What Would You Ask An Atourney If You Could?

Business By LeanneW Updated 24 Jul 2008 , 1:37am by loriemoms

LeanneW Posted 11 Jul 2008 , 9:08pm
post #1 of 25

Hi CCers,

a friend of a friend is an atourney and has offered to spend some time with me to answer any questions I have. he has said of he can't answer it he will find the answer for me. so helpful!

I am wondering if you could ask an atourney anything about your business or contracts, etc. what would you ask?

so far I have come up with this:

1. I do not have insurance to protect againgst law suits (I know I need it). I do have in my contract that I am not responsible or liable for any harm or illness caused by my cake. Am I protected by putting that in the contract or not?

2. Can I legally charge late payment fees if customers pay after the due date?

3. I would like to keep the contract 1 page but I have many terms and conditions. Can I put all the terms & cond. on my website and then have it in the contract that they agree to all the term and conditions posted at www.website.com/termsandconditions?

Can any of you think of more legal type questions?

Thanks, I will post the answers next week.

24 replies
indydebi Posted 12 Jul 2008 , 1:43am
post #2 of 25

How about a clarification on when our liability is over? Here's the story that prompts the question:

A lady came into the shop recently just because she'd driven by the window and just wanted to see what we were all about. She works at a local banquet facility and was telling the story of a wedding where the cake "....just collapsed on itself." She said they were minutes from the cake-cutting, the staff was leaning against one wall, waiting for the cake to be cut, when they just watched this cake topple. She told me it's a hard-n-fast rule that once a cake is set up, the banquet staff doesn't go NEAR the cake, so there's no table bumping or anything.

Manager puts everything on hold until she called the cake lady to "...come and see this mess". Cake lady arrives and does the "once I set it up, I'm no longer liable" and blamed the serving staff. The lady in my shop said, "We didn't do anything to this cake. Maybe the cake was sitting there too long." I told her, "A cake that is properly assembled will sit there for days, unless the table is bumped or the speakers are too close." Lady assures me NO ONE went near that table ... like I said, it's a hard-n-fast rule with them.

What kind of leg are we standing on in this situation where it boils down to a he-said-she-said thing? I know we all discuss it at length on here, but what's the legal viewpoint?

melodyscakes Posted 12 Jul 2008 , 11:18pm
post #3 of 25

Is there a simple rule to determine if you need to be a sole, LLC, or whatever?

courtney1009 Posted 14 Jul 2008 , 12:54am
post #4 of 25

This is a really great topic. I wish more people were talking about it. I am just starting out and I have wondered the same things. I'm very nervous, because unfortunately in today's society it seems like everyone is so sue happy.

LeanneW Posted 18 Jul 2008 , 9:33pm
post #5 of 25

Hi all,

I didn't recieve notification of your replies so I will ask those q's on Tuesday when I see him next.

here is what we did discuss...

a contract is to keep you from getting involved in legal action and insurance is there to protect you if you find yourself on the losing end of legal action. so yes I know I still need to get insurance.

regarding late payment fees. he said as long as you could explain to a judge or mediator why your late fees are resonable then you can charge whatever you would like. be sure you call it a "late payment penalty" and not "interest", otherwise there are more laws regarding interest fees.

my late payment fee is $20.00/day, this is reasonable for me becasue I estimate it would take 1 hour of my time to check the mailbox for the payment, call and/or email the customer to follow up, calculate new payment amount, create new invoice, etc. and 1 hour of my time is worth $20.00.

he also said if I increase my price per serving, that would translate to me being paid more per hour so I could also increase my late payment fee.

about keeping my contract to one page and having a seperate document with all my terms...

he likes the idea of a one page contract with the most important detail like cust. info, cake description, payment amounts and dates, cancellation policy, delivery details, and anything else that is most important to the order.

then have a space where they can sign saying that they were offered the "Terms and Conditions" document and it is thier responsibility to read it. where they sign then it says they agree to all the term and conditions. at he consultation offer them a printed copy and then make a note in the file if they took it or refused it. then when you send the contract tell them where they can download a copy of the terms from the website.

sorry this is so long...

one last thing for now, more to come later...

when writing the terms and conditions you must keep in mind what the average person would consider reasonable. so whether you are writing the cancellation/refund policy or the "after I set it up I have no responsibility" policy, the bottom line is what would the judge/mediator say if it went to court?

