Florida Law: Statute of Limitations for Breach of Contract

What is the Statute of Limitations?

The Statute of Limitations is the deadline or time limit for when a suit must be filed. If you do not bring suit within the prescribed time limit, the lawsuit is banned and could be dismissed. In Florida, a lawsuit based on a written contract must be brought within five (5) years. § 95.11(2)(b), Fla. Stat. (2014). A lawsuit based on an unwritten (verbal or oral) contract is four (4) years. § 95.11(3)(k), Fla. Stat. (2014).

What is the Purpose of the Statute of Limitations?

One purpose of the Statute of Limitations is it creates predictability and fairness in regard to filing lawsuits. Potential defendants who may be liable to another party could be put on notice of a lawsuit but will not have it hanging over their heads forever. Also, plaintiffs must decide whether or not to bring a lawsuit in a timely manner.

When Does the Statute of Limitations Period Start?

Generally, the statute of limitations period begins to run from the time the cause of action accrues. § 95.031, Fla. Stat (2014). For causes of action on a contract, the action accrues and the statute of limitations period begins to run at the time of the breach.

However, all contracts are not created equal. Contract law is complex and some contain severe consequences. It is vital that you have an attorney draft and/or review all of your contracts to ensure that your rights are protected. I have helped numerous clients who have lost money because they did not understand the contracts they agreed to or did not know what to do when the other party breached the agreement. In most of these cases, the advice of a contract lawyer could have prevented their monetary loss.

Before you enter an agreement that requires giving or paying valuable consideration, schedule a free thirty minute case assessment with me. It is always wise to consult with an experienced contract lawyer to review the agreement, advise you on your obligations under it, and the consequences of breaching the agreement. You should always make sure you read and understand anything you sign. Seeking the advice of an experienced contract attorney can help you avoid costly mistakes.

If you have any questions, or to make an appointment for a free thirty minute case assessment, contact attorney Abigail D. Edelstein at (407) 862-9449.

Florida Statute of Frauds: Contracts that Must be in Writing to be Legally Valid

Contracts are part of our everyday personal and business lives. Most daily business transactions take place without a formal written contract. For example, a clothing store does not require each customer to sign a written contract each time they purchase something. They usually give customers a receipt or ask them to sign a credit card receipt.

The statute of frauds bars the enforcement of certain types of contracts unless they are in writing and signed by the party (or legally authorized representative of party) against whom enforcement is sought. § 725.01, Fla. Stat. (2014).

The purpose of the statute of frauds is to prevent harm that results from fraudulent conduct. Since oral promises are difficult to prove, requiring a signed writing is a way to reduce fraud and litigation. The requirement that important transactions, such as the sale of real estate or agreements with longer time periods, be in writing has been an effective tool against fraud. By requiring parties to put certain agreements in writing makes the parties review the agreement’s terms and conditions before finalizing the transaction.

Under Florida Law, some common contracts where the statute of frauds applies are as follows:

  • Contracts involving real estate transactions. 725.01, Fla. Stat. (2014).
    • This includes the sale of land, easements, and mortgages.
  • Contracts that cannot be performed within a one (1) year time period. 725.01, Fla. Stat. (2014).
    • The one (1) year time period refers to the time required for performance of the contract. This does not apply to contracts with an infinite duration.
  • Contracts to pay the debts of another. 725.01, Fla. Stat. (2014).
  • Leases with a time period greater than one (1) year. 725.01, Fla. Stat. (2014).
  • Guarantees by health care providers for any guarantee, warranty, or assurance as to the results of certain medical procedures. 725.01, Fla. Stat. (2014).
  • Contracts for the sale of goods valued at $500.00 or more. 672.201, Fla. Stat. (2014).

The lesson from this blog post is that some commonplace transactions, such as leases for a period more than one (1) year or contracts involving real estate, are subject to the statute of frauds and all terms must be in writing. This rule applies to the original agreement and any subsequent amendments or modifications. In order to avoid a statute of frauds issue, you should always work with an experienced Florida business attorney to ensure all agreements comply with the Statute of Frauds and all other requirements of state law. Even if the statute of frauds does not apply to a transaction, it is better to have a written contract just in case any disagreement arises in the future. If you have any questions, feel free to contact Abigail D. Edelstein at (407) 862-9449.

 

Elements of a Valid Contract

A contract is formed when certain requirements are met. The law will consider a contract to be valid if the agreement contains all of the following elements:

1. Offer and Acceptance;

  • Example offer: Joe offers to sell his car to Sally for $5,000.
  • Example acceptance: Sally agrees to buy Joe’s car for $5,000.
  • Can be done orally or in writing. Certain contracts must be in writing. See our Blog post “Florida Statute of Frauds: Contracts that Must be in Writing.”

