Category: Business Law

What are the Legal Considerations for a New Trademark?

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Starting or growing a business comes with many legal considerations. A major component is branding the new venture with a trademark to provide identification. However, with more of the marketplace globally available, it can be challenging to find something that resonates with the business. Small business owners should not impulsively decide. Business owners should invest in researching the industry or product territory both locally and online to avoid resembling competitors.

Completing a trademark search will help identify potentially competing ideas and brands that will help the process. Having a unique last name or combining words can avoid common legal pitfalls. More common names or brands may appear if they are not directly competing in the same sector. Using an established name may create additional challenges, but it is not completely forbidden.

Check social media to see what potential competitors use with trademarks and general branding strategy. Social media platforms have become more vital in building new companies. App stores would be a good place to find brands with similar names and functions. There are also common law databases available for regional companies who entered the marketplace and have done business with a trademark but did not file nationally.

What Should Business Owners Avoid?

The following are some suggestions on what to avoid in creating a new trademark:

  • Being too similar phonetically to other trademarks.
  • Being too visually similar to other trademarks.
  • Being similar to brands with a record of challenging trademarks in court.
  • Coincide with any legal precedent that would warrant a legal challenge.

The U.S. Patent and Trademark Office has videos and other online resources to help companies avoid common mistakes in creating a trademark and expedite the approval process.

What Should Companies Do While Applying for a Trademark?

The application for a trademark will require a physical manifestation of the new mark, both in basic logo form and on apparel or marketing materials. Make sure the wording and illustration are distinctive enough to uniquely identify the brand for consumers.

Rights to a trademark go to the first company to use it in a specific field or region. However, federal registration can allow a company who does not file first to be the owner of a mark or brand name. While the process is long and costly, it may be beneficial long-term for a company to register federally. Locking in usage requirements happens when either a brand comes to market for sale, or the promotion of the brand is used through printed or digital resources. This works best for a consistently marketed or sold product or service. A trademark that is not used for about three years may lose its rights.

If applying, business owners should make sure to follow up with any questions or challenges that may be posed to try to avoid complex litigation issues. If anything arises, the legal process can take months or longer if it is not properly vetted and all procedures are followed.

Philadelphia Business Attorneys at Sidkoff, Pincus & Green P.C. Help Business Owners with Trademark Applications and Disputes

There are many considerations while forming a trademark for a new company. The U.S. Patent and Trademark Office strongly encourages using a licensed attorney with trademark law experience to help with the process. A Philadelphia business attorney at Sidkoff, Pincus & Green P.C. can help your company and defend your new trademark application. Call us at 215-574-0600 or contact us online for an initial consultation. Based in Philadelphia, we serve clients throughout Pennsylvania and South Jersey.

What are Common Legal Issues that Businesses Face?

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Managing a successful small business can be a lot of work, especially in the early stages, when many difficult financial decisions must be made. The biggest ones pertain to what owners plan to spend their limited budget on. Given that resources can be tight, it is understandable why some elect to avoid some big-ticket items, like hiring a lawyer. While that may seem to make sense in the short-term, it could wind up costing the company much more in the long run. There are several common problems that impact all companies that a knowledgeable lawyer would be able to help the firm avoid.

Do I Have the Right Structure for My Business?

One of the first things that an entrepreneur and their partners must decide on is the structure of their business. This is extremely important because it could have serious tax liability issues. Establishing the correct structure will save a company several severe headaches going forward. Some of the different types of structures include:

  • Sole proprietorship
  • Partnership
  • Limited Liability Company (LLC)
  • C-Corporation
  • S-Corporation

Each one of these structures handles the liability and tax responsibilities of the owner in a different way. An LLC, for instance, separates the two and treats them as two different entities. Owners should research the different corporate structures thoroughly before deciding on which to choose.

What are Some Employee Issues I Need to Consider?

