As is its custom every ten years, the American Institute of Architects (AIA) has released updated versions of many of its industry standard construction documents commonly used by owners, architects and contractors. The A101 (Standard Form of Agreement between Owner and Contractor) and A201 (General Conditions of the Contract of Construction) – which constitute the most commonly used owner/contractor construction forms – contain a number of notable changes. Some of the more important substantive changes that owners and contractors will need to consider are as follows:
- Owner Termination for Convenience – The 2007 A101 and 2007 A201 provided that if an owner terminates the contractor for convenience (as opposed to a termination on account of the contractor’s default), than the contractor may recoup projected overhead and profit for anticipated work that had not yet been performed as of the termination date. The 2017 versions contemplates a stipulated termination fee which will need to be negotiated by the parties.
- Owner Financial Information – The 2017 A201 version has provided the contractor the express right to refuse to proceed with the work or stop work in progress if the owner fails to provide reasonable evidence that the owner has made sufficient financial arrangements to fulfill its payment obligations under the contract.
- Warranties – The 2017 A201 version now provides that all warranties issued in connection with the work, such as warranties from material or equipment providers, must be issued in the name of the owner or provide that they are transferable to the owner.
- Owner/Contractor Communications – The 2007 A201 stated that owners and contractors shall “endeavor” to communicate through Architect. The 2017 version now contemplates that owners and contractors will communicate directly and will keep the architect informed of the nature and substance of those communications.
- Minor Changes in the Work – The 2007 A201 provided that the architect may order minor changes in the work that do not adjust the contract sum or contract time. The 2017 revisions now incorporate a mechanism for the contractor to register its objections to the architect’s proposed changes and the right not to proceed with the changed work until the objection is resolved.
- Lien Waivers – Subcontractor and supplier lien waivers now must be included in each draw request.
- Contractor Lien Indemnification – The 2017 A201 now provides that so long as the owner has funded its payment obligations, the contractor must indemnify the owner for lien claims and other claims for non-payment by such contractor’s subcontractors or suppliers.
Many of these changes are intended to approximate the types of modifications that owners and contractors negotiate when entering into construction contracts using the AIA forms. Nevertheless, it is important for the parties to take note of these provisions when using the forms without specific consideration of these issues.
For further information regarding construction contracts and the construction process, please contact:
312-368-0100 or email@example.com.
If you are a typical person today, you’ve likely used at least three different apps before 9 am. You get up in the morning and click on your weather app of choice to figure out what to wear and whether to take your umbrella. Then you grab an UBER® to get to the office and during the ride, you order your coffee so it is ready for you as you breeze through the building on the way to the elevator. No sense in waiting for the coffee, as this is a needless waste of time. With more and more people relying on apps, app design, branding, marketing, and protection are more important than ever.
The number of mobile apps is exploding. In June 2016, Apple® reported approximately 2,000,000 total apps in its app store. By May 2017, that number had increased by approximately 200,000. Mobile apps may be discussed in three categories – mobile web apps that enhance web browsing, apps that offer users a new service not previously available via a smart phone, and traditional brands whose business is widely known (such as WALGREENS®). With all of the competition in the marketplace, companies must consider how to protect their app brand as a trademark, before it launches the new app into the marketplace.
To be “protectable” as a U.S. trademark, an app must have a few key characteristics. First, consider the name of the app. Does it describe a feature or function of the app? If so, the owner may want to reconsider, as the U.S. Patent & Trademark Office typically does not allow registration of descriptive marks. Instead, the owner of the app will need to come up with a name that is either merely suggestive of the service the app provides or is arbitrary. Arbitrary names of apps are those that do not describe or suggest anything about the app. APPLE® itself is a good example of an arbitrary trademark, as APPLE® is a trademark for computers, pads, phones and other goods and services, all having nothing to do with fruit. Suggestive trademarks may be the happy medium where the function of the app is not outwardly described, but the app name hints at the meaning. For example, ENLIGHT® is a photo editor app and would be considered suggestive because it suggests something about photo editing but does not describe it.
