Is Your "E-Signature" Valid?

The prevalence of "I accept” check boxes on online contracts may have some people wondering whether one click of the mouse is as effective as signing your John Hancock?  The answer, for the most part, is yes.  “E-signatures” can be just as binding as real signatures. But like all legal matters, the validity of e-signatures is not always black and white.

It's Time for Real Property Law to Join the 21st Century

A farmer uses GPS to plant this field,
but his deed uses old metes and
bounds to describe it.  

I handle a number real estate transactions each year.  It is not uncommon to find an error in the property description located in a deed.  Often somewhere in the chain of title, someone made a typo which was then passed on from deed to deed to deed.  Attorneys call such mistakes "scrivener's errors."   These errors still occur today because the way property is described in deeds and other real estate documents has not changed much in past two centuries. Witnessing how much technology has improved farming in the past decade has made me wonder--why isn't the same technology being used to improve how we describe property boundaries?

What You May Be Giving Up When You Agree to "Arbitration"

Grain contracts often
contain arbitration clauses

Although most people are unfamiliar with the arbitration process, it is common for many form contracts to contain "arbitration" clauses. The Texas Supreme Court recently addressed cotton farmers’ challenge to an arbitration clause in a cotton marketing contract.  The Texas court upheld the arbitration clause but questioned whether a one-sided attorneys’ fees provision favoring the marketer was unconscionable. (Read Texas ag blogger Tiffany Dowell's good summary here).  Having not read the boilerplate common in many contacts, people are often surprised to learn they have consented to arbitration.  The recent Texas case reminded me of my own experiences with arbitration clauses and what four rights clients give up when they agree to arbitrate:

Reduce Farm Liability: Set Up a New Company for Your Custom Farming Operation

Farm Journal's Sara Schafer recently consulted me for an article she wrote on how to "Reduce Liability" for the farm. Her article discusses the need to create new legal companies to handle certain farm operations that fall outside of normal farm-work, such as custom farming or trucking.  Her article appeared in Top Producer and AgWeb, Farm Journal's online publication:

Custom farm work is a great way to diversify a business. It can provide supplemental income but can also add extra risk and exposure to your primary farm.

Contract Law 201: When to hire an attorney

Law school training and real-world legal experience can pay dividends in complex contract drafting and negotiation.  In my previous post, I explained the contract basics every business person should understand.  In this post, I provide some examples of when you should not go it alone, but instead pick up the phone and call an attorney for help.

1. Should the contract be in writing?  Some contracts are unenforceable unless they are in writing.  Nearly every state has a "statute of frauds" that requires a contract to be in writing if certain factors are present.  An attorney knows or can research these factors.  In Indiana, for example, no contract for the sale of land is valid unless it is written out and signed by the seller.  I.C. 32-21-1-1.  The same is true of a lease greater than three years or deed conveying land.  No writing, no signature, no contract.

Contract Law 101: What every business person should know

You don't have to go to law school to learn how to create a contract. But there are some things every ag professional should know about contract drafting. A contract only needs three things to be enforceable: an offer, acceptance, and consideration. These are the basics every law student learns in their first semester:

1. Offer. Formation of a contract begins with an offer. One person offers to do something in exchange for something else. Offers are “revocable” until such time that they are accepted or changed. But you cannot revoke an offer after it has already been accepted. That’s why it’s always good to put a time-frame on how long an offer remains open. You also want to be sure an offer is clearly communicated, whether verbally or in writing.

The LLC - The Infinitely Variable Company

Growing up, tractors had gears.  The older the tractor, the fewer the gears.  Throughout my childhood, tractors moved from 4 to 8 to 16 gears.  Now, nearly every manufacturer offers an "infinitely variable" transmission that no longer restricts an operator to using a specific gear.

Corporate law underwent a similar transformation in the early 1990s with the development of the "limited liability company" or "LLC."  Prior to the passage of the Indiana Business Flexibility Act in 1994, the LLC form of legal entity did not exist in Indiana. The same was true elsewhere. In 1989, only two states had enacted LLC statutes.  Businesses that wanted to protect their owners from personal liability had one option--form a corporation.

Three reasons it's time to incorporate your farm.

I'm surprised how many farmers I meet that own land or buildings in their personal name.  I'm surprised, because my non-farm clients would not even consider starting up a new business or purchasing commercial property in their own personal name.  Farmers shouldn't do it either, for a number of reasons.

Fight Over Tractor Teaches the Lesson of "Mutual Mistake"

Representative photo.

In Tracy v. Morell (Ind. Ct. App. 2011), the Indiana Court of Appeals recently resolved a dispute between a buyer and seller of a tractor using the principle of "mutual mistake."

In 2002, Mr. Morell sold Mr. Tracy a used 2002 Ford New Holland tractor for $12,500.  Tracy signed a promissory note promising to pay Morell $500 down and $500 per month until the note was paid in full.  Tracy paid only $8500 on the note.