Even if the structure of the company is secure, another common problem that all companies deal with is managing employees. One of the biggest aspects of that is deciding how to classify them and verifying that their classification matches their level of responsibility. There are three main types of classifications, which are:

  • Full time employee: This type of employee is someone who works more than 30 hours a week. The company is obligated to offer health insurance, Workers’ Compensation, and other benefits.
  • Part time employee: These employees work a maximum of 30 hours a week and are usually not eligible for benefits, although a company can offer them if it elects to.
  • Independent contractor: This is a person who operates outside of the structure of a particular office and works independently. They are responsible for paying their own Medicare and other taxes, and are not eligible for some universal benefits, like Workers’ Compensation.

Deciding how to classify employees can be a tricky action, as misclassifying someone can lead to litigation later on. The best way to avoid any problems is to evaluate a job description ahead of time and decide what the hours and responsibilities will be, then classify the position based on the added costs of potentially paying for benefits.

If that position cannot be fully funded, the company may have to do without it until it can find the funding somewhere else to pay for that position. The legal costs further down the road are not worth cutting any corners with a person’s pay or benefits.

What Type of Paperwork Should I File on a Regular Basis?

Maintaining a business is more than just keeping employees and customers happy. There is a significant amount of paperwork that must be filed with both the state and the federal government on an ongoing basis. If a firm is publicly held, it could fall under the jurisdiction of the Securities and Exchange Commission (SEC) on the federal level and state regulators. Regardless, the company will be under an obligation to file certain documents, including:

  • Financial statements: These documents contain a snapshot of the firm’s financial status, including its income statement, balance sheet, and statement of cash flow.
  • Financial information: Any data that the company chooses to post about itself on its website.
  • Annual reports: These are issued to shareholders once a year.
  • Prospectus: A document that describes the investment offering for the public.

What Should I Do if I Have a Contract Dispute?

While contracts are supposed to be binding agreements between two or more parties, there can be disagreements between those parties over one’s actions. It may also be necessary to break a contract because the two sides no longer wish to work together anymore. To avoid a messy legal dispute, it is best to thoroughly review any contract before signing it. All parties should include language that grants them an easy escape should certain violations take place, or some other action occur, such as one of the two sides is arrested or has some other public embarrassment.

Philadelphia Business Lawyers at Sidkoff, Pincus & Green P.C. Help Small Businesses with Legal Matters

If you are facing legal hurdles within your small business and need help finding a legal remedy, reach out to the Philadelphia business lawyers at Sidkoff, Pincus & Green P.C. For an initial consultation, call us at 215-574-0600 or contact us online. Located in Philadelphia, we serve clients throughout New Jersey and Pennsylvania.

Should I Pass the Family Business to the Next Generation?

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family business

There are about 5.5 million family-owned businesses in the U.S., caccording to advocacy group, Family Enterprise USA. Therefore, many business owners need to decide if, how, and when they will pass on their business to the next generation. The best way to ensure a smooth transition and successful business continuation is to have a succession plan. Business owners should develop the plan with input and support from all family members who have an interest in the business. However, that leads to the question of who should inherit the family business?

Sometimes there are no children to inherit the business. Other times, children do not want to inherit the business, and there are no other relatives or close friends they trust. Still, other business owners do not want to retire, and by the time they do, potential new owners have moved on. Before business owners can develop a succession plan, they need to get buy-in from those they want to inherit the business. The next generation of owners could be children, relatives, friends, or other business owners. Acceptance and support from all potential new owners are crucial before developing a succession plan. If children will inherit the family business, consult with a lawyer about an estate plan as there may be tax and equity considerations.

Why Does a Family Business Need a Succession Plan?

A good succession plan will detail plans for a business when the current owner retires, or if the unexpected occurs, such as a death or disability of the owner. Sadly, a business could simply die out without a solid plan for continuance in place. The business could also be lost to estate and inheritance taxes without a plan that addresses tax issues. If there is no clear plan in place for ownership transfer, family issues could harm both the business and family relationships. A succession plan will cover the details of how and when the transfer will occur, associated costs, a business valuation, and how the transfer will be financed.

What Does a Business Succession Plan Include?