In considering the name of the app, owners will also want to pay attention to the color and icon they will use with the app. Will these elements convey a unique design that may lend itself to trademark protection? While color is sometimes not claimed as part of a design trademark in the trademark application or emphasized in a typical enforcement setting, in the app setting it is important to claim color, as it is one mechanism to set the app apart from others.
Registration of an app name and design provides many benefits. The most important benefit is having the presumption that the owner has the right to use the name, design, and color of the app nationwide over all others, subject to certain exceptions. Another important benefit is that when the app name or design (or both) is a registered trademark, all others are put on notice of the owner’s rights. That is, all others are held to know about the registered app, even if they did not actually know about it. Finally, federally registered trademarks may obtain relief from an infringer without a lawsuit. If the owner simply wants the infringer to stop using the confusingly similar name, design and/or color scheme, the owner need only submit proof to the marketplace on which the app is available, and the marketplace, such as the Apple® App Store, will assist in removing the infringing app.
For further inquiries pertaining to apps and trademark protection and related questions regarding your intellectual property, please contact:
312.368.0100 or firstname.lastname@example.org.
*UBER®, WALGREENS®, APPLE®, and ENLIGHT® are all registered trademarks of their respective owners.
(Please note that we are not endorsing any products or services mentioned in this blog).
Answer: In a consumer transaction, no.¹ In a commercial transaction, it depends.
A typical “confession of judgment” provision in a commercial contract (e.g., a promissory note) authorizes the creditor upon a default under the agreement to obtain a judgment for the amount owed without notice to the debtor(s) or guarantor(s), and allows the creditor to immediately execute on the judgment. The clause will most likely contain a “warrant of attorney” authorizing the appointment of an attorney to appear for the debtor, to waive personal jurisdiction and service, and to consent to an amount due and owing by the creditor. Thus, a party in default under an agreement containing a confession of judgment provision often first learns about the lawsuit against him after collection efforts have begun, when his bank accounts have been frozen or a lien has been recorded against his property. Courts will permit this judicial “shortcut” only if (a) the contractual provision is enforceable in the first place, and (b) the creditor takes the right steps to obtain the judgment after a default.
On the first point, a judgment by confession is void where it requires extrinsic evidence to prove the underlying debt. The Illinois Supreme Court in Grundy County Nat. Bank v. Westfall, 49 Ill.2d 498, 500–01 (1971) has held: “Judgments by confession are circumspectly viewed. … ‘The power to confess a judgment must be clearly given and strictly pursued, and a departure from the authority conferred will render the confessed judgment void.’ The extent of the liability undertaken must be ascertainable from the face of the instrument in which the warrant is granted. … ‘A judgment by confession must be for a fixed and definite sum, and not in confession of a fact that can only be established by testimony outside of the written documents, required by the statute to be filed in order to enter up a judgment by confession.” See also Ninow v. Loughnane, 103 Ill.App.3d 833, 836 (1st Dist. 1981); State National Bank v. Epsteen, 59 Ill.App.3d 233 (1st Dist. 1978). Numerous other courts have likewise held that a guaranty or underlying instrument purporting to grant power to confession judgment that is all-encompassing—for example, one that refers to “any and all debts, liabilities and obligations of every nature or form of the debtor,” including future debts, is so broad as to be void. Thus, if your confession of judgment clause is broad-sweeping or does not clearly describe the extent of the debtor’s liability, or if proving the amount owed requires reference to other documents extraneous to the instrument itself, the confession of judgment clause – and any judgment later obtained thereon – is void. While it is certainly advisable for clients finding themselves on the defensive end of this situation to act quickly, Illinois law permits a void judgment to be attacked at any time.
As to the second point, because the confession of judgment remedy is a creature of an Illinois statute, it must be strictly construed. See 735 ILCS 5/2-1301(c). Voidness issues aside, that section requires the creditor to file a confession judgment suit only in the county in which (1) the note or obligation containing the confession of judgment clause was executed, (2) one or more of the defendants reside, or (3) in which any real or personal property owned by any of the defendants is located.
