By Attorney Jaclyn Kallie

The impact of the COVID-19 outbreak continues to escalate each day. Issues continue to arise both due to the outbreak itself and as a result of our response to it. We will continue to monitor the legal implications of the pandemic and help address legal and practical issues that may arise during this challenging time.

The COVID-19 pandemic presents multiple different types of potential contractual issues.  Of particular importance is a force majeure clause that may be present in a contract. A force majeure clause is intended to address a potential “force of nature” disruption that may excuse performance of a contract. Even if a contract does not have a force majeure clause, it may still be possible to excuse performance under other legal theories, including frustration of purpose.

By Attorney Jaclyn Kallie

Courts in each county, as well as the Eastern and Western Districts of Wisconsin, have responded differently to COVID-19 by implementing a variety of measures that are affecting existing and contemplated civil litigation matters. We are continuing to monitor these announcements and are committed to providing you with the most up-to-date information as it becomes available. Most notably, on March 22, Justice Bradley issued an order suspending all civil jury trials scheduled prior to May 22 and temporarily suspending all in-person proceedings statewide, with certain limited exceptions. Many hearings and court conferences can and will continue to occur by remote attendance. Likewise, mediations and depositions can also be conducted remotely. While remote technology can provide an alternate solution to certain aspects of litigation, not every court will be as sympathetic as others with regard to extensions, and parties need to remain mindful of existing deadlines. 

Last week, Governor Tony Evers instituted a Stay-At-Home Order, ordering the non-essential workforce to stay at home. While necessary to fight COVID-19, the governor’s order will have significant and wide ranging legal consequences.

By Attorney Chris Strohbehn and Law Clerk Nathan Froemming

Business Interruption Insurance Coverage

With COVID-19 spreading rapidly, Wisconsin Governor Tony Evers issued an executive order on March 17th forcing restaurants and bars across the state to close their doors. As a result, restaurant and bar owners are losing significant income, and they will be likely to incur additional expenses because of the coronavirus pandemic. These disruptions are likely to lead to a significant increase insurance claims by tavern owners against insurance policies that offer business interruption coverage. Whether these claims will be covered will depend on the terms and conditions included in a policy, as well as the circumstances surrounding the losses suffered by the bar or tavern.

Successful business interruption insurance claims regarding infectious diseases are uncommon. In fact, the law regarding business interruption coverage related to epidemics or pandemics of infectious diseases is limited in the U.S., and these types of cases are often unique.

If you are about to take the exciting step of forming a new business, you should not overlook the important decision of the type of entity your business will utilize. The business entity you select will affect every facet of your business, so you should make the decision with the aid of trusted legal professionals.

No two situations are the same. Simply because a competitor or similar business has utilized, for example, an LLC business structure does not mean that this is the right choice in your situation.

Why Business Type Matters

The law defines several types of business entities, and each has distinct features that could help or hurt your business. The type of entity selected will affect how the business is taxed, and different business entities have different requirements in terms of paperwork. The potential personal liability that a business owner may be exposed to is another key consideration. Finally, the type of entity you select will dictate how you can raise money. 

A business is only as strong as the contracts it enters. There are many ways that a business contract can be detrimental to a company: it can favor the other side, it can be unclear from a legal perspective, it can be vague, and it can leave out key terms. Many business owners fall victim to using a template contract found online that is not properly tailored to the parties and their unique situation.

On the other hand, a well-crafted contract can be an important asset to a business, giving the business stability. It should be noted that there are many ways a business contract can be poorly constructed, and those business owners looking to enter into a contract should be aware of these areas. Contract issues that commonly affect business owners include:

• Too much legalese. If you do not understand the terms of the contract because legal jargon is used, this does not mean the contract is a good one. A good contract should be readable and understood by the parties. There may be a term or two that will need to be explained to you by a lawyer, but on the whole, a good contract should be understandable.
• Lack of specificity. A contract has the same effect between the parties as law. Thus, it should be clear what each party’s obligations are. Any detail known should be included. For example, if payment is to be mailed to a party, the address for the party should be written out in the contract. The entire agreement should be reduced to writing. It is dangerous for the agreement to be partially in writing and partially verbal.  
• Failure to address the contract’s termination. All contracts will come to an end, so the contract should contemplate how that will be done and under what circumstances.
• Omitted litigation provisions. Most contracts should include an agreement on what law will govern any disputes arising between the parties, and if a party will be liable for attorney’s fees and court costs in the event of a contractual breach.

A Milwaukee, WI Commercial Contract Lawyer Can Help

If you are considering signing a business contract, you should have an attorney on your side. The qualified Milwaukee, WI business contract attorneys at our firm will use our years of experience in representing businesses when reviewing your contracts and ensuring that they meet your business objectives.