Business & Contract Questions
This area of law governs the promises people and businesses make to each other — when a deal becomes binding, what happens when someone does not hold up their end, and who is personally on the hook when a business is involved.
Two related sets of problems live here. The first is contracts: work performed and not paid for, a repair or a build done badly, a signed agreement someone now wants out of, a penalty or fee being demanded, a service that was not what was promised. The second is the business itself: choosing where and how to form an LLC, documenting equity or revenue-share promises to a partner or early employee, getting out of a company after a falling-out, and licensing or enforcing intellectual property.
The through-line in the questions people actually ask is a gap between a document and an understanding. Someone signed a contract quickly and is now looking at a clause they did not read. Someone did work on a handshake and cannot prove the terms. Someone assumed a business entity would protect them, or assumed it protected them for things that happened before the entity existed. Courts generally start with the written document, so the written document is where any honest answer starts too.
The concepts worth carrying into that conversation are short. A contract needs an offer, an acceptance, and consideration — something of value moving both ways — and it does not always have to be in writing to be enforceable. Where there is a signed writing, it usually controls over what was said before signing. The standard remedy for a breach is money that puts the injured party where performance would have left them, not a court order forcing someone to perform, and the injured party generally has to take reasonable steps to limit the loss rather than let it run up.
On the entity side, the point of an LLC or corporation is to separate business debts from personal assets, but that separation is narrower than most people think. It does not cover your own conduct, anything you personally guaranteed, obligations you took on before the entity existed, or a company run so casually that there is nothing to separate.
State law drives the outcome on a long list of these: which contracts must be in writing and at what dollar amount, whether and how far a non-compete is enforceable, contractor licensing rules and whether an unlicensed contractor can sue at all, pre-suit notice requirements in construction disputes, how long you have to sue on a written versus an oral contract, what happens to an LLC member's interest when the operating agreement is silent, and the dollar ceiling in small claims court. Contracts also frequently contain choice-of-law and venue clauses that hand the dispute to a different state's law than the one you live in.
What to know
There is no general three-day right to cancel a contract
The widely believed "three-day rule" is a narrow federal one. The FTC's cooling-off rule gives a buyer until midnight of the third business day to cancel, but only for sales of consumer goods or services personally solicited away from the seller's regular place of business — $25 or more at your residence, $130 or more at locations like hotels or convention halls. It expressly does not reach real estate, insurance, sales conducted entirely by mail or telephone, or work you asked a seller to perform on property you already own. Individual states add their own cancellation rights for particular contracts, such as gym memberships, timeshares, or home-improvement work, so check whether one fits before concluding either that you are trapped or that you are free.
16 C.F.R. §§ 429.0–429.1 (FTC Cooling-Off Rule) — source
Handshake deals are usually enforceable — until the statute of frauds says otherwise
Oral contracts generally bind; the practical problems are proof and the statute of frauds. Under the Uniform Commercial Code's model text, a contract for the sale of goods for $500 or more is not enforceable without a writing signed by the party being sued, subject to exceptions for goods already delivered and accepted, specially manufactured goods, and admissions made in litigation. Most states have adopted that threshold, but confirm the figure in yours. Separately, nearly every state requires a writing for agreements involving land, promises to answer for someone else's debt, and agreements that cannot be performed within a year. Emails, texts, invoices, and signed change orders often satisfy the writing requirement, which is a good reason to keep them.
U.C.C. § 2-201 (statute of frauds, model text) — source
A number written into a contract is not automatically collectible
Courts throughout the country distinguish an enforceable liquidated-damages clause from an unenforceable penalty. The clause typically survives only if actual damages were genuinely hard to estimate when the parties signed and the stated amount was a reasonable advance forecast of the real harm; a flat charge with no relationship to what the other side actually loses is vulnerable. The party claiming breach also ordinarily has to mitigate — if it can fill the position, resell the goods, or rebook the slot, its recoverable loss drops accordingly. None of that means you can ignore the demand. It means the figure in a demand letter is an opening position, not a judgment.
Forming an LLC does not clean up what already happened
Limited liability runs forward, not backward. Work you performed and debts you incurred before the entity existed stay personally yours, and so does anything you personally guaranteed. Your own conduct is never shielded by the entity either — your workmanship, your representations, your negligence. Commingling personal and business money, operating without an agreement among the owners, and leaving the company with no capital are the facts opponents use to argue the entity should be disregarded entirely. And forming in a "business-friendly" state rarely helps a small operating business: you generally still have to register as a foreign company and pay fees and taxes where you actually do the work, so you end up maintaining two states' filings instead of one.
Read the dispute clause before you take any other step
Many contracts dictate the first move: written notice of the problem, a stated period to cure it, mediation within a specific window, binding arbitration, or suit only in a named county or state. Skipping the required step can cost you attorney fees, get a filed case dismissed or stayed, or in some situations waive the claim outright. Construction and home-improvement disputes add a second layer, because most states have a pre-suit notice-and-opportunity-to-repair statute along with deadlines that run from substantial completion or from discovery of the defect. Document and photograph the condition immediately — physical evidence in these disputes tends to disappear well before the deadline does.
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