Because Illinois courts view judgments by confession with some skepticism, the law affords various remedies and means of challenging them not covered by this article. For further information on how to defend a judgment by confession case or to use such a provision offensively, contact:
(312) 368-0100 or email@example.com.
¹ A “consumer transaction” is defined as the “sale, lease, assignment, loan, or other disposition of an item of goods, a consumer service, or an intangible to an individual for purposes that are primarily personal, family, or household.” 735 ILCS 5/2-1301(c). If the instrument authorizing the judgment by confession in a consumer transactions was executed prior to September 24, 1979, however, it is still enforceable. Id.
An Employer Can Be Liable for Accessing an Employee’s Personal Email Even if the Employee Engaged in Misconduct
Over the last several years, communication via email and text has become commonplace in the workplace. Oftentimes, employees use one device for both personal and work-related communication regardless of whether that device is employee-owned or employer-provided. There is no doubt that employers may have legitimate business reasons for monitoring employee communications. For example, an employee may leave the company and the employer is concerned that she has taken confidential information or illegally solicited clients. Employers feel entitled to review data stored on employer-provided, particularly where employees are instructed that the company owns the devices and has the right to monitor the data. As a general rule, the law supports employers here. An employer’s zeal to snoop, however, may subject it to both civil and criminal penalties under both federal and state statutes.
The Electronic Communication Privacy Act (ECPA) and the Stored Communications Act (SCA) both govern an employer’s ability to review electronic communications. The ECPA prohibits the interception of electronic communications, and the term “interception” as used in the ECPA has been interpreted narrowly. The SCA makes it illegal to “access without authorization a facility through which electronic communication service is provided,” making it illegal to obtain access to certain communications in electronic storage. With regard to an employer’s review of employee emails sent through web-based email accounts like Gmail or Hotmail, the most frequent scenario is where the former employer is able to access the former employee’s web-based email account because the employee saved his username and password on a device provided by the employer. In these cases, courts have typically sided with the former employee and have been reluctant to punish the former employee for failing to take appropriate steps to secure their own personal information and allegedly private communications. The former employee’s own negligence in securing personal data is not a defense for the employer.
Bottom line – an employer should seek advice before accessing an employee’s personal email account without authorization even though it has the ability to do so.
For more information on this topic please contact:
Howard Teplinsky at:
312-368-0100 or firstname.lastname@example.org.
The Illinois Limited Liability Company Act (805 ILCS 180) (the “LLC Act”) recently underwent significant revisions which became effective on July 1, 2017. The changes to the LLC Act align with the revised Uniform Liability Company Act, and Illinois now joins fifteen other states in modeling the revised Uniform Liability Company Act. Although the LLC Act is often minimally revised, this is the first major overhaul of the LLC Act in over two decades. Some of the significant revisions are:
- Operating Agreements. The goal of the revisions is to make the LLC’s Operating Agreement (similar to a partnership agreement) the primary controlling document for the LLC. Under the prior version of the LLC Act, the management of the LLC was designated in the Articles of Organization. Now, the LLC is presumed to be member-managed unless the Operating Agreement indicates that the LLC is manager-managed. Further, the revised LLC Act now permits an LLC to have an oral Operating Agreement, exempting the Operating Agreement from complying with the Illinois Statute of Frauds (740 ILCS 80/2). (The Illinois Statute of Frauds requires all documents that exist in effect for more than one year to be in writing.) However, it is strongly recommended that all LLCs have a written Operating Agreement in the event a dispute arises between members as to the terms of such Agreement.
- Fiduciary Duty. Under the revised LLC Act, an LLC may now restrict or eliminate the fiduciary duties of a member or manager to the LLC so long as it is clear and ambiguous in the Operating Agreement. The Operating Agreement can identify the specific activities that will not violate the member or manager’s fiduciary duties to the LLC. Note, the duty of care cannot be waived or eliminated, but it may be altered by the Operating Agreement, so long as such alterations do not allow for intentional misconduct or a knowing violation of law. Further, such modifications of the fiduciary duties, including the duty of care, cannot alter or eliminate the obligations of good faith and fair dealing. It is highly recommended that an LLC’s Operating Agreement include specific language providing that any alterations or waivers will be allowed to the extent they are permissible under the LLC Act and other applicable law.
