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Tag Archives: limitation of liability

7 Key Clauses to Include in a Terms and Conditions Agreement

Author By Todd McMurtryPosted on

As recently as 2018, just half of the country’s small businesses had a website. But today, in the aftermath of pandemic-era lockdowns and closures of physical plants, around 95 percent of small businesses have some form of online identity. The internet offers powerful tools to present your products, generate revenue and provide customer service. However, taking full advantage of an internet presence requires devising new ways to deal with the public, including adoption of a terms and conditions agreement.

Also known as terms of service (TOS), a terms and conditions agreement outlines the rules governing your website or app and defines the relationship between you and your users, who implicitly agree to the terms and conditions.

The TOS should be crafted to fit the types of merchandise and services that your business offers, but certain provisions are generally advisable. Here are seven clauses that you should consider having:

  • Limitation of liability — You can include disclaimers designed to protect your business from being held liable for certain losses suffered by users, such as data loss, malware infections and other mishaps outside your control. You can also state a maximum amount of damages for which your company can be held liable.
  • User code of conduct — Any site or app that allows users to post content, such as reviews or comments, should have a code of conduct. It should also state the consequences of posting unacceptable content, such as account suspension or termination. The code can explain that you have the right, but not the obligation, to remove offensive user posts.
  • Governing law clause — This tells users that if they file a legal claim against you, it will be governed by the laws of the state you specify.
  • Intellectual property clause — This prohibits the use or distribution of your company’s name, logo, domain name, trademarks or copyrights without your permission.
  • Payment and refund procedures — The TOS should clearly explain the payment methods you accept, the consequences of non-payment and your policy for issuing or refusing to issue refunds.
  • Termination clause —This reserves your right to delete a user’s account if they violate the terms of service.
  • Cookie usage — The TOS should explain how your site or app uses cookies to track users and to provide them with relevant information. It should also explain users’ rights to limit or prevent use of cookies.

There may be other clauses you’ll want to include, such as one setting out a procedure for conflict resolution. A qualified business attorney can analyze your situation and draft a TOS that is best suited to your needs and objectives.

About Finney Law Firm, LLC

Founded in 2014, FLF has grown to 15 attorneys located in offices in Eastgate and downtown Cincinnati with five major practice areas: Corporate Law, Real Estate Law, Employment Law, Commercial Litigation and Public Interest and Constitutional Litigation.  FLF has the unique claim to three 9-0 victories at the United States Supreme Court for its public interest practice along with breakthrough class action work.

FLF also has an affiliated title insurance company, Ivy Pointe Title, LLC, that closes and insures nearly a thousand commercial and residential real estate transactions annually.

For more information about Finney Law Firm, visit finneylawfirm.com.

Media Contact: Mickey McClanahan; mickey@finneylawfirm.isoc.net; 513.797.2850.

Determining Company Value During a Business Divorce

Author By Todd McMurtryPosted on

Dividing property is one of the most important and potentially contentious aspects of business partners falling out and going their separate ways. A business divorce requires that the company be fairly valued so that all or part of it can be sold, whether to insiders or to outside buyers.

A business valuation analyzes all areas of the company to determine the worth of its various departments and of the entity as a whole. Professional evaluators look at such as elements as the company’s capital structure, its management, the market value of its assets and its future earnings potential.

There are numerous ways to value a company during business divorces. Some of the most common methods are:

  • Market capitalization — The value of a public company typically is calculated by multiplying the company’s share price by the number of shares outstanding. If the price is $50 and there are one million shares outstanding, the company’s value is $50 million.
  • Times revenue — A multiplier is applied to the revenue the company has generated over a certain time period. The multiplier varies by industry. A tech company might be valued at 5x revenue while a service company might be valued at 1x revenue.
  • Earnings multiplier —The company’s price-to-earnings ratio is adjusted to account for current interest rates. This is often more accurate than the times revenue method because the earnings multiplier is based on profits.
  • Discounted cash flow — This is similar to the earnings multiplier method, except that the company’s cash flow is calculated taking inflation and other market risks into account.
  • Book value — This is the company’s total assets minus its total liabilities as shown on its balance sheet.
  • Discretionary earnings — This method, often used for valuing small businesses, takes gross earnings and adjusts them for depreciation, interest expense and non-operating and non-recurring income.

When business owners are engaged in a split up, it is to be expected that the choice of valuation method will be a point of contention. Different owners will likely choose their own evaluators, with each employing a different method. If the owners can’t agree on a selling price, some form of alternative dispute resolution, such as mediation, may be used to arrive at a settlement.

About Finney Law Firm, LLC

Founded in 2014, FLF has grown to 15 attorneys located in offices in Eastgate and downtown Cincinnati with five major practice areas: Corporate Law, Real Estate Law, Employment Law, Commercial Litigation and Public Interest and Constitutional Litigation.  FLF has the unique claim to three 9-0 victories at the United States Supreme Court for its public interest practice along with breakthrough class action work.

FLF also has an affiliated title insurance company, Ivy Pointe Title, LLC, that closes and insures nearly a thousand commercial and residential real estate transactions annually.

For more information about Finney Law Firm, visit finneylawfirm.com.

Media Contact: Mickey McClanahan; mickey@finneylawfirm.isoc.net; 513.797.2850.