The High-touch Legal Services® Blog…for Startups!

© 2009-2021 Dana H. Shultz

” Legal Tender ” Does *Not* Mean that You Must Accept Cash

Logo for Quora, where Dana Shultz answered a question about legal tenderThis post about legal tender is a bit off-topic for this blog. However, I am writing it because it clears up a common misunderstanding, about which I recently wrote on Quora. Please see On every US dollar bill the message “This note is legal tender for all debts public and private” is printed. How is it then legal for some businesses to not accept cash?

The U.S. Department of the Treasury discusses whether the “ legal tender ” language on U.S. currency requires that cash payments be accepted. Quoting a portion of Legal Tender Status (link and emphasis added): (more…)

At-will Employment – Why It Is the Norm in the U.S.

Logo for Quora, where Dana Shultz answered a question about at-will employmentAt-will employment permits either an employer or an employee to terminate their relationship at any time for almost any reason. This post explains why at-will employment is the norm in the U.S.

I am basing this post on a Quora question that I answered recently. Please see Why are labour laws governing companies almost non existent in North America, compared to Europe?  (more…)

Pitch Coaches Teach How to Sell in the US

Logo of WSJ.com, which ran an article about pitch coachesIn a recent article (Foreign Entrepreneurs Learn Art of the American Pitch), the Wall Street Journal discussed the role of “pitch coaches” who help foreign entrepreneurs promote themselves in the US. While the article focused primarily on pitches to investors, it applies to selling one’s business to clients and colleagues, as well.

The thrust of the article is that selling in the US is different from selling in other countries. In my work with international clients, I have seen the same thing.

Here are some of the ways that pitch coaches say pitches need to be tailored to work best in the US.

Independent Contractor Misclassification Can Be Expensive

Picture of several gold bars, symbolizing the cost of misclassifying an independent contractor

I have written several times about potential undesirable consequences of misclassifying an employee as an independent contractor. It’s time for an update.

In 2012, California Labor Code Section 226.8 took effect. That statute is directed toward willful (i.e., voluntary and knowing) misclassification of employees as independent contractors. Consequences can include the following. (more…)

A. T. Kearney: US Seen as Best for Foreign Direct Investment

Logo for AT Kearney, which publisheds study about foreign direct investment

Last week, global management consulting firm A.T. Kearney released its 2013 Foreign Direct Investment Confidence Index. The major surprise: For the first time in more than a decade, senior executives in large companies chose the US as the most favorable place to make foreign direct investment (FDI).

According to Kearney, the US rose to the top for the following reasons:

  • After downturn-induced cutbacks, companies are investing in productivity-enhancing tools and equipment.
  • The dollar has weakened, while wages in developing countries have risen.
  • Most notably, China slipped to second place because increasing labor costs raise questions about the long-term attractiveness of China’s development model.

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Infographics Explain What the U.S. *Really* is Like

Interstate highway system as a subway map - sample of infographics discussed by this post

Cameron Booth’s Poster: Interstate Highway System as a Subway Map

I found a recent Quora post concerning Interesting Infographics about the U.S. quite entertaining. I realized it could be a quick way for international readers of this blog learn about Americans’ perceptions of the most important issues that they face.

The infographics address topics as diverse as: (more…)

“Giant Cock” Excluded from Apple’s App Store

Logo for Apple, which did not let Giant Cock into its App Store

Yesterday, in San Francisco, I talked to one of the many foreign attendees at the Game Developers Conference. He told me about a game he had developed, which featured a giant rooster.

In the developer’s native language, the word for “rooster” is similar to the English word “cock”, so he called the game “Giant Cock” and submitted it to Apple’s App Store. Apple rejected the game without explanation. (more…)

What is a Derivative Work, and Why should I Care?

Picture of Leonardo's Mona Lisa with mustache and goatee added by Marcel Duchamp

Marcel Duchamp’s derivative work of Leonardo’s Mona Lisa

On occasion I am asked about the extent to which a new work can incorporate elements of a pre-existing work without infringing the pre-existing work’s copyright. To answer such a question, one must understand derivative works.

