Long Beach Maritime, Transportation And Business Law Blog

Are you liable as a freight forwarder for abandoned cargo?

It's a maddening scenario. You file all the paperwork, the product gets loaded up in the shipping containers, onto the vessels, and arrives safely to its destination. Once it's there...the consignee won't sign for it. Could you be held liable for the expenses?

It may all depend on how you booked with the shipping line and the issued bill of lading.

What legal recourse is available for breach of contract?

The issue of terminating contracts for convenience has been detailed on this blog in the past. Yet as has been explained in said details, this is a benefit that is not automatically afforded to every organization or individual. Indeed, unless your contracted partner is a government agency, they can only terminate a contractual agreement with you if they have legitimate cause to do so (unless the right to terminate it for their convenience is afforded to them per the terms of your contract).

This then prompts the question of what legal recourse is available to you if they end your agreement without cause. In such a scenario, you may be entitled to damages due to breach of contract. According to the Judicial Education Center, there may be two types of damages available to you in such an action. The most common is compensatory damages. These are meant to cover the costs (both monetary and in man-hours) that you and your organization incurred up to the point of the contract’s termination. Compensatory damages are also designed to pay you for any expense that accumulates from you having to discontinue your services, which can include the cost of any resources purchased for the execution of the contractual services yet not yet used.

Oregon and California nurseries battle over berries

Business owners and executives in California routinely enter into contracts with other companies and individuals. It seems almost impossible to avoid these types of agreements in today's intertwined and complex marketplace, regardless of the industry in which a particular company operates. Whether a sales contract, a non-disclosure agreement or something else, the fact that these business contracts are so commonplace anymore does not by any means negate the importance of how they are structured.

One company in California that is in the agriculture business knows this quite well, or one would expect that to be the case. The company is a supplier of berries to other nurseries, some of which are located in other states. As explained by Capital Press, the California-based nursery has experienced a string of lawsuits filed against it by some of its customers. At least three different nurseries who agreed to purchase strawberries from the California company have initiated legal action against it.

Legal and investigating issues in dive boat fire

Most people in California have heard, seen or read reports about the recent fire that struck a dive boat off the shore of Southern California. Tragically, 34 people died in the fire as they were reported to have been unable to flee the burning vessel. All of those who died were paying passengers. The only survivors were the five crewmembers. The fire erupted in the middle of the night when everyone, including the crew, was asleep. The incident is raising many questions about the liability for the fire and the cause of the fire.

As reported by Fox News, a mere three days after the fatal fire, the company that owned the boat filed a lawsuit under the provisions of an 1851 maritime law that would limit any liability on the part of the company for the fire.

What determines the liability of a vessel owner?

Earlier this month, a tragedy unfolded on a California diving boat known as the Conception, as a fire broke out on the ship and killed 34 people on board. The owners of the ship wasted no time making legal preparations as they filed a petition less than a week after the incident to eliminate their financial liability in the fire. They’ve been heavily criticized for attempting to limit the legal options that the victims’ families have so soon after the fire.

The ship’s owners are primarily relying on the Limitation of Liability Act of 1851 to avoid paying millions of dollars in damages. It’s been relied on for vessel owners for centuries for accidents smaller and larger than the Conception’s. However, there are a few exceptions within the law that could determine if the boat owners are guilty or not. It is important for maritime workers to familiarize themselves with the law so they know if they can or cannot rely on it after a major incident.

When do I need an NDA?

If you are a business owner in California or are in a management position in a company, there may be situations in which you will need to share some sensitive information with another party in order to move your business forward. It can be hard for companies to feel that the only way they can really get work done or advance their positions is to hand out confidential information but that is the reality at times. This is when it is important to have a nondisclosure agreement in place.

As explained by Forbes, an NDA or a confidentiality agreement, provides you with some protection when you must disclose facts that you do not want to be made public or distributed beyond the party with whom you are sharing it with. One use of nondisclosure agreements might be with your own employees as it is natural for some people to have access to information you don't want available to your competitors but the employees need it in order to do their jobs.

Comparing S and C Corporations

For entrepreneurs who are setting up new businesses in California, one decision they must make is what type of management structure they wish to use. There are a variety of options from sole proprietorships to corporations. When it comes to a corporation, there are two forms that must be reviewed: the traditional C corporation and the S corporation. 

As explained by the Houston Chronicle, C corporations offer greater flexibility in some key areas. For starters, only individuals are allowed to invest in S corporations, not other businesses. Investors of these corporations must also be either U.S. citizens or permanent residents of the U.S. Businesses who are interested in seeking foreign investors will not wish to create an S corporation. Only one type of stock is able to be offered with an S corporation and the shareholders are limited to a maximum of 100.

Reviewing Jones Act waivers

Working professionals in any industry take comfort in the knowledge that workers’ compensation laws are in place to provide for them when they are injured at work, and you as a maritime worker are no exception. The protections afforded to you and your co-workers through the Jones Act may be well-known; what you may not know is that ships can actually request that the Jones Act be waived in their regard. A common question we field here at Russell Mirkovich & Morrow is whether or not the employee protections afforded by the Jones Act are also suspended when a vessel is granted a waiver. 

It is important to remember that the Jones Act is actually part of a larger piece of federal legislation known as the Merchant Marine Act. This Act was passed in 1920 with the purpose of forming a strong merchant fleet in order to support the country’s national security. A major element of this Act was the requirement that ships that make berth in domestic ports be constructed by American manufacturers (using local materials) and operated by American crews.

How can I ensure a successful startup?

Many people dream of being business owners. While fulfilling, starting your own business is a full-time job, and you'll be responsible for all necessary actions to ensure your startup has the best chance of success. Forbes offers the following tips to small business owners so they can have the information they need to push forward with their vision. 

Intellectual property is at the heart of every successful business. Your proprietary ideas and concepts give fuel to operations, and if a competitor is able to access these ideas it could spell ruination to your business. This is why it's so important to protect intellectual property, which can be accomplished by implementing contracts. For example, non-disclosure agreements (NDAs) prevent others from talking about business concepts. You should establish NDAs business associates, partners, and employees. 

Congress mulls strengthening maritime law

In late June, the U.S. House Transportation & Infrastructure Committee approved Coast Guard’s proposed changes to strengthen the Jones Act and now the House of Representatives will consider approving these upgrades too. If passed, these Jones Act changes could impact the offshore oil and gas industry, and even burgeoning offshore wind farm development.

The Jones Act regulates maritime commerce in the United States.

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