A succession plan must include the right people, such as a business lawyer, accountant, financial advisor, business valuation expert, CFO, and all family members and others who will have a role or financial interest in the transferred business. Every business situation is unique and will require different plans. A succession plan should address the following in detail:

  • The mission, vision, guiding principles, and values agreed upon by the current owner and all successors.
  • A timeline of important personnel transitions, business deadlines, events, projects, and plan implementations.
  • Identify strengths, weaknesses, and development plans for each candidate, in addition to responsibilities and management expectations.
  • A business valuation, stock or other equity positions, sales and growth expectations, as well as budgets, business debts, and other important financials.
  • The types of insurance that need to be acquired, renewed, changed, or stopped.
  • A summary of operating procedures, including processes, policies, partners, vendors and suppliers, products and services, new projects, training, IT, human resources, customer and client demographics, and marketing/sales plans.
  • A communications plan stating how employees, business partners, customers and clients, the community, and local media will hear about the transition.

Creating a succession plan for the family business is a complex task that requires the expertise of trained professionals. Passing the torch to the next generation can go smoothly with the right people helping business owners.

Philadelphia Business Lawyers at Sidkoff, Pincus & Green P.C. Help Business Owners with Succession Plans

If you are considering passing on your business to a family member, relative, friend, or another business, a business succession plan can help make it a smooth transition. Contact a Philadelphia business lawyer at Sidkoff, Pincus & Green P.C. today. We pride ourselves on staying abreast of all developments in business law and business succession planning. Contact us online or call us at 215-574-0600 for an initial consultation. Located in Philadelphia, we serve clients throughout Pennsylvania and New Jersey.

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How Can Employers Help Employees Embrace Company Culture Changes?

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A distinct company culture is very important to the success of a business. Company cultures may change periodically to reflect new technologies and policies. Although necessary, this can be difficult for certain employees to embrace and accept, especially if they have been at the company for a long time.

Workplace culture is a broad term that encompasses a company’s physical environment to the mental and psychological space that company executives have created for their employees. It is the personality of a company that employees and clients embrace when walking into the office. Firm culture is important for a company to establish when expanding. A positive workplace culture will ultimately lead to a higher success rate for the company.

How to Handle Changes in Workplace Culture

Finding the perfect firm cultural balance may take time and is something that will continuously need improvement. Creating a workplace that can quickly and efficiently adapt to changes is important in making employees feel comfortable. The first step a company can take before, during, and after workplace change is to assess their current environment and develop a way to produce a more positive culture. To do this, company executives should put more priority on the hiring process to help weed out toxicity and hire positive people. Companies can also develop committees and programs to help maintain a positive work culture and help those who need it while transitioning to new workplace systems. The following are ways to help produce and maintain a positive work environment:

  • Firmwide meetings: Include every employee in a monthly meeting where all team members can ask questions and address their concerns. Seek feedback and employee engagement whenever possible to show employees that they are valued, and their opinions are important.
  • Anonymous complaints: Create a place where employees can address their problems anonymously if they do not feel comfortable speaking to their supervisors face-to-face.
  • Lead by example: Introducing new technologies or protocols to a workplace may be confusing and intimidating to employees. Executives should lead by example and show employees that change is good and necessary for the success of the company.
  • Diversity and inclusion committee: Create a committee that focuses on making a more equitable work environment.
  • Maintain a sense of community: Managers should ensure that their employees feel welcomed and part of a team. They should remind employees that they are a main component to the success of the company and are a valued team member.
  • Appropriate training: Managers should train their employees properly to prepare them for how their work culture is run and maintained. Training should also cover how change is enacted and handled to better prepare new employees for workplace adjustments.
  • Create change from an employee’s perspective: It may be easy for a manager to produce changes that they feel are good for the work environment, but it is more productive to approach change from an employee’s point-of-view and listen to what they have to say.

What to Do If an Employee is Unhappy with the Firm Culture

Not every employee reacts to company change in the same way. If an employee is upset or requires a slower transitional period, discuss with them their concerns. Changing and adapting to new company culture protocol can take time but is necessary when getting employees to embrace a business. Companies should create a workplace culture where employees feel comfortable and valued at work. Establishing a culture where change is embraced and accepted is also important to the success of a company, as well as to the success of individual workers.