- Member’s Authority to Bind LLC. Previously, a member was able to bind an LLC to agreements “solely by being a member”. Now, a third party can no longer rely on an individual’s status as a member of the LLC to bind the LLC to any agreements executed by the member. A third party will want to conduct further due diligence to confirm such member’s authority to bind the LLC. The revised LLC Act requires that there be express authority granted by the LLC to the member in order for the member to bind the LLC to any contractual obligation. A Statement of Authority may be filed by the LLC with the Illinois Secretary of State indicating which managers and members have the authority to bind the LLC and to what extent. The Statement of Authority will be deemed to be “constructive notice” to third parties. For example, the Statement of Authority will indicate which managers and members may execute documents for transactions relating to the LLC’s real estate and other transactions on behalf of the LLC. If the Statement of Authority does pertain to real estate, the Statement may also be recorded in the county in which the real estate is located and can be relied on in good faith by potential purchasers. On the other hand, if a manager or member does not want the authority granted to it in a Statement of Authority, the manager or member has the option to file a Statement of Denial with the Secretary of State, retracting any such authority.
As a result of the significant changes to the LLC Act, it is imperative to have a current Operating Agreement in place for your LLC. The LLC Act applies to all Illinois limited liability companies; therefore, where an LLC Operating Agreement is silent on a particular issue, the LLC Act’s provision governs. We encourage you to consider the impact of the revisions on your LLC and its Operating Agreement, conduct a review of your LLC’s existing Operating Agreement, or consider preparing a new Operating Agreement.
For more information on this topic or to discuss any of the above recommendations, please contact:
Pamela Szelung at:
312-368-0100 or email@example.com.
Under the City of Chicago Residential Landlord Tenant Ordinance (“RLTO”), owners and landlords of residential property located in the City of Chicago must notify their tenants of a foreclosure action within seven (7) days of being served with the foreclosure complaint. If the foreclosure action is pending at the time the lease is executed, the owner or landlord must disclose in writing to the tenant that the foreclosure complaint is pending.
The notice must comply with the following requirements:
- Be in writing;
- Be sent to all tenants of the premises and to any other third party who has a consistent pattern and practice of paying rent on behalf of the tenant;
- Identify the court in which the foreclosure action is pending, the case name, and the case number; and
- Include the following language: “This is not a notice to vacate the premises. This notice does not mean ownership of the building has changed. All tenants are still responsible for payment of rent and other obligations under the rental agreement. The owner or landlord is still responsible for their obligations under the rental agreement. You shall receive additional notice if there is a change in owner.”
If an owner or landlord fails to provide the required notice, the tenant may terminate the rental agreement upon thirty days (30) written notice to the owner or landlord. Additionally, in a civil lawsuit, the tenant can recover $200 in statutory damages, plus any other actual damages incurred as a result of the owner or landlord’s failure to provide the requisite notice.
If you have any questions about your obligations under the RLTO, or would like assistance in issuing a foreclosure notice to your tenants, please contact:
(312) 368-0100 or firstname.lastname@example.org.
Does this sound familiar?
“John and Mary kept delaying any discussions about preparing estate planning. After they had their first child, Jack, they finally decided it was time to discuss their estate plan with a lawyer. They set up a trust for Jack if anything happened to John and Mary and designated John’s parents, who were then 65, as Jack’s guardian and the trustee of the trust. Since they had meager assets, they left everything outright to him at age 25. John and Mary ignored these documents and made none of the transfers recommended by their lawyer to avoid probate.
Ten years passed by. They now have three children, Jack, (10) Jackie (7) and Maureen (4). Jack’s parents have moved away to enjoy warmer climates.