Debi I will certainly be very inetested in the answer to your question. One thing we did discuss was what to do if a cust. calls and is disatisfied. we came up with this policy...

the customer has 4 hours after delivery to call if they are disatisfied with the cake. they must give me an opportunity to fix any problems. y contract says that I am not responsible for the cake after it has been set up, but would that hold up in court? i don't know... I will get to the bottom of this.

eiyapet Posted 18 Jul 2008 , 9:40pm
post #6 of 25

Could you maybe ask about some copyright information. There is a thread about what we are allowed to use and not allowed to use on our cakes and everyone seems to have different opinions. It would be nice to hear what a lawyer has to say about it.

LeanneW Posted 18 Jul 2008 , 10:27pm
post #7 of 25
Quote:
Originally Posted by eiyapet

Could you maybe ask about some copyright information. There is a thread about what we are allowed to use and not allowed to use on our cakes and everyone seems to have different opinions. It would be nice to hear what a lawyer has to say about it.




do you have a more specific q about copyright?

I think it is pretty straight forward. if something is copywritten and you do not own or have the rights to reproduce the copywritten image then you can't do it.

are you asking more specifically about what can happen to you if you violate the copyright?

eiyapet Posted 19 Jul 2008 , 3:05pm
post #8 of 25

http://www.cakecentral.com/cake-decorating-ftopict-594266.html
This is the thread I am refering to, a lot of people have different questions on multiple areas. Personally I try to stear clear of the issue, so I usually buy decopac products to cover my rear in that department. One of the big questions seems to be character pans. Can you sell someting you have made in a character pan - I have never done one, they drive me nuts. Also, I had an accountant tell me that you can use some sports logos as long as you put "not an officially lisenced (NFL/MLB/NBA) product" in a conspicuous place since you have to have actually sold x amount of product before you even have the ability to obtain a lisence. I know I have several NFL objects that have that on the product or the packaging.
If he can think of a loop hole foor all of us that would be super cool though! icon_biggrin.gif I know I hate to not be able to do what a customer requsts just because I cannot find a lisenced product.
Thanks!

LeanneW Posted 19 Jul 2008 , 4:40pm
post #9 of 25

eiyapet,

I copied this from Wilton's website "Licensed products are for domestic use only" so I think that is pretty straight forward.

I have browsed that thread before and I think each baker has to make the decision for themsleves if they will reproduce licensed characters on their cakes.

I think in that thread someone mentions that they create a cake in the colors of the theme, for example: pink for barbie. Then they buy the licensed package and they give it to the customer as a gift and the customer would place the figures on the cake.

As far as saying "it is not an oficially lisenced product" I will ask but I think you are treading on shifty ground.

With some clever customer service you can give them what they want without breaking the law. I think any football fan would be pleased with a cake in the colors of thier team and a banner that says "#1 Seahawks Fan"

eiyapet Posted 19 Jul 2008 , 5:37pm
post #10 of 25

"As far as saying "it is not an oficially lisenced product" I will ask but I think you are treading on shifty ground. "


I should have been more clear, I do not do this, but I own items I bought (posters, statues) that say this. That is why it caught my attention. The way I worded it I guess I made it sound like I do that myself and cakes.

I wonder though, I had a customer bring me a picture her son drew of Batman and wanted that on a cake - what gray area does that one fall in? Do I just put a disclaimer on the contract saying that they assume the liability for any images that they bring to me? I ususally try to stear everyone to the decopac stuff because I know that is OK - it is the same line that the grocery stores use. Not very creative, but if that is what the customer wants...

LeanneW Posted 22 Jul 2008 , 5:13am
post #11 of 25
Quote:
Originally Posted by indydebi

How about a clarification on when our liability is over? Here's the story that prompts the question:

A lady came into the shop recently just because she'd driven by the window and just wanted to see what we were all about. She works at a local banquet facility and was telling the story of a wedding where the cake "....just collapsed on itself." She said they were minutes from the cake-cutting, the staff was leaning against one wall, waiting for the cake to be cut, when they just watched this cake topple. She told me it's a hard-n-fast rule that once a cake is set up, the banquet staff doesn't go NEAR the cake, so there's no table bumping or anything.