Philadelphia Business Lawyers at Sidkoff, Pincus & Green P.C. Make Company Changes Easier to Understand

The Philadelphia business and employment lawyers at Sidkoff, Pincus & Green P.C. range in experience with business and employment matters to help produce the best outcome for our clients. Call us today at 215-574-0600 or contact us online for help with your legal matter. Located in Philadelphia, we serve clients throughout Pennsylvania and New Jersey.

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Are Business Losses Due to COVID-19 Covered Under Business Interruption Insurance?

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Many businesses have been forced to close during the pandemic. Restaurants, bars, gyms, and summer camps are just some of the businesses that have recently been seeking insurance coverage for their pandemic-related business interruptions. However, as coverage is typically dependent upon direct physical damage, most of these claims have been thrown out of court. Despite consistent rulings in favor of insurance companies, businesses continue to file claims for interruption and canceled events due to COVID-19.

What is Business Interruption Insurance?

Business interruption insurance replaces lost income that a business suffers after a covered loss. It is typically purchased by companies with a physical location that serves customers and is added on to their property insurance policy. If the business should lose income due to a fire or natural disaster, business interruption insurance can replace any income or business losses. Business interruption insurance does not cover flood or earthquake damage, utilities, broken items, or any undocumented income. Rather, this type of insurance only helps businesses cover operating expenses, such as:

  • Revenue
  • Mortgage, rent, or lease payments
  • Loan payments
  • Taxes
  • Payroll
  • Relocation costs

Although insurance policies differ regarding terms, most include some type of language stating that there must be direct physical damage in order for business interruption claims to be paid out. Therefore, if a hurricane blew away a roof or a fire burned down inventory, business interruption insurance would provide coverage. However, what if there was no physical damage, as is the case with many businesses affected by COVID-19? Business owners seeking legal relief are discovering that when it comes to lost income due to the pandemic, they may be left to their own devices.

What About Pandemic-Related Losses?

A professor at the University of Pennsylvania notes that currently, there are approximately 700 coverage lawsuits brought by businesses seeking coverage for pandemic-related business interruptions. This exceeds the normal number of claims for natural catastrophes by two or three times and is more than the number of case filings for hurricanes Sandy, Irma, and Harvey put together.

So far, this widespread need is not being met; courts in California, Michigan, and the District of Columbia have sided with insurers, leaving businesses without coverage for their losses. This is because most policies require direct physical loss or damage to property for coverage to apply. COVID-19 causes no tangible property damage and therefore does not form the basis of a valid claim.

Insurance companies claim they do not have enough funds to cover all pandemic-related claims and that their policies were not meant to cover losses outside of direct physical damage. However, it remains to be seen whether they will be compelled to do so as policyholders continue to file business interruption claims, attempting to convince the courts to construe ambiguous language in their favor.

Philadelphia Business Litigation Lawyers at Sidkoff, Pincus & Green P.C. Help Business Owners Recover Pandemic-Related Losses

If your business suffered losses due to the pandemic, contact a Philadelphia business litigation lawyer at Sidkoff, Pincus & Green P.C. Our knowledgeable and dedicated attorneys pride themselves on staying abreast of all developments in business law and will fight to obtain the benefits to which you are entitled. Contact us online or call us at 215-574-0600 for an initial consultation. Located in Philadelphia, we serve clients throughout Pennsylvania and New Jersey.

Small Business Fraud Discovered During Pandemic

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Due to the Coronavirus pandemic and to address the financial fallout experienced by many small business owners, the federal government instituted the Paycheck Protection Program. This program is part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act that was initiated in March to prevent further unemployment and ease the financial burden faced by many small business owners throughout the nation.

The program sought to prevent unemployment by allowing applicants’ loans to be forgiven if they were used to cover payroll and other specified expenses related to the pandemic. The program meant to support small businesses was exploited by several people who lied about having legitimate businesses and instead used the money for luxury items. Several of the loans were disbursed to large, publicly traded companies and financial firms instead of small businesses that truly needed it.

