More and more start-up businesses are seeking funding on websites such as Kickstarter or Indiegogo, promising small rewards to individual investors in return for micro-contributions.

These include the Veronica Mars movie, which raised millions of dollars by promising small contributors posters, DVDs and movie scripts, and a space telescope project that offered “space selfies.”

But keep in mind that these promises are a legal obligation – so if you end up getting hundreds or even thousands of contributors by offering small rewards, you’ll have to follow through on each one of them. [Read more…]

Companies cannot require workers to receive payment of their wages via “payroll cards,” according to the federal Consumer Financial Protection Bureau.

Payroll cards have become popular recently, especially in the retail and food service industries. But under federal law, a company can’t make the cards the exclusive way it offers to pay wages.

State laws may impose further restrictions on the cards. [Read more…]

If you sign a licensing agreement to sell someone else’s products, but that person already has an exclusive license with a third party to sell the same products, you could be legally on the hook.

That’s a lesson that J.C. Penney learned the hard way, after it signed an agreement with Martha Stewart to sell a variety of her housewares in special dedicated sections of its stores.

The problem was that Martha Stewart had previously signed an exclusive licensing agreement with Macy’s covering sales of her kitchen, bed and bath products. So while J.C. Penney could legally sell other Martha products such as window treatments, rugs and lighting, sales of the kitchen and bath products violated the agreement. [Read more…]

A car dealership couldn’t be held liable in court for a salesman who sexually assaulted a customer, according to the Texas Court of Appeals.

The customer had brought her car in for service and was waiting for a shuttle bus to take her home. The salesman offered to drive her home in his personal car, and she claimed that along the way, he made improper advances. The dealership immediately fired the salesman.

The customer sued the dealership, but the court said the dealership had done nothing wrong.

The dealership hadn’t been negligent in hiring the salesman, it said, because it wasn’t aware of any indication that he might do something like this. Although there was some suggestion that he might have engaged in misconduct in the past, there was no evidence that he had ever engaged in sexual misconduct. [Read more…]

If you lease a store or other business and someone trips and falls outside the building, are you legally responsible?

That often depends on what’s in your lease – so this is something you may want to think carefully about when you negotiate.

This issue came up recently when a woman named Sabena Beriy fell on what she claimed was a poorly maintained curb outside a P.F. Chang’s China Bistro restaurant. P.F. Chang’s had leased the property from a landlord as part of a larger development. The lease said that P.F. Chang’s was responsible for any injuries on its “premises,” and that the landlord was responsible for any injuries that occurred outside of those premises.

P.F. Chang’s claimed that Sabena’s fall occurred in the common area of the development, not in its restaurant. It also claimed that the landlord was responsible under the lease for designing and maintaining the parking areas, driveways and curbs. [Read more…]

You can’t obtain a patent for taking some ordinary process in the real world and coming up with a computer program that makes it easier, according to the U.S. Supreme Court.

The decision is important because many companies have been trying to patent their apps and other programs to keep competitors from taking their business away.

In the Supreme Court case, a company called the Alice Corporation tried to patent an online system to reduce risk in financial transactions. Alice’s program was little different from a third-party clearinghouse or escrow service, except that it all happened automatically online. [Read more…]

If you’re using social media to market your business, that’s terrific – but you should be aware that the same legal rules that apply in the “real world” also apply to Twitter, Facebook, Pinterest and other venues.

Many companies have rushed into social media marketing plans without considering the legal issues. Here’s a quick look at some of the problems that can result:

Improper endorsements. Many social media campaigns solicit endorsements, testimonials and favorable reviews from consumers, and then promote them. That’s fine – but keep in mind that if you offer anything in return for such endorsements, you may have to disclose this fact. [Read more…]