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August 3
1975 - Henry Mayo Newhall (Memorial) Hospital opens with 100 beds [story]
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It's the Law | Commentary by Carl Kanowsky, Esq.
| Friday, Mar 14, 2014
Carl Kanowsky, Esq.

Carl Kanowsky, Esq.

Sometimes, we forget the basics.

For example: The time we got our youngest son all packed and ready to spend the next semester in Europe. We got in the car, all set to go to LAX, when we realized there was no gas. I had to make a quick stop, but fortunately we still made it to the airport.

Or the time we got the picnic basket all set with delicious chicken, mouthwatering potato salad and a dynamite wine.

We got to the lovely, shaded spot — oops, we forgot the plates and silverware.

I also remember making banana bread. I followed the recipe to a “T” and put it in the preheated oven. Only then did I discover I was missing an ingredient — the bananas.

These kinds of mishaps and miscues occur in business all the time.

Sometimes, they’re perfectly innocent mistakes; other times, they are excuses to avoid performing.

Like the guy who was short of funds, so he’d send a check to pay the bills but “forget” to sign it. That usually gave him a 30- to 45-day float. But lest you think of using this scheme, he won a three-year vacation courtesy of the state at Folsom.

A client had an agreement with a major entertainment company. He provided many of the props for a company production. The company prepared a full contract, including language about return of the props after they were no longer needed, and making final payments.

The props were used for a long time, but when the need for them ended, my client had a difficult time getting them returned and getting the final payment.

The entertainment company – the same company that had been using the props all along and had drafted the contract – now disavowed it, saying they never signed it. After some forceful letters, we finally convinced them to do the right thing, but it was a struggle.

In the latest variation on this theme, someone else tried this same argument. In the case of Good Feet Worldwide v. Schneider, the defendant Schneider argued that a franchise contract he was operating under should not be enforceable because he hadn’t signed it.

Schneider’s argument was the statute of frauds (a rule of law which, among other things, says any contract that lasts more than a year must be in writing) was not satisfied as there was no “writing” establishing a contract.

The court, in an unusually brief, three-page opinion, said, “Not buying it.”

Instead, citing other cases, the judge ruled: “Several papers, only one of which is signed by the party to be charged, may be considered together to constitute an adequate memorandum of the contract.”

Thus, “It is not necessary that the party to be charged sign all of the documents comprising the contract, if one of the documents in the series, or all of the documents taken together set forth clearly and completely all of the essential elements of the contract.”

Since Schneider had signed territory and location agreements, which referenced the franchise agreement, the statute of frauds had been satisfied.

So, the lesson to you? Even though the franchisor won this case, don’t rely on it. Instead, don’t sign anything until you have the entire agreement ready and acceptable. And make sure the other side signs at the same time you do.

Keep copies of the signed agreements.

Simply put, don’t forget the basics.

 

Carl Kanowsky of Kanowsky & Associates is an attorney in the Santa Clarita Valley. He may be reached by email at cjk@kanowskylaw.com. Nothing contained herein shall be or is intended to be construed as providing legal advice.

 

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HMNMH
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