2. An intention between the parties to create binding relations;

  • offer + acceptance = “meeting of the minds.” Meeting of the minds means the parties intend to be bound by their agreement.

3. Consideration;

  • Each party must promise or provide something of value to the other party. A bargained for exchange.
  • Example: Joe’s consideration is his promise to sell his car to Sally. In exchange, Sally’s consideration is her promise to pay Joe $5,000.

4. Legal capacity of the parties to act; and

  • The parties must understand what they are doing.
  • Example: Insane individuals lack capacity to enter into legally valid contracts because they cannot understand what you are doing. Minors do not generally have the capacity to enter into a contract (with some exceptions).

5. Legality of the agreement.

  • The purpose of the agreement cannot violate the law.
  • Example: A contract hiring someone to rob a bank or kill a person is invalid because it violates the law.

An agreement that lacks one or more of the elements listed above is not a valid contract.

Most contracts only need the above listed elements to be legally valid. In certain transactions, contracts must be in writing to be legally enforceable. See our Blog post “Florida Statute of Frauds: Contracts that Must be in Writing.”

A Florida business attorney will ensure that your contracts comply with Florida law. If you have any questions, feel free to contact Abigail D. Edelstein at (407) 862-9449 or make an appointment for a free thirty minute case assessment.

 

What is a Contract?

Contracts are part of our everyday personal and business lives. If you are a business owner or manager of a business, you deal with contracts when you transact business with contractors, vendors, landlords, banks, employees, and customers. In our personal lives, we deal with contracts when we buy a house, buy a vehicle, sign a lease, and sign up for social media accounts.

Contracts are promises that the law will enforce. A contract is a legally binding agreement between two (2) or more persons or legal entities (e.g. corporations or LLCs), where one party agrees to provide a good or service in exchange for money, services, or other goods.

Contracts are governed by state statutes, common law (judge-made), and private law. Private law consists of the agreed upon terms of the contract between the contracting parties.

It is beneficial to have a written agreement just in case disagreement arises between the parties. Merely reducing an agreement to writing does not automatically make the contract legally enforceable. Some agreements must be in writing and meet specific requirements. See our blog post on Florida’s Statute of Frauds and Elements of a Valid Contract. There are certain clauses that should be included in contracts to protect the parties in the event of a disagreement. For example, jurisdiction, venue, mediation, jury trial, arbitration, and payment of attorney’s fees and costs provisions. A Florida business attorney will help you determine what needs to be in the contract and will ensure that the contract complies with Florida law.

If you have any questions, feel free to contact Abigail D. Edelstein at (407) 862-9449 or make an appointment for a free thirty minute case assessment.

Do You Need a Business Lawyer for an LLC?

Congratulations on starting a new company! Before you start transacting business you should take the time to agree upon the terms and allocation for the ownership of the company. This is one of the biggest and toughest decisions, but it is one of the most crucial ones to get right from the start. Even minor differences in ownership could mean a lot in the future. Starting off with everyone on the same page will prevent big issues from arising in the future. With a business lawyer on your team you can be confident that your legal ducks in a row and focus on growing your business.

Currently, it costs $125.00 to form an LLC in Florida. The decision to seek the advice of a Florida business lawyer is significant. An attorney will ensure that there is a sound basis for your business to move forward. For example, there will be a structure for resolving disputes and the rights and obligations of each member will be defined. You should speak with a Florida business lawyer to ensure that your new business is setup for success.

The majority of clients come to me after a dispute has already occurred. Most of these disputes could have been avoided or resolved if they met with when they started their business. The first thing I do is examine their operating agreement, if they have one. Sometimes the operating agreements are purchased from LegalZoom or other do-it-yourself (“DIY”) sites. I cannot stress enough that forming an LLC or other entity should not be done using DIY or other out of the box formation. The old saying “you get what you pay for” could not be true in this regard. The price you pay reflects the predictability and transparency of resolving future conflicts. The cost of litigating business disputes can cost several thousands of dollars and could result in termination from the business. It is a wise investment to be safe than sorry and hire an experienced business lawyer. The following are some items you should consider obtaining for your LLC:

  1. Operating Agreement
  2. Subchapter S Election
  3. Doing Business As (“DBA”) or Fictitious Name
  4. Independent Contractor Agreement
  5. Management Agreement
  6. Employment Agreements
  7. Security Agreements (if you loan money to your business)
  8. Indemnification Agreements
  9. Leases for Home Office, Equipment, and Vehicles

As you can see, LLCs are more complex than meets the eye. Having an experienced business lawyer draft or review your agreements will often shed light on things that are often clouded by the excitement of starting a business. Our firm can help your business start off on the right foot.

Call (407) 862-9449 to schedule a free thirty minute case assessment to discuss your business needs.

 

What is a Limited Liability Company (“LLC”)?

