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business contract

What Makes a Contract Legally Binding in Florida?

A contract is an agreement between people or entities where one party agrees to perform a service or deliver goods for something of value. Contracts help define the terms of partnerships and make sure everyone is on the same page when providing goods and services. However, is every piece of paper signed by two parties legally binding? Whether you are offering freelance services or merging corporations, all contracts need the following elements to be legally binding. 

Offer 

In a contract, there must be a specified action offered in exchange for something of value. The action could be the delivery of a product or the performance of a service. The contract should specify the details of that product or service, including the scope of work, timeframe for delivery, and compensation. A contract must have the capacity to be fulfilled to be legally binding, meaning the person entering the contract must be able to perform the duties specified and be of legal age to do so.  

Consideration 

The offer must be in exchange for something of value, which is called the consideration. The consideration solidifies the transaction between the promise of one party and the payment from another. The consideration is often money for the product or service; however, the only stipulation is that the consideration is something of value to be legally binding. Whatever the consideration is, make sure it is clearly stated in the contract. 

Acceptance 

The third crucial element of a legally binding contract is acceptance. Signing a written contract is one of the most straightforward ways to specify acceptance, but that is not the only way. The other party can also administer acceptance orally or through a video, email, or text. Florida law requires specific contracts to be in written form to be enforceable, such as real estate ventures, when the contract terms cannot be completed in one year. There may be some instances when requiring a single signature at the bottom of a contract is not enough to make it legally binding. In these cases, both parties may need to initial specific clauses.

Mutuality

The last element of a legally binding contract is to ensure both parties mutually understand and agree to its terms. Referred to as a “meeting of the minds,” there must be evidence that both parties understood all aspects of the contract and are entering it willfully. Signing a legally binding contract is one way to show mutuality. Even if a contract is not signed, specific actions such as distributing payment or agreeing to terms in an email may also prove to a court that both parties understand and agree to the offer, consideration, and terms. 

Central Florida business Attorney 

Our experienced commercial lawyers at The Boutty Law Firm can help draft legally binding contracts that protect you and your business from legal issues down the road. If you need to sign a contract and are unsure what it means, do not sign it without speaking with a business attorney. Call our office at 407-622-1395 and schedule a consultation today. 

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Probate House

Understanding the Probate Process

Probate plays a big part in the estate planning process for many families. If your loved one’s estate is going through probate, it is important to understand what to expect. If you are the executor of a will or are in the estate planning process yourself, here is what to expect from probate proceedings:

The probate process

Probate is a legal proceeding that has a formal beginning and conclusion in the court system. Below are the steps a typical estate will go through. 

Presentation

The probate process begins when a family representative or a will’s executor meets with a probate lawyer and provides relevant documents, including the will, the death certificate, financial statements, and property deeds. The lawyer will present these documents to the probate court, which marks the beginning of the probate process. 

Will validation 

During this step, the probate court will make a legal determination whether the presented will is valid and can be executed. If there is no will, the court will use Florida law to determine beneficiaries. The will’s executor will be given legal authority to handle the estate as well. The will’s executor will be the primary point of contact for questions and issues that may arise during the probate process.

Inform beneficiaries

It is the executor’s responsibility to inform beneficiaries stated in the will. Beneficiaries have the right to know that they were included in someone’s will so they can be involved with the process, ask questions, and contest any parts of the will’s execution. 

Notify creditors 

Next, the executor will inform any creditors that the estate is in the probate process. Creditors can then make claims on the estate if they are owed any debts from the person who passed away.

Estate inventoried and valued

After creditors and beneficiaries are notified, it is time to inventory and value the current estate. The executor will gather documents and assets such as real estate property, bank accounts funds, cars, and other personal assets to value the estate as a whole. 

Estate bank account

Any funds from bank accounts and sold assets should be placed in an estate holding account. Funds from this account will be used to pay creditors while the estate is in the probate process. 

Debts paid

After the bank account is established, funds are used to pay off debts and necessary bills. 

Division of assets

Once debts are paid, the remaining assets are divided among the beneficiaries according to the will.