John and Mary should revisit their estate planning desires. Are his parents still capable of raising their children? When Maureen is 16, Jack’s parents will be 87. Have Jack and Mary considered planning possibilities for their digital assets? What about their business? Can it operate after they are no longer able to manage it? Are their children able to handle their inheritance as originally planned? Are John and Mary’s health care powers and living will directions up-to-date? Have they considered the effect that taxes and probate might have on their plan? Are there any other special circumstances they need to plan for?
We recommend you review your estate plan every 2-3 years or more often based upon your changes in family and your finances. Isn’t it time you reviewed your estate plan??
To discuss any questions you have regarding your estate plan or for a complimentary estate plan review, please contact:
Morris Saunders at:
email@example.com or (312) 368-0100.
Michael Weissman will be a featured speaker at the Specialized Lending Conference for the National Credit Union Association. The conference will take place on May 24, 2017 at the Downtown Hilton Hotel in Tampa, Florida.
Michael will also be both a speaker and moderator at a program sponsored by the Illinois State Bar Association’s Section Council on Commercial Banking, Collections and Bankruptcy. The program will take place on June 8, 2017 at the ISBA headquarters at 20 South Clark Street in Chicago, Illinois. To register, or for more information please click here.
While the BREXIT decision has been made, much ambiguity remains on the issue of trademark rights holders and their interests that are currently protected by European Union trademarks, commonly referred to as “EUTMs”.
Neither Theresa May’s BREXIT speech in January 2017, nor the UK government’s white paper entitled “United Kingdom’s exit from and new partnership with the European Union” published in February 2017 advise or guide trademark holders as to whether their rights will continue to be protected in the UK or whether trademark holders’ rights vis a vis the UK will simply cease to exist. However, certain intellectual property organizations such as The Chartered Institute of Trademark Attorneys (CITMA) have offered some ideas as to how this issue may be addressed. Their suggestions include the following three approaches: (1) the UK plus, (2) The Jersey model, (3) The Montenegro model, (4) The Tuvalu model, (5) Veto, (6) The Republic of Ireland model and (7) Conversion. The following is a description of how each approach would address the issue post-BREXIT.
(1) The UK plus
EUTM protection would be extended to include the UK, and possibly other European countries who are not currently members of the EU.
(2) The Jersey model,
The UK would deem EUTM registrations to have the same rights in the UK as they do in the EU and UK courts would recognize EUTM registrations as if they were UK registered marks for purposes of enforcement. However, the UK would not otherwise record these trade marks in the UK Trade Mark Office.
(3) The Montenegro model
All existing EU trade mark registrations would automatically be entered into the UK trade mark register as UK registrations where the marks would have the same description of services, same registration date, and where applicable, the same priority and seniority.
(4) The Tuvalu model
Like The Montenegro model, the existing EU trade mark registrations would be entered onto the UK Intellectual Property Office (“UKIPO”) registry, but only if the EU trade mark holder filed a form requesting the same within a prescribed time frame (to be determined).
The Veto system would resemble the Montenegro model where holders of EU trade mark registrations could request a mirror-image UK registration, but the UKIPO could then elect to refuse certain registrations that would not have been registrable under the UK laws, had the original application been filed in the UK.
(6) The Republic of Ireland model
Registrations in the EU would be enforceable in the UK until such time as the EU registration renewal deadline, at which time the EU registration holder would be required to create a UK registration that corresponds to its EU registration in addition to filing its EU renewal. Likely the UK registration would have to be filed within a certain amount of time after the EU renewal.
All EU registered trade marks would be automatically converted to UK applications, where they would then go through a full examination by the UKIPO as if it was a newly filed UK application.
While it remains to be seen which method will be adopted in 2019 when BREXIT takes effect, likely one of these approaches will become the procedure to follow. Businesses with sales in Europe and the UK should consider filing a separate trademark application in the UK now, as a precautionary measure. To learn more about how to protect brands in Europe and the UK, please contact:
firstname.lastname@example.org or (312) 368-0100.