal break was not waived.

An employee is entitled to a paid meal period when the nature of the work prevents the relief from all job duties and the parties agree in writing.

California law may provide exceptions to some of these requirements in certain situations. Please contact the Law Offices of Scott D. Wu if you need further assistance regarding this matter.


Scott D. Wu is an attorney licensed to practice in California. His firm focuses on various aspects of business law, contract drafting and negotiation, family law, personal injury and real estate.

The information on this blog is not legal advice, nor is it intended to create an attorney-client relationship. Legal questions should be directed to a lawyer of your own choosing.

A Corporation, a Limited Liability Company (LLC), and a Guaranty♦♦

In California, one of the many attractive benefits of forming a Corporation (whether S or C-Corp) or Limited Liability Company (LLC) is the protection it offers the business owners from the business' debts and liabilities. Many, if not all, lenders and others that extend credit to one of these companies are cognizant of the protection these entities provide.

One way lenders can still hold an individual liable for a corporation's or LLC's debt is to have that individual guaranty the company's contract. The person that signs a guaranty promises to pay the debt for the entity that signs the contract in the event of default.

For example, ABC Corp takes out a small business loan with X Bank. Before X Bank lends money to ABC, X Bank will require John Director, a principal of ABC Corp, to sign a guaranty for the loan. Several months later, ABC Corp defaults on the loan. X Bank now sues ABC Corp and John Director personally for the balance due. In this situation, if a guaranty was not signed, X Bank could only go after ABC Corp and not John Director.

Both the guarantor (the person that signs the guaranty) and the lender can learn from this scenario.

Depending on the circumstances, John Director in our example, might be able to show that the guaranty is not enforceable. If he can do this, he avoids liability on ABC Corp's loan. One way he can accomplish this is to show that the guaranty lacked a critical element of contract formation - for instance, mutual assent, consideration, lawful purpose, etc.

From the lenders stand point, in order to have the guaranty hold up in court (or arbitration), all the elements of contract formation must be met if the lender wishes to have a valid guaranty.

If you signed a guaranty and have questions or would like assistance in drafting a guaranty, please feel free to contact our office for assistance.

Scott D. Wu is an attorney licensed to practice in California. His firm focuses on various aspects of business law, contract drafting and negotiation, family law, personal injury and real estate.

The information on this blog is not legal advice, nor is it intended to create an attorney-client relationship. Legal questions should be directed to a lawyer of your own choosing.

Arbitration Clauses

Litigation. The term literally sends shivers down the spine of many business owners. Everyone has heard the story of astronomical jury verdicts and out of control attorney fees related to these court cases. Many companies, both small and large, have included arbitration clauses in their contracts - whether they are contracts with their employees or contracts with other businesses for goods and or services.

A properly drafted arbitration provision in a contract reflects the parties' agreement to resolve issues that arise out of their contract through the arbitration process. The parties usually waive litigating their claims in court.

Although the cost of filing an arbitration claim is more expensive than filing a case in the local superior court, the parties involved will likely save money in the long run by controlling, and even perhaps eliminating, certain procedures within the arbitration process. Parties have no direct control of similar stages in court litigation. An example of a procedure that may be avoided completely in the arbitration process is the discovery process - a fact finding stage that every party has a right to if they are directly involved in court litigation.

However, arbitration is not without its negatives. One of the downsides of arbitration is that an arbitrator, or arbitrators, may rule based on equity (essentially, what the arbitrator deems is fair) or law. Courts usually rule based on law.

There are many positives and negatives to including an arbitration provision in a contract. If you need help in deciding if an arbitration clause is proper in your situation, need help drafting one, or if you have a dispute that needs to be resolved in arbitration, please feel free to contact the Law Offices of Scott D. Wu for assistance.

The information on this blog is not legal advice, nor is it intended to create an attorney-client relationship. Legal questions should be directed to a lawyer of your own choosing.

Scott D. Wu is an attorney licensed to practice in California. His firm focuses on various aspects of business law, family law, personal injury and real estate.

The information on this blog is not legal advice, nor is it intended to create an attorney-client relationship. Legal questions should be directed to a lawyer of your own choosing.

Does a Corporation or Limited Liability Company Need to Have Annual and/or Quarterly Meetings?

In California, forming a Corporation (C-Corp or S-Corp) or Limited Liability Company (LLC) are very good ways to protect the principals of the business from personal liability. However, these entities are not fool-proof and do not offer “bullet proof” protection. Each of these entities has documents, commonly known as bylaws or operating agreements, that determine how the company is to be run.

Most company bylaws or operating agreements designate, among other things, when the company is to have meetings. If a company fails to have these meetings or fails to properly record what happens at these meetings, the company is ripe to have its corporate veil pierced.

Piercing a corporate veil occurs in litigation when the party suing the company shows that the business entity should be disregarded and a court should attach personal liability on the company’s principals. One of the most common ways a corporate veil can be pierced is by showing that the principals ignored the formality required by their company – most commonly, not having meetings as outlined in the company’s bylaws or operating agreement and the documents that reflect these meeting were held.

If your company needs assistance in making sure it is in compliance with the rules and regulations that govern it or you would like to form a business entity to protect your personal assets, feel free to contact us for additional assistance.

Scott D. Wu is an attorney licensed to practice in California. His firm focuses on various aspects of business law, family law, personal injury and real estate.

The information on this blog is not legal advice, nor is it intended to create an attorney-client relationship. Legal questions should be directed to a lawyer of your own choosing.