Petition of discharge

Once the creditor claim period has ended and the assets are divided, the probate process is complete. A probate attorney will present documentation to the probate court that the estate was handled correctly. If the court agrees, it will sign an order of discharge, officially concluding probate. 

Probate attorneys in Central Florida

When you work with a team of experienced probate lawyers, like The Boutty Law Firm, we will help guide you through the estate planning and probate process. We serve residents in Orlando, Winter Park, and throughout Central Florida. Call our office at 407-710-0774 to speak with a probate attorney today. 

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breach of contract

How to Deal with a Breach of Contract

What happens if a partnership is not working between two parties? A breach of contract occurs when a member of one party does not fulfill the terms of a prior agreement. Breach of contract cases aim to make each party whole, a process called rescission. An experienced business lawyer can help if you suspect a breach of contract has taken place in your business partnership.  

Determining whether a breach of contract occurred 

Before deciding whether you need to seek legal action due to a breach of contract, it is crucial to determine if a violation occurred. Three elements must be in place for there to have been a breach of contract. First, there must be a valid and legally binding contract between both parties. Second, one party must have suffered material damages due to the breach, whether it was time or money. Common types of breaches include: 

● Missed deadlines

● Incomplete or unfinished jobs

● Non-payment for services 

● Failure to deliver a product or service 

● Disagreement over contract terms 

● Disputes between business partners or employees 

● Failure to meet the terms of an agreement such as a lease, mortgage, or loan document

The legal process for a breach of contract

Both parties should work together to find a solution to fulfill the terms of the contract adequately. Before any legal action is taken, the complainant should send a demand letter to the offending party to get that person to fulfill the arrangement independently. If this happens, there is no need to seek further action. However, if the issue is not resolved, it is time to get an attorney involved. During a breach of contract case, a lawyer’s primary purpose is to step in and help both parties fulfill the contract as initially agreed. Lawyers then attempt to collect damages due to the breach and restore what was lost during that timeframe. 

Material versus non-material breaches 

Breaches of contract range in severity, and so do the consequences. The damages received depend on the type of breach that took place. Breaches of contract fall into two main categories: material and non-material cases. 

Material breaches 

Material breaches significantly impact the contract’s validity and may make the entire contract void. One example of a material breach would be if someone paid for an item to be delivered to a business but only received part of what was ordered. This type of breach puts the entire contract in jeopardy, and the complainant may sue for the total contract price.  

Non-material breaches

Non-material breaches are less severe and are not as serious as material breaches. You may only sue for damages incurred by this breach of contract with this type of case. The point of a non-material breach is to fulfill the means of the original contract and compensate for damages incurred. 

Breach of contract legal assistance in Winter Park, FL 

The Boutty Law Firm, P.A. has experience negotiating business law and breach of contract cases. If you entered a partnership with another business owner who isn’t meeting their terms of the agreement, it might be time to obtain legal assistance from our experienced attorneys. Call our office at 407-622-1395 to schedule a consultation. 

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mediation

Understanding Mediation Services

When two parties dispute over a civil, corporate, or family matter and cannot agree on a solution together, the help of a legal professional may be in order. However, many people want to avoid the formality and costs of a court proceeding. When this happens, using a mediator may be the best solution to help reach a mutually beneficial agreement.

What is a mediator? 

A mediator is an impartial, third-party entity with no prior relationship to either party that helps settle a dispute. Many mediators are lawyers with special mediation training. Mediation services are a structured and legal way to resolve conflict without a courtroom or a judge’s intervention. Often, mediators are the final attempt by both parties to settle a dispute without a formal courtroom proceeding. During a mediation conference, both parties meet and discuss their disagreement with the mediator. The goal of the meeting is for both parties to sign a settlement. This settlement is then sent and approved by a court. If the parties cannot agree, the case goes to a hearing before a judge or jury. 

Advantages of using a mediator 

The main goal of using a mediator is to use a formal party that is impartial and works to seek a common solution to the problem that benefits both parties. One of the most significant advantages of using a mediator is avoiding the formal court proceeding process and its associated costs. Both parties also control the outcome of their dispute instead of letting a judge or jury decide. Due to this, many people find they are happier with the result than if they would have allowed a judge to decide on the case. 