A Limited Liability Company, also known as an LLC, is a hybrid organization with characteristics of a corporation and a partnership. LLCs can choose to be taxed as a partnership or a corporation. LLCs are run by a Manager(s) and can be owned by a Member or several Members. Management of a LLC is governed by Florida statute unless members agree otherwise. A carefully drafted operating agreement is one way to control and protect the LLC’s assets among other things.

The following is a summary of why some people choose LLCs:
1. Limit Owner’s Liability. The primary reason for forming a limited liability company is to limit the liability of the owners. If you are sued, your creditors should not be able to get your personal assets.
2. Charging Order Protection. Interests in LLCs are protected from the claims of creditors of their members. For example, if a creditor of a member gets a charging order against the interest of the member, the creditor cannot acquire the debtor’s interest in the LLC. Therefore, the creditor cannot acquire the assets of the LLC. As a result, the creditor must wait until the manager makes a distribution to the member/debtor to get paid. Corporations do not enjoy this protection.
3. Taxes. Most LLCs are not subject to Florida’s corporate income tax. Like partnerships, profits and losses will flow through to the owners. This avoids double taxation.
4. Flexibility. LLCs have the flexibility to draft their operating agreement to cover issues such as members’ contribution obligations, member and management voting powers, profit and loss allocations, governance structure, members’ distribution rights, etc. Amendments and organizational changes related to the LLC can generally be made in the operating agreement alone (without amending the articles of organization).
5. Anonymity. LLCs provide a degree of anonymity. LLCS help keep your name out of databases and asset searches.
6. Formalities Not Required. A corporation requires specific formalities be followed including annual meetings of shareholders and directors each year, meeting minutes which are kept with the corporation’s records, etc. These formalities are not required for LLCs. However, it is a good idea for your LLC to document major decisions even though these formalities are not required.
7. Allocations of Profits and Losses. Unlike S corporations, LLCs can make special allocations of profits and losses among its members. S corporations have one class of ownership with profits and losses allocated according to the percentage of ownership.

As you can see, LLCs are more complex than meets the eye. Having an experienced business lawyer draft or review your agreement will often shed light on things that are often clouded by the excitement of starting a business. Our firm can help your business start off on the right foot.

Call (407) 862-9449 to schedule a free case assessment and discuss your business needs.

How Contracts Can Save Your Business Time and Money

If you own a business, it is important to establish an agreement or contract with those you do business with. It will take a little more effort than a handshake and may cost for an attorney to draft or review the written contract. However, you will have the peace of mind knowing that should the worst happen your business will be protected.

An experienced business attorney will make sure the necessary clauses are included to protect your business. For example, a prevailing party clause explains what costs and fees the losing party is responsible to pay to the winning party. If you did not have a contract, and if there is no law giving you a right to collect fees and costs, then each party will have to bear their own expenses. Costs and fees include attorney’s fees which can add up quickly should the matter be filed in court. It is already bad that the deal fell through. It could be worse if you have to pay an attorney out of pocket with no possibility of recouping those costs.

Most business owners forgo seeking the help of an attorney to draft or review their contracts because they think it is too expensive. What they do not realize is that if the other party does not fulfill their obligations then they will probably have to hire an attorney anyway. Most business owners meet with me after the deal falls through. At this point, I am trying to figure out what the terms of the agreement were and how we can prove such agreement. There is no reason for it to get to this point.

I would advise having an attorney review or draft your contracts before you seal the deal. Paying an attorney to do this could save you a lot of time and money down the road. My firm offers flexible payment options to fit the needs of any business. You can hire us for a specific task or you can make us part of your team. We have monthly plans that include consults (in person or over the telephone), document review, and other services.

To discuss your business needs call (407) 862-9449.

Caveat Emptor: Do-It-Yourself Estate Planning- Part I

Caveat emptor, the Latin phrase for let the buyer beware, is an old saying has stood the test of time. A story in The Florida Bar News confirms the inadequacy and unreliability of do-it-yourself estate planning. To view the full article please click here.

In the article, a woman, Ann Aldrich, used an “E-Z Legal Form” to write her will.

Facts

  • Aldrich’s form will was properly witnessed and executed.
  • Aldrich’s form will specified that her property was to be left to her sister, and if her sister died first, then her property would go to her brother.
  • The sister died first and left property and money to Ms. Aldrich.
  • Aldrich attached a note to the form will stating that her brother should receive the inherited property, with some funds for a niece. Ms. Aldrich and her daughter signed the note.

The Problem with the Self-Drafted Will

  • Aldrich’s form will did not have any general devises or residuary clauses to control how her inheritance should be handled.
  • The Court found that the attached note was a legally ineffective testamentary instrument because it did not comply with the Florida Probate Code.

