LLC Bound by Contract Even Though Contract Was Outside Its Purpose and Signatory Was Technically Not a Manager

The following is the text of an e-bulletin that I authored on apparent authority and that was published by the Corporations Committee of the Business Law Section of the State Bar of California. In  Western Surety Co. v. La Cumbre … Continue reading

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Filed UCC Termination Statement Binding on Lender Even If Mistaken

In a recent case, a lender made several financings of a borrower. The borrower paid off one financing, and the lender authorized the filing of a termination statement to release its security interest in a particular asset that secured that … Continue reading

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Assignee of Suspended Corporation Cannot Sue on Assigned Claim

In Cal-Western Business Services, Inc. v. Corning Capital Group, Inc. (2013) 221 Cal. App. 4th 304, a judgment creditor assigned to Pacific West One Corp. the judgment creditor’s interest in a judgment against Corning Capital. Then, at a time when Pacific West … Continue reading

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Excluding Assets From a Personal Guaranty

The following is the text of an e-bulletin that I prepared that was published by the Corporations Committee of the Business Law Section of the State Bar of California. This was republished (under the title of “Excluding Assets from a … Continue reading

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California Supreme Court Overrules Prendergrass

In Riverisland Cold Storage, Inc. v. Fresno-Madera Production Credit Association (January 14, 2013), the California Supreme Court overruled a precedent of over 75 years’ standing (Bank of America etc. Assn. v. Pendergrass (1935) 4 Cal.2d 258) and held that a … Continue reading

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Bulk Sales Law: A Possible Trap for the Unwary Buyer of a Business

Buyers of businesses should be aware that California, like some other states, has a “bulk sales” law. Its official name is Uniform Commercial Code—Bulk Sales. The bulk sales act is designed to protect the creditors of a business by giving … Continue reading

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Careful Drafting Pays off in Contracts

Flint Hills Resources, LP  v. Jag Energy, Inc., 559 F.3d 373 (5th Cir. 2009) doesn’t establish any particularly important principle of law. Instead it’s being mentioned because it illustrates the value of good drafting. Flint Hills, a refiner of crude … Continue reading

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A disclaimer can be worth its weight in lawyers

Doe v. SexSearch.com, 551 F. 3d 412 (6th Cir. 2008). Plaintiff John Doe, filing under a pseudonym, appealed the dismissal of his complaint against defendant, SexSearch.com (“SexSearch”), an online adult dating service that facilitates sexual encounters between its members.  In … Continue reading

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Breach of warranty in the sale of goods and the statute of limitations

Cardinal Health 301, Inc. v. Tyco Electronics Corp. (2008) 169 Cal. App. 4th 116. Holdings Noted The four-year statute of limitations bars warranty claims unless the warranty explicitly extends to future performance of the goods and discovery of the breach … Continue reading

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