Program Offerings

The program allowed small businesses to borrow up to 2.5 times their monthly average payroll costs. The loan could be forgiven in full if the small business owner retained employees for at least eight weeks after the loan was procured. Small business owners could also put a portion of the loan toward rent, utilities, and other specified expenses. The program’s loan administration was outsourced to the Small Business Administration (SBA) and a network of banks nationwide. Due to the high demand for loans, the SBA and banks involved were overwhelmed with having to administer 10 times the volume of loans they were used to.

Issues Discovered in the Program

Lack of a definition of what constituted a small business in order to be eligible for the program led to many large businesses partaking in the loans, even if they were able to withstand the financial stress of the pandemic. This limited the funds available to small business owners who truly needed them.

Banks were also uncertain about how the loans should be distributed and how they would be forgiven. Because the program offered immediate loan processing, many banks could not look over paperwork and lacked the necessary documentation and materials to process the loans at the scale and demand presented. Many banks were inexperienced in administering the loans at the scale required. They had to process loans rapidly for which they were not prepared.

Criminal and Fraud Charges Waged by the Justice Department

The Justice Department has charged at least 57 people for stealing from the program. The total amount stolen is more than $175 million. These individuals and groups sought loans ranging from $30,000 to $24 million. Those accused have lied about their businesses or fraudulently claimed to use the money for purposes other than those specified by the program. Some of those who procured the loans involved criminal rings.

The Justice Department is investigating these crimes with the help of the SBA, the Treasury Department, the Internal Revenue Service (IRS), and the United States Postal Service (USPS). They recovered and froze more than $30 million from those who violated the program or acted fraudulently.

Philadelphia Business Lawyers at Sidkoff, Pincus & Green P.C. Advocate for Business Owners Affected by the Pandemic

If your business is being accused of not using SBA loan funds appropriately, contact the Philadelphia business lawyers at Sidkoff, Pincus & Green P.C. We specialize in compliance matters and can help you navigate federal and state regulations and policies affecting business owners. For more information, contact us online or call us at 215-574-0600 for an initial consultation. Located in Philadelphia, we serve clients throughout Pennsylvania and New Jersey.

Common Types of Business Lawsuits

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According to the Small Business Administration (“SBA”), up to one-half of all businesses are likely to be sued in any given year and practically all businesses are the subject of a lawsuit at some point during their existence. Lawsuits can be very costly on several levels, especially to small business owners. Litigation can cause both emotional and financial hardship. It may also force a business to change the way it operates. Business owners can save time and money, and potentially avoid lawsuits, by becoming familiar with the types of business lawsuits and reaching out to a qualified attorney if they become the target of litigation. The SBA groups business lawsuits into the following categories:

  • Employee
  • Customer
  • Business-specific

Some lawsuits do not fit neatly into these categories, such as personal injury claims arising from auto accidents. When an employee gets into an accident while driving a company vehicle, a commercial auto insurance policy will likely cover the costs.

Lawsuits Filed by Employees

Lawsuits filed by employees can be expensive and oftentimes command attention from the press. In one 15-year period alone, Merrill Lynch paid nearly half a billion dollars to settle sexual harassment and racial discrimination claims. Lawsuits filed by employees may include the following:

  • Claims of discrimination due to age, race, sex, religion, gender identity, or disability
  • Harassment claims, including bullying and sexual harassment
  • Whistleblower claims
  • Wrongful termination
  • Breach of contract
  • Minimum wage complaints, denial of overtime pay, or other complaints involving misclassification

Many employee lawsuits can be avoided by hiring a qualified employment lawyer to assist in drafting policies and employee handbooks, as well as reviewing employee contracts. Employers can also take steps to create a company culture that does not enable sexual harassment in the workplace.

Lawsuits Filed by Customers

Lawsuits filed by customers tend to fall into three categories: premises liability, discrimination, and customer satisfaction. Premises liability lawsuits include slip-and-fall accidents, such as when a customer in a grocery store slips on a wet floor and sustains an injury. Premises liability lawsuits may also involve situations in which the business failed to provide adequate lighting, security cameras, or locks, which resulted in an injury sustained by a customer or other third party. If a business refuses to provide service to a customer because of their sexual orientation, race, religion, gender, or disability, that business may be the target of a discrimination lawsuit.