When to hire a mediator

Mediators work with clients to resolve a variety of conflicts, from divorce proceedings to corporate disputes. Here are a few of the common reasons someone may seek the services of a mediator:

Family law

In Florida, mediators are required for family law proceedings. Family law disputes commonly refer to conflicts during a divorce or estate administration. Mediators can help resolve disputes over topics such as the division of assets, alimony, and parenting plans. 

Corporate mediation 

Corporate mediation services include business disputes between employees, shareholders, and partnerships. One benefit to using a mediator for corporate disputes is the confidentiality avoiding a courtroom provides both parties. A mediator may oversee contract disputes, employment claims, and partnership conflicts. 

Civil disputes

Mediators can help resolve conflict for a large variety of civil disputes. One of the main benefits of using a mediator for a civil lawsuit is that both parties remain in control of the case’s outcome. 

Mediation services at The Boutty Law Firm, P.A.

We use proven negotiation strategies to help settle a wide variety of complex disputes through our mediation services without the formality of a court proceeding. We work with clients in Winter Park and surrounding communities. Call our office at (407) 622-1395 to learn more about our mediation services. 

 

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partnership handshake

Navigating Tax Season for Your Business Partnership

The year 2020 was unlike any other, the effects of which are reflecting in the 2021 tax season. Many who experienced layoffs, furloughs, or opened their own business now face some challenges in tax preparation. Suppose you are one of those who have entered into a business partnership. In that case, you may need some assistance to navigate through this new territory. A Business Law attorney can guide you through the wilderness of this process and help you make the best strategic decisions for your new business.

If you have entered into a business agreement with one or more partners, developing a Partnership Agreement is crucial to its formation. Think of it as your roadmap. Your Partnership Agreement should set terms for the nature of your partnership, define contributions from each partner, and specify how profits and losses are allocated. If you have not drawn up a Partnership Agreement, consider consulting with a Business Law attorney to help you cover all the details.

Understand Tax Reporting for Partnerships

A Business Partnership must obtain a Tax ID number. This number is called an “employer identification number,” or EIN. Since partners aren’t considered employees, don’t expect to receive W-2 forms for them or for your business to report income. A partnership, as an entity, doesn’t pay tax on the income received by the business. Instead, that income “passes through” its profits or losses to the partners. 

One partner is responsible for obtaining and completing IRS Form 1065. This form is a report of earnings or losses only; it is not a return to calculate what individuals may owe. Think of it as a template for gathering information from each of your partners. Subsequently, each member of your partnership must complete and return a Schedule K-1 form to report their individual share of income – gains or losses, deductions, and credits. Due to the financial details required for each partner to report, your Partnership Agreement is crucial in defining how each partner takes ownership and responsibility for your earnings and/or losses.

Lead Your Business Partners

The partner responsible for completing Form 1065 should distribute Schedule K-1 to all partners no later than March 15 so that they may include this in their annual personal returns. When you complete your Schedule K-1, it’s essential that you include:

  • Your employer identification number (EIN)
  • What type of partner you are
  • Your share of profit (or losses) at the beginning and end of the tax year
  • Your share of liabilities at the beginning and end of the tax year 

Schedule K-1 also requires each partner’s input for distributions, deductions, credits, tax-exempt income, and nondeductible expenses. 

Engage with a Business Attorney

Filing taxes for a new business, especially a partnership, can be a daunting journey. Consider engaging with a Business Lawyer to help you navigate tax preparation and find the best solutions for your partnership. The Boutty Law Firm, P.A. has the ability and experience to help your business succeed. Call The Boutty Law Firm, P.A. today at 407-883-1024 or contact us online to schedule your initial consultation.

IRS Tax Information for Partnerships

https://www.irs.gov/businesses/partnerships

Schedule K-1

https://www.irs.gov/pub/irs-pdf/f1065sk1.pdf

Partner’s Instructions for Schedule K-1

https://www.irs.gov/pub/irs-pdf/i1065sk1.pdf

Form 1065: U.S. Return of Partnership Income

https://www.irs.gov/pub/irs-pdf/f1065.pdf

Partner’s Instructions for Form 1065:

https://www.irs.gov/pub/irs-pdf/i1065.pdf

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