Manager puts everything on hold until she called the cake lady to "...come and see this mess". Cake lady arrives and does the "once I set it up, I'm no longer liable" and blamed the serving staff. The lady in my shop said, "We didn't do anything to this cake. Maybe the cake was sitting there too long." I told her, "A cake that is properly assembled will sit there for days, unless the table is bumped or the speakers are too close." Lady assures me NO ONE went near that table ... like I said, it's a hard-n-fast rule with them.

What kind of leg are we standing on in this situation where it boils down to a he-said-she-said thing? I know we all discuss it at length on here, but what's the legal viewpoint?




Ok here is the answer...

If the cake fell over after someone signed for it you would not be responsible as long as there was no negligence or fraud on your part in the set-up. Negligence and fraud would negate the signing away of the responsibility. The person signing for the cake should be aware of what they are signing. So, in the nicest possible way you should tell them they are taking responsibility for the cake, especially if the signor is not also the payor. Makes sense?

loriemoms Posted 22 Jul 2008 , 12:13pm
post #12 of 25
Quote:
Originally Posted by leannewinslow

Quote:
Originally Posted by indydebi

How about a clarification on when our liability is over? Here's the story that prompts the question:

A lady came into the shop recently just because she'd driven by the window and just wanted to see what we were all about. She works at a local banquet facility and was telling the story of a wedding where the cake "....just collapsed on itself." She said they were minutes from the cake-cutting, the staff was leaning against one wall, waiting for the cake to be cut, when they just watched this cake topple. She told me it's a hard-n-fast rule that once a cake is set up, the banquet staff doesn't go NEAR the cake, so there's no table bumping or anything.

Manager puts everything on hold until she called the cake lady to "...come and see this mess". Cake lady arrives and does the "once I set it up, I'm no longer liable" and blamed the serving staff. The lady in my shop said, "We didn't do anything to this cake. Maybe the cake was sitting there too long." I told her, "A cake that is properly assembled will sit there for days, unless the table is bumped or the speakers are too close." Lady assures me NO ONE went near that table ... like I said, it's a hard-n-fast rule with them.

What kind of leg are we standing on in this situation where it boils down to a he-said-she-said thing? I know we all discuss it at length on here, but what's the legal viewpoint?



Ok here is the answer...

If the cake fell over after someone signed for it you would not be responsible as long as there was no negligence or fraud on your part in the set-up. Negligence and fraud would negate the signing away of the responsibility. The person signing for the cake should be aware of what they are signing. So, in the nicest possible way you should tell them they are taking responsibility for the cake, especially if the signor is not also the payor. Makes sense?




So for instance, if the baker didnt put any kind of support system in the cake..is this now the bakers fault? Or is it still the facilities fault? (beleive it or not, I have heard stories of bakeries not putting a single dowel in a wedding cake....One case, the cake was frozen solid upon delivery and as it defrosted, the cake sank into itself. Is the facility liable or the baker?)

LeanneW Posted 22 Jul 2008 , 4:27pm
post #13 of 25

loriemoms,

I think in that case that would be neglegent on the part of the cake maker. It is standard practice to use supports in cakes so not using them would be considered the baker's fault. But in the end it would come down to whether or not the judge thought it was reasonable to not use supports.

As a cake maker that uses supports I would defend my self by showing an example of the dowels and describing how they are used etc. to prove I was cautious when I assembled the cake.

loriemoms Posted 23 Jul 2008 , 12:49am
post #14 of 25

So hopefully the cake decorator knows that they are doing!

I also would love to more on what LLC really does do for you...my accountaint has always discouraged me from it because he says it doesnt really protect you, since I dont have any employees and its a nightmare in higher costs...
I would love to hear what an attorney has to say about it!

sweetiemama Posted 23 Jul 2008 , 2:32am
post #15 of 25

Personally, as a former paralegal, I would incorporate. It may be more money, but you are protecting your family and yourself in the long run. Down the road, you may very well recoup L.L.C. costs by not having someone go after your personal assets should they have an accident on your business premises or even become sick with food poisoning. I have heard the advice given not to incorporate to make things "more simple". But things could get extremely complicated should an issue of liability arise.

