Disclaimed warranties and representations: promissory fraud and the right to lie

by James Blake

The Blake Law Firm, PLLC.

James Blake is a growth-oriented business attorney who strives to be a creative business partner, to identify value-add opportunities, and to crystallize the relationships, structures, and processes that will drive your commercial success. James Blake practices law in Texas and Hawaii, and has protected the interests of businesses across a broad range of industries, including technology, construction, service and retail, food and beverage, franchisors and franchisees, product manufacturers, and investors. His work experience encompasses commercial transactions, litigation, and advising business operations in the U.S., Africa, and Asia. James was an editor of Law Review at the University of Hawaii and conducted international commercial law research for the Institute of Asian Pacific Business Law. He served as the Official Reporter for the 2008 IAPBL China Enterprise Bankruptcy Law Symposium held in Hong Kong, and in the same year worked at a large firm in Singapore. James currently advises clients in international business and investment issues in addition serving his client’s legal and business needs in Hawaii and Texas. Currently based in Austin, Texas, James is an avid writer and enjoys speaking at business-law seminars in addition to his legal practice. In his spare time, James enjoys sculling and kayaking on Ladybird Lake, outdoor photography, and supporting visual and performing arts.

What your mom taught you about telling the truth is still good advice. While it may seem to go without saying, at least one judge has reaffirmed your mother’s rule: “it’s not okay to lie,” even if your contract says you don’t have to tell the truth. In Abry Partners V, L.P. v. F&W Acquisition, LLC, the court had to decide whether a very explicit disclaimer of all warranties and representations would be enforced to limit the liability of a company that had knowingly made false representations to induce the sale of the business to another company.

On its face, the disclaimer was very clear – the company that made the false representations had no contractual duty to tell the truth to the acquiring company, and any liability for false statements was limited to a predetermined amount. While the exact wording of the disclaimer may be too long to repeat here, it might as well have said: “Company A may make any false statement or misrepresentation to Company B to induce the sale, and Company B’s only legal remedy shall be capped at XYZ dollars.” This kind of disclaimer was written in two different sections of the sales contract.

Yet writing something in a contract doesn’t necessarily make it so. Judges have broad discretion regarding the enforcement of contract terms. Even though both Company A and Company B were sophisticated businesses with teams of legal professionals to advise this multi-million dollar transaction, the judge in this case held that it would be against public policy to enforce the disclaimer and to protect the company that made false representations.

What’s the moral of this story? Honesty isn’t just the best policy – it’s the law of the land, and no wording in a contract will change that. Further, as a general rule, you can’t rely solely upon the wording of a contract to forecast the outcome of potential legal disputes. Ultimately, courts strive to preserve justice, and a judge may easily override overbearing or unfair contracts.

Topics: Sales, Featured, Business Best Practices, Management, Legal, Articles

Three great ways to free up cash fast

by Philip Campbell

Consultant, Author

Philip Campbell is a CPA, consultant, and author of the book A Quick Start Guide to Financial Forecasting: Discover the Secret to Driving Growth, Profitability, and Cash Flow Higher. This new book provides a straightforward, easy-to-understand guide to one of the most powerful financial tools in business: a reliable financial forecast. He is also the author of the book Never Run Out of Cash: The 10 Cash Flow Rules You Can’t Afford to Ignore. The book is a step-by-step guide for business owners and managers who want to better understand and manage their cash flow. Since 1990, Philip has served as a financial officer in a number of growing companies with revenues ranging from $5,000,000 million to over $1,000,000,000. He has been involved in the acquisition or sale of 33 companies (and counting) as well as an IPO on the New York Stock Exchange. Philip loves helping entrepreneurs and business owners think strategically about the financial side of their business. His consulting work is focused on providing the financial insights that leaders need to increase profits, improve cash flow, and enjoy the fruits of financial success in business. What really sets Philip apart from the average financial person you meet is his passion and excitement about helping entrepreneurs and CEOs take control of their cash flow. In fact, early on in his career, he focused and “preached” so much about the importance of cash flow that people now call him CASH. Philip is the founder of Financial Rhythm, a website devoted to people who are serious about creating financial health, wealth, and freedom in their business. If you're an entrepreneur or business owner, Financial Rhythm is a place to get simple, actionable strategies for creating a financial future that is bigger and brighter than your past. Philip lives in Austin, Texas. You can email Philip at pcampbell@pdq.net.

Making more and more money in your business is what financial success is all about. That’s not greed. That’s just the reality of business. You have to be constantly focused on improving profitability, improving cash flow, and increasing the value of your business.

Topics: Featured, Business Best Practices, Management, Blog Posts, Accounting & Finance

So, you need a consultant…

by Karen McGraw

Cognitive Technologies

Dr. Karen L. McGraw is the founder and CEO of Cognitive Technologies www.cognitive-technologies.com, a consulting firm specializing in projects, collaborative processes, and organizational effectiveness. She also leads the company’s strategic consulting, process, and performance improvement engagements for both commercial and government clients. During her 29 years of business experience, Karen has managed numerous human performance and strategic projects for non-profits, call centers, manufacturing facilities, print production, shipping warehouses, medical facilities, IT, telecommunications, financial, pharmaceutical, sales and civilian government agencies. She has conducted extensive human capital analysis research that demonstrated the positive correlation of strong human capital management with the ability to meet goals ranging from student performance, to production goals, safety goals, and revenue targets. She is a co-developer of Performance DNA, the leading methodology for analyzing human performance, the Performance DNA Desktop (software), the Human Capital Capability Scorecard and the EASE change management methodology. Karen has published 5 books and numerous articles, and has been an adjunct faculty member for the University of Texas, Arlington and the University of Maryland. Karen holds a doctorate and master’s degree from Texas Tech University, and a bachelor’s degree from the University of Houston. She is a member of the Women’s Business Enterprise National Council-Southwest (WBENC), Women Impacting Public Policy (WIPP), and Impact Austin, a women’s philanthropic organization. Karen is on Linked in: Karen McGraw and Twitter: @CogTechInc.