17 U.S.C. Section 101 says (emphasis added):

A “derivative work” is a work based upon one or more preexisting works, such as a translation, musical arrangement, dramatization, fictionalization, motion picture version, sound recording, art reproduction, abridgment, condensation, or any other form in which a work may be recast, transformed, or adapted. A work consisting of editorial revisions, annotations, elaborations, or other modifications which, as a whole, represent an original work of authorship, is a “derivative work”.

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What’s in a Name? A Lot, if You’re a Corporation

Engraved portrait of William Shakespeare

In Act II, Scene II of Shakespeare’s Romeo and Juliet, Juliet wishes that she and Romeo could simply set aside their warring families, famously asking, “What’s in a name?” I thought about this question recently as I was helping a foreign client set up a corporation here in the U.S.

The foreign client is based in the U.K. It wanted to form a U.S. subsidiary with a similar name for brand-identification purposes. To avoid revealing the identity of the client, I will refer to it as “Amalgamated Widget Solutions, Ltd.” and the desired name of its U.S. subsidiary as “Amalgamated Widget Solutions, Inc.”

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Are International Contracts Effective and Enforceable?

Flag of England

Flag of England (Yes, fellow Americans, there is an English flag separate from the UK flag – do you see the relationship?)

This post reproduces, almost verbatim, a Quora question and my answer. Q. How effective and enforceable are contracts between parties located in the United States and England?

A. Such agreements can be effective and enforced – agreements between parties in different countries are entered into routinely. (more…)

Ten Tips for Success in the U.S.

Having helped more than a dozen foreign companies set up operations here during the past few years, I am pleased to offer “Ten Tips for Success in the U.S.” on the Downloads page – just Sign Up for Free Downloads using the drop-down list in the sidebar.

Here are the titles of the ten tips, which are discussed in greater detail in the document:

  1. Work with complementary businesses that are already established here
  2. Manage overseas personnel on the principle “trust but verify”
  3. Form your corporation or limited liability company properly
  4. Be ready for a legal system that is different from the one back home
  5. Identify and protect intellectual property (IP) that is used here
  6. Develop detailed employee and independent contractor agreements
  7. Choose an accountant with international tax experience
  8. Be prepared to obtain a federal employer identification number
  9. Conduct due diligence on potential investors
  10. Agree on business terms before you prepare a written agreement

This blog does not provide legal advice and does not create an attorney-client relationship. If you need legal advice, please contact an attorney directly.

International Business and Agreements: Learning about Legal Culture

Over the years I have negotiated a number of international agreements, typically representing domestic clients. My more recent work with EU-based clients, however, has given me additional insights about the U.S. and other legal systems.

These clients have established technology businesses in Europe. Each recently set up operations here in the Bay Area and asked that I adapt existing agreements for use in the U.S. As I work with these clients, two differences between the U.S. and the European Union jump out at me.

Length of Agreements

First, in the U.S. we often have longer agreements. European contracts tend to rely on, and implicitly or explicitly incorporate, detailed statutory provisions that do not exist here in the U.S. Furthermore, agreements here tend to include more business details and legal protections in case the relationship sours and ends up in litigation. For example, one client shared its existing reseller agreement. I found the document charming in its brevity and the abundance of white space on the page. By the time I added everything that is considered normal here in the U.S., the new version had four times as many words!

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Eminent Domain: The U.S. Giveth, the U.S. Taketh

Photo of a hand grabbing money, symbolizing the US government's eminent domain powersA fundamental tenet of patent law is that the owner of a patent can preclude others from using or manufacturing inventions that the patent covers. Because of eminent domain, however, that there is a major loophole regarding the U.S. government.

Section 1498(a) of Title 28 of the U.S. Code says, in part:

“Whenever an invention described in and covered by a patent of the United States is used or manufactured by or for the United States without license of the owner thereof or lawful right to use or manufacture the same, the owner’s remedy shall be action against the United States in the United States Court of Federal Claims for recovery of his reasonable and entire compensation for such use and manufacture.”

(Section 1498(b) provides similarly with respect to copyright infringement by the United States.) (more…)