Customer satisfaction lawsuits typically focus on consumer rights. Customers may allege that they did not get what they paid for, or that the business violated the Fair Credit Reporting Act (“FCRA”) or other consumer-related regulation. In general, a small business may be able to avoid customer satisfaction litigation by reimbursing the customer for the product in question or providing additional services at no charge. In most cases, it costs business owners less to satisfy the customer rather than proceed with litigation, even if they know they customer may be wrong.

Lawsuits Involving Other Businesses

Suppliers, vendors, and competing businesses may file lawsuits involving breach of contract or intellectual property rights. Breach of contract essentially means that the business failed to adhere to the terms of the contact they signed. According to the SBA, approximately one-third of all litigation involving small businesses concerns breach of contract. Breach of contract may take many forms, which include the following:

  • Delivering damaged goods
  • Failing to pay for goods
  • Failing to deliver goods
  • Revealing trade secrets

Issues involving intellectual property rights may also arise with competing businesses. Another firm may claim that their company’s logo, image, or slogan was copied. Within the high-tech industry, lawsuits involving trade secrets are not uncommon.

Cost of Business Lawsuits

According to the SBA, legal costs for small businesses typically range around $10,000 but can easily exceed $150,000. Large companies may pay higher fees. However, the real cost to small businesses is the emotional hardship and upheaval caused to their future operations. Seeking the advice of skilled legal counsel can help businesses avoid these catastrophes.

Philadelphia Employment Lawyers at Sidkoff, Pincus & Green P.C. Help Business Owners Facing Litigation

If you are a business owner facing a lawsuit, the Philadelphia employment lawyers at Sidkoff, Pincus & Green P.C. are always available to advise your business regarding the best course of action when you face legal challenges. We can help you stay focused on running your business while we handle your legal matters. Whether you have a pressing legal challenge now or are looking for skilled counsel to avoid lawsuits in the future, please reach out to our staff by calling 215-574-0600 or contact us online. Located in Philadelphia, we serve clients throughout Pennsylvania and New Jersey.

Why Should I Avoid Copying Another Business’s Contract Language?  

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Business Contract

Every business should have a contract, often called Terms of Use or Privacy Policy, that is specific to their company, and includes detailed information about the parties involved, the goods or services that are being exchanged, and the details of the agreement. Start-up companies or entrepreneurs who are building a business may be tempted to use language from another company’s contract to avoid paying a lawyer to draft a new contract. Tempting as this may be, there are a number of reasons why this is highly discouraged. The cost of hiring a lawyer to generate a business contract will save you money in the long run and protect your company from lawsuits or regulatory investigations.

Reasons Why Copying a Contract is Discouraged

  • Bad Publicity: Negative media attention can be very damaging to a small company. Depending on how small the company is, it may not survive the bad publicity. A company can run into trouble if the contract they copied was drafted to comply with laws from another jurisdiction. In addition, it could be out of date or include protections for goods or services that are different from those provided by your company. This could leave the company vulnerable to lawsuits.
  • It could scare off investors: Potential investors may walk away if they find out that your company is involved in a lawsuit or is being investigated by state or federal regulators.
  • A strong contract distinguishes you from the competition: The terms and conditions of a contract should reflect the company’s mission and values. It does not need to contain complicated legal jargon. In fact, the best contracts are easy to read and understand, legally accurate, and on brand.
  • Copying a contract is illegal. Copying another company’s contract without their permission is a violation of copyright law. It also sets an example within the company that it is acceptable to break the rules.
  • The company’s entire user agreement could be invalidated. If it is discovered that a company copied another company’s legal contract, it could invalidate the contract and leave the company vulnerable to steep fines, class action lawsuits, and put the future of the organization at risk.

There are contract templates available online. However, they are often written by individuals who do not have a legal degree and are unqualified to write a business contract. Therefore, it is highly discouraged to go this route. Invest the time and money in hiring a business lawyer to draft a legal contract for your company.

Philadelphia Business Lawyers at Sidkoff, Pincus & Green P.C. Assist Clients with Business Contracts

If you are starting up a new company, or you require assistance with important legal documents for your existing company, do not hesitate to contact the Philadelphia business lawyers at Sidkoff, Pincus & Green P.C. We have extensive experience in drafting business contracts that are concise, legally accurate, and reflect your company’s brand and mission. To schedule a confidential consultation, call us today at 215-574-0600 or contact us online. Located in Philadelphia, we serve clients throughout Pennsylvania and New Jersey.

Terminating a wedding contract in Pennsylvania due to COVID-19 & Coronavirus

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Many couples and venues are having to postpone or even cancel wedding plans because of the effects of the novel Coronavirus on travel, events, and socialization. The starting point for determining your rights would be to look to the contract’s language, which may contain a force majeure or “act of god” clause. Such a clause may explicitly excuse the performance of a wedding venue or vendor, or excuse the bride and groom from the payment terms of the contract. The precise language of the force majeure clause is most important, as it may be read to unambiguously include or exclude events such as COVID-19.  Moreover, there have been legislative efforts to enact laws that would mandate the application of any force majeure clause to apply to the pandemic. To date, state and local governments in Pennsylvania have not enacted such laws.

If the wedding-related contract in question does not include a force majeure clause, or if the clause uses vague language that may not ultimately cover the COVID-19 pandemic, Pennsylvania recognizes two common law doctrines that may be of use: frustration and impossibility.

The doctrine of impossibility applies in the event that a party’s performance was made impracticable through no fault of his own by an unforeseeable event, the non-occurrence of which was a basic assumption of both parties at the time of agreement. Performance will be excused, unless language or circumstances point otherwise. Pennsylvania’s definition of “impossibility” requires strict impracticability. As such, mere unanticipated difficulty is not likely to excuse performance.

Pennsylvania’s frustration of purpose doctrine protects excuses performance even if it is still possible so long as the event substantially frustrates a party’s principal purpose. Additional requirements are the assumption by both parties that the event would not occur and no fault on behalf of the party asserting the application. The ultimate question for frustration is whether the unforeseeable event significantly altered the circumstances of the agreement such that performance would no longer fulfil any aspect of its original purpose.

If you have concerns about how the COVID-19 will impact a wedding contract, the lawyers at Sidkoff, Pincus & Green P.C. can assist you with these matters. To schedule an initial consultation, call us at 215-574-0600 or contact us online. Located in Philadelphia, we serve clients throughout Pennsylvania and New Jersey.

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Applying Pennsylvania Law to Contracts without Force Majeure clauses during COVID-19

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There are many questions being raised about whether parties are required to perform under contracts during the COVID-19 health crisis. In some cases, government shutdowns have made performance impossible, and in other cases, health concerns have made performance unwise and impractical.  A force majeure clause is a provision in an agreement that excuses a party from performance if an unforeseeable event arises. This type of clause is also commonly referred to as an “act of god” provision and it is a common starting point for a legal analysis of whether performance will be required due to concerns over COVID-19.  However, what happens if your contract does not contain a force majeure clause?

If your contract is governed by Pennsylvania law, then the courts will likely look to common law, including the doctrine of impossibility and the frustration of purpose doctrine. The doctrine of impossibility applies in the event that a party’s performance was made impracticable through no fault of his own by an unforeseeable event, the non-occurrence of which was a basic assumption of both parties at the time of agreement. Performance will be excused, unless language or circumstances point otherwise. Pennsylvania’s definition of “impossibility” requires strict impracticability. As such, mere unanticipated difficulty is not likely to excuse performance.  Pennsylvania’s frustration of purpose doctrine excuses performance even if it is still possible so long as the event substantially frustrates a party’s principal purpose. Additional requirements are the assumption by both parties that the event would not occur and no fault on behalf of the party asserting the application. The ultimate question for frustration is whether the unforeseeable event significantly altered the circumstances of the agreement such that performance would no longer fulfil any aspect of its original purpose.

If you have concerns about how COVID-19 will impact a contract with or without a force majeure clause, the lawyers at Sidkoff, Pincus & Green P.C. can assist you with these matters. To schedule an initial consultation, call our team at 215-574-0600 or contact us online. Located in Philadelphia, we serve clients throughout Pennsylvania and New Jersey.

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