LeanneW Posted 23 Jul 2008 , 6:14am
post #16 of 25

Ok, tonight we discussed the business organization stuff...

sweetiemama is right.

It is only a slightly higer fee for the business lisc. and in the end you actually end up paying the same taxes, at least in my state.

As a SP you are personally liable, which means you could lose your home if you loss a law suit. As an LLC the business is only liable for the amount of the assets.

Obviously insurance is necessary for both scenarios.

You don't need to become a corporation (C or S type) unless you will have many owners, for example: shareholders.

loriemoms Posted 23 Jul 2008 , 10:46am
post #17 of 25
Quote:
Originally Posted by sweetiemama

Personally, as a former paralegal, I would incorporate. It may be more money, but you are protecting your family and yourself in the long run. Down the road, you may very well recoup L.L.C. costs by not having someone go after your personal assets should they have an accident on your business premises or even become sick with food poisoning. I have heard the advice given not to incorporate to make things "more simple". But things could get extremely complicated should an issue of liability arise.




That is what I was curous about...because I have heard that LLC does NOT protect you against libility if you have no employees. That they can sue the company, but they also can sue the individual involved in the creation of the cake if they get sick (which is you).

sweetiemama Posted 23 Jul 2008 , 11:15am
post #18 of 25

I don't know the ins and outs of the law like an attorney, so I can't answer whether someone could sue you personally for making the cake. I have always been warned to incorporate (from college professors) because it protects your personal assets. I would ask how they can go after you personally (what is your personal liability) if you make the cake and are an L.L.C.. In another scenario, can I sue a chef who made the food that gave me food poisoning? I am not sure about that advice that you could be sued because you made the cake. The L.L.C. is created to protect the person in business from losing everything in the event their business is involved in litigation. Obviously, check with an attorney icon_smile.gif

Jocmom Posted 23 Jul 2008 , 11:27am
post #19 of 25

Wonderful post!

I guess I'm lucky - the bank that I work for has two on-site corporate attorneys and they work on the same floor that I do. They come to me for financial advice from time to time (I used to be licensed to sell mutual funds and annuities at another bank), or if they want to know where to buy a car (I work with all of the local dealerships). I ask them for legal advice from time to time. If they don't know the answer they call one of their associates. One of the nice perks of keeping my day job - and supplying my coworkers with a steady stream of baked goods never hurts. icon_wink.gif

loriemoms Posted 23 Jul 2008 , 12:11pm
post #20 of 25
Quote:
Originally Posted by sweetiemama

I don't know the ins and outs of the law like an attorney, so I can't answer whether someone could sue you personally for making the cake. I have always been warned to incorporate (from college professors) because it protects your personal assets. I would ask how they can go after you personally (what is your personal liability) if you make the cake and are an L.L.C.. In another scenario, can I sue a chef who made the food that gave me food poisoning? I am not sure about that advice that you could be sued because you made the cake. The L.L.C. is created to protect the person in business from losing everything in the event their business is involved in litigation. Obviously, check with an attorney icon_smile.gif




I had an older sister who was hit by a delivery truck while walking down the street and unfortantly, did die. My mom sued not only the company that owned the truck, but also sued the driver, since it was the driver that was responsible for the accident. She lost the cases simply because the weather was very bad that day and my sister was wearing dark clothing..so it was demmed an accident because the driver did not see her walking down the street. (there was no sidewalk) Her attorney told her to sue the driver as well because this happens all the time, where you go after both the company and the party who caused the issue. I recently read of a caterer that was sued because one of their servers had a baterial infection that got the entire wedding sick and even some of the hotel staff! (it was not just a cold, but some sort of odd intestional thing) Both the caterer and the person who was sick was sued and they won the case.

If you are a home baker, your home is your bakery...simply being LLC from what I understand will not protect someone from taking your home/bakery if they sue you for millions of dollars of damage. But I have heard confllicting information and would love to know the true! I think home bakeries are just a puzzlement for many attornies..