One Consequence of the Self-Drafted Will- Costly Litigation

When Ms. Aldrich passed away, her brother filed an action and claimed that he should get the entire estate, including the inheritance from the sister. He was met with opposition from two nieces. The nieces argued that Florida intestacy laws should apply to the inheritance because the form will did not mention or cover inheritances. Note: Intestate means a person died without a will. Florida intestacy laws determine who will inherit the decedent’s assets.

The Court’s Finding

The Florida Supreme Court found that Ms. Aldrich’s after-acquired property shall pass by intestacy. Applying Florida intestacy law to this case, Ms. Aldrich’s inheritance passes to her two nieces even though her note clearly stated that she wanted all of her “worldly possession” to pass to her brother.

Justice Barbara Pariente wrote a separate opinion to underscore what she saw as problems from using the simple will form. See the Court’s opinion at the following link: sc11-2147. 

The Moral of the Story- Caveat Emptor

You are own when you decide to write your own will using online software or pre-printed templates. Ms. Aldrich’s choice to use a commercial will, instead of hiring an attorney, prevented her wishes from being carried out. Her story highlights the dangers of using pre-printed forms and drafting a will without legal assistance.

Additionally, her choice sparked litigation that cost many times what she saved by using the generic form. The advice of an attorney may cost more but we advise you on the best way to protect your family and distribute your assets according to your wishes. We do more than just draft the document. As illustrated by this story, the ultimate cost of drafting your own will has the potential to surpass the cost of hiring a lawyer from the beginning. It is not worth it to learn the hard way and cause unnecessary headaches and legal expenses for your family.

Contact my office if you a Florida resident looking for estate planning or small business legal services.

[contact-form-7 404 "Not Found"]

After you say “I do,” make a vow to say “I will” about planning your estate

Just married? Planning to be married? Congratulations! Estate planning is probably the last thing you want to do as a newlywed, but it is one of the smartest long-term decisions you can make. Planning your estate early on in the marriage will protect and care for your spouse. It can help avoid a host of potential issues and expenses down the road. Once you are married you should consider making a will, health care directives, and a power of attorney to appoint your new spouse. Once the babies start to arrive, your estate plan may need to be updated with trusts and guardians.

Newlywed vintage photo

Taking the time to sit down with your spouse and speak openly about your estate plans will ensure that, should the worst happen, your new family is prepared to handle the unexpected.

By beginning your life together with a sound estate plan, you not only help avoid potential issues and expenses in the future, but also gain the satisfaction of knowing you have provided a secure future for your new family.

If you already planned a wedding, planning for the future should be a breeze.

Call (407) 862-9449 or complete the Contact Form below to schedule a FREE ESTATE PLANNING ASSESSMENT! Mention this blog post to receive a special flat-rate for our Newlywed Estate Planning Package!

Abigail Edelstein, Esquire

Attorney & Counselor at Law

www.EdelsteinLawOffice.com

(407) 862-9449

[contact-form-7 404 "Not Found"]

3 Reasons Why Making a Will Should be Your New Year’s Resolution

No matter how old or young, rich or poor, making a will should be one of your top new year’s resolutions. Below are three reasons why.

1. You decide who gets your assets.

A will ensures that your personal belongings and assets go to family or beneficiaries you choose. If you die without a will, your intended wishes may not be carried out because state law will decide who receives your assets.

2. You decide who will take care of your minor children.

Making a will is essential for individuals with young children. A will empowers you to choose a guardian to look after your minor children in the event that the unthinkable occurs. If a guardian is not appointed, the court will choose among family members or a state appointed guardian. There is no guarantee that the court will appoint a guardian that shares your morals and values. It is important to plan ahead and designate a guardian for your minor children in your will.

3. Because tomorrow is not promised.

If you die without a will you will be subjecting your family and loved ones to unnecessary confusion and anxiety at an already difficult time. A carefully written will ensures that, should the worst happen, your family will be protected and cared for.

If who gets your assets and who serves as the guardian of your minor children is important to you, then making a will should be one of your top new year’s resolutions.

By having an estate plan, you not only help avoid potential issues and expenses in the future, but will also gain the satisfaction of knowing you have provided a secure future for your loved ones.

Contact us online or at (407) 862-9449 to schedule a free estate planning assessment.We offer reasonable flat rate estate planning packages to fit your needs!

A little about me: I am an estate planning attorney. I am an Orlando native and an esteemed graduate of local educational institutions including Lake Brantley High School, Seminole State College, the University of Central Florida, and Florida A&M University College of Law. I am a member of The Florida Bar, the Central Florida Association for Women Lawyers, and the Orange County Bar Association. I am also an active volunteer in the Orlando community and serve on the board of directors for BASE Camp Children’s Cancer Foundation, an organization that provides support to children and families batting cancer and other hematological illnesses.