As leaders of small to mid-size businesses, we are wise to focus our energies on our daily operations and what we ‘do best.’ But from time-to-time we may be faced with a situation or need that is outside the scope of our own expertise. Common wisdom suggests that when this happens we should not waste our valuable time researching a highly specialized area that we may need to address only once. Instead, consider bringing in someone who specializes in the particular area of need--a consultant.

Topics: Management, Blog Posts, Strategic Planning, Human Resources

The five things every business owner needs to know every day

by Ron Ratliff

Ron Ratliff CPA

Ron Ratliff was a CPA who practiced accounting in Austin, Texas for many years. He passed away in 2011 and his articles are archived on the Business Resource Center for the long term, so that the business community can continue to benefit from Ron’s expertise.

During a conversation over lunch recently, I was asked to comment on the five things that every business owner needs to know every day. This was in response to my statement that far too many business owners limit themselves to checking their bank balance each morning (without any apparent regard for any un-cleared checks or unrecorded deposits).

Topics: Management, Accounting & Finance

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Where is your business GPS taking you? (Part two of two)

by Ron Ratliff

Ron Ratliff CPA

Ron Ratliff was a CPA who practiced accounting in Austin, Texas for many years. He passed away in 2011 and his articles are archived on the Business Resource Center for the long term, so that the business community can continue to benefit from Ron’s expertise.

In the previous post, I shared why I broke down and purchased a GPS system when I came to Austin.

Topics: Featured, Management, Blog Posts, Accounting & Finance

Where is your business GPS taking you? (part one of two)

by Ron Ratliff

Ron Ratliff CPA

Ron Ratliff was a CPA who practiced accounting in Austin, Texas for many years. He passed away in 2011 and his articles are archived on the Business Resource Center for the long term, so that the business community can continue to benefit from Ron’s expertise.

Part One of Two

Topics: Featured, Management, Blog Posts, Accounting & Finance

Starting and running a small business is a special kind of voyage

by Daniel Diner

Business Success Center

Daniel Diener is the Chief Financial Officer of the Business Success Center (BSC), a City of Austin certified green business. It provides sales and financial strategies and advice to owners of product and service businesses. It received a Small Business Administration (SBA) five-star national award and the Austin Business Journal named it a top 20 management consulting firms. Diener is an NCRC Certified Technical Advisor and a speaker on entrepreneurship and other issues. He is also co-creator of the award-winning “City Management Academy”, the “Owners MBA” and the SBA’s monthly marketing workshop. He owned and ran the Entrepreneurs’ Association and ran a business hatchery and accelerator. Along with partner/wife Jan Triplett, Ph.D., he developed the Business Navigation Matrix that maps the business goals from Idea Stage to Transference. They also are authors of the OnCourse Business Assessment™
, OnCourse Business Glossary & Bibliography and Power Processes for Business Success. He is a small business and neighborhood activist. He was a delegate to the White House Conference on Small Business and has served on several boards, including the Governor’s Small Business Advisory Board, Students Involved in Free Enterprise, and the Allandale Neighborhood Association. He is a member of Central Texas Association of Guaranteed Government Lenders and has been active with traditional and alternative funding sources for many years. He is a QuickBooks and Aclivity software partner. For his successful work with small business, the SBA named him its Financial Services Champion of Texas and the five-state region.

I was out sailing on my boat last week and I start to think about how running a small business is really like a sailing trip. Your business journey isn't over water but over time. Time is your ocean and your business is the boat. You depend on it to keep you safe during the journey and successfully deliver you to your final port of call.

Topics: Featured, Management, Blog Posts

Go beyond brainstorming to solve business problems

by Karen McGraw

Cognitive Technologies

Dr. Karen L. McGraw is the founder and CEO of Cognitive Technologies www.cognitive-technologies.com, a consulting firm specializing in projects, collaborative processes, and organizational effectiveness. She also leads the company’s strategic consulting, process, and performance improvement engagements for both commercial and government clients. During her 29 years of business experience, Karen has managed numerous human performance and strategic projects for non-profits, call centers, manufacturing facilities, print production, shipping warehouses, medical facilities, IT, telecommunications, financial, pharmaceutical, sales and civilian government agencies. She has conducted extensive human capital analysis research that demonstrated the positive correlation of strong human capital management with the ability to meet goals ranging from student performance, to production goals, safety goals, and revenue targets. She is a co-developer of Performance DNA, the leading methodology for analyzing human performance, the Performance DNA Desktop (software), the Human Capital Capability Scorecard and the EASE change management methodology. Karen has published 5 books and numerous articles, and has been an adjunct faculty member for