Getting sick from cake is also just very hard to proove...unless its the only thing they served that day. And unless you are letting your stuff sit out for days and not being careful, I understand it is HARD to get sick off of cake! That is why many states do allow home bakeries without futhur inspections after the first inspection. (for instance, in our state home bakeries dont even fall under the health department like restaurants and such!) I personally think as soon as a home bakery gets sued somewhere and they win, we will see a lot of states changing this law...

LeanneW Posted 23 Jul 2008 , 5:28pm
post #21 of 25
Quote:
Originally Posted by loriemoms


That is what I was curous about...because I have heard that LLC does NOT protect you against libility if you have no employees. That they can sue the company, but they also can sue the individual involved in the creation of the cake if they get sick (which is you).




Sorry I didn't say this, I just remembered it after I read this post...

They could only sue the owner for more than the business's assets if they could prove that you had intended to cause them harm. Like you purposely used rotten eggs or something like that.

Now if you didn't intend them harm then it would be very dificult to prove that you did.

Not sure if you all heard about this eithr early this year or late last year...

Bride sueing Cake Maker because cake was not "exactly what she ordered" said it caused her distress b/c she was so embarrassed that her guests had to see that cake ad then for years after the wedding she was too upset to look at the wedding pictures etc. Way over the top.

After they couldn't settle it did go to court where the judge ruled that the cake was eaten so no refund was needed and that the cake maker had not intended to cause distress to the bride. So in the end Cake Maker won. The only $$ the bride could had gotten was if she had returned the uneaten cake she would have been entitled to a full refund.

so bottom line LLC DOES PROTECT YOUR PERSONAL ASSETS, unless you inteltially inflicted harm on the people eating cake. Pretty unlikely. Just to make it more clear, do not ever sell a cake to a person you have hard feelings with.

Jocmom Posted 23 Jul 2008 , 6:28pm
post #22 of 25
Quote:
Originally Posted by loriemoms

I had an older sister who was hit by a delivery truck while walking down the street and unfortantly, did die. My mom sued not only the company that owned the truck, but also sued the driver, since it was the driver that was responsible for the accident. She lost the cases simply because the weather was very bad that day and my sister was wearing dark clothing..so it was demmed an accident because the driver did not see her walking down the street. (there was no sidewalk) Her attorney told her to sue the driver as well because this happens all the time, where you go after both the company and the party who caused the issue.




Sorry about your family's loss, loriemoms. It's a shame that the judge didn't use a little common sense and award your family something. (shouldn't the driver have been more careful in bad weather?)

So many people sue over trivial things because they are trying to get something for nothing. This was clearly not the situation in your sister's case.

loriemoms Posted 23 Jul 2008 , 8:39pm
post #23 of 25
Quote:
Originally Posted by leannewinslow



so bottom line LLC DOES PROTECT YOUR PERSONAL ASSETS, unless you inteltially inflicted harm on the people eating cake. Pretty unlikely. Just to make it more clear, do not ever sell a cake to a person you have hard feelings with.




my question is is that the judge would have ruled for the baker LLC or not....I would think having insurance would be enough..

indydebi Posted 23 Jul 2008 , 11:12pm
post #24 of 25
Quote:
Originally Posted by loriemoms

they can sue the company, but they also can sue the individual involved in the creation of the cake if they get sick (which is you).




I asked my attorney SPECIFICALLY about this when we got the LLC stuff rolling. He said it's common practice to list everyone and their brother on the "I'm going to sue you" list. It's like casting a big net and see what you pull in. But as my attorney, he would get the lawsuit against me personally thrown out in a heartbeat so the only thing left was the lawsuit against the LLC.

loriemoms Posted 24 Jul 2008 , 1:37am
post #25 of 25
Quote:
Originally Posted by indydebi

Quote:
Originally Posted by loriemoms

they can sue the company, but they also can sue the individual involved in the creation of the cake if they get sick (which is you).



I asked my attorney SPECIFICALLY about this when we got the LLC stuff rolling. He said it's common practice to list everyone and their brother on the "I'm going to sue you" list. It's like casting a big net and see what you pull in. But as my attorney, he would get the lawsuit against me personally thrown out in a heartbeat so the only thing left was the lawsuit against the LLC.




You have a good attorney then! I just don't want people thinking OK, I will get an LLC and will be protected against lawsuits....

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