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Enforcing Arbitration Clauses in 'Hidden' or Unlawful Franchise Agreements
Licensors, manufacturers, and other businesses that find themselves as unwitting franchisors face interesting issues when they attempt to enforce an arbitration clause. Most registration states will usually have statutory provisions that declare that the sale of an unregistered franchise or the sale of a franchise without the required disclosure is unlawful. See, e.g., Cal. Corp. Code ” 31110, 31119; 815 Ill.Comp.Stat. ' 705/5; N.Y. Gen. Bus. Law ' 683.1; Wash. Rev. Code ' 19.100.020.(1). However, in the usual case, the sale is not declared to be void, but is voidable through an action for rescission. See, e.g. Cal. Corp. Code ” 31300; Wash. Rev. Code ' 19.100.190(2); N.Y. Gen. Bus. Law ' 691; 815 Ill.Comp.Stat. ' 705/26.
When the putative franchisee sues in court, it can be expected that it will attempt to maximize the remedies allowed by the registration laws, such as rescission and/or statutory penalties. If the challenged agreement has an arbitration clause, it is likely that the unwitting franchisor will petition a state or federal court to compel arbitration. It can be expected that the putative franchisee will resist such an attempt by claiming that the contract is an illegal franchise agreement and thus the arbitration clause cannot be enforced.
The cases that have dealt with the defense of illegality to enforcement of arbitration agreements usually follow the rules that have been developed with respect to allegations of fraud in the inducement, but there are some differences that should not be overlooked. The outcome of such a challenge will largely rise or fall on a determination of whether the agreement is void or voidable, whether the Federal Arbitration Act, 9 U.S.C. ” 1 et seq. (FAA) will apply, and if so, in what federal circuit the moving party lands.
Yachts, Jets, Horses & Hooch: Specialized Commercial Leasing Models
Defining commercial real estate asset class is essentially a property explaining how it identifies — not necessarily what its original intention was or what others think it ought to be. This article discusses, from a general issue-spot and contextual analysis perspective, how lawyers ought to think about specialized leasing formats and the regulatory backdrops that may inform what the documentation needs to contain for compliance purposes.
Hyperlinked Documents: The Latest e-Discovery Challenge
As courts and discovery experts debate whether hyperlinked content should be treated the same as traditional attachments, legal practitioners are grappling with the technical and legal complexities of collecting, analyzing and reviewing these documents in real-world cases.
Identifying Your Practice's Differentiator
How to Convey Your Merits In a Way That Earns Trust, Clients and Distinctions Just as no two individuals have the exact same face, no two lawyers practice in their respective fields or serve clients in the exact same way. Think of this as a "Unique Value Proposition." Internal consideration about what you uniquely bring to your clients, colleagues, firm and industry can provide untold benefits for your law practice.
Risks and Ad Fraud Protection In Digital Advertising
The ever-evolving digital marketing landscape, coupled with the industry-wide adoption of programmatic advertising, poses a significant threat to the effectiveness and integrity of digital advertising campaigns. This article explores various risks to digital advertising from pixel stuffing and ad stacking to domain spoofing and bots. It will also explore what should be done to ensure ad fraud protection and improve effectiveness.
Turning Business Development Plans Into Reality
This article offers practical insights and best practices to navigate the path from roadmap to rainmaking, ensuring your business development efforts are not just sporadic bursts of activity, but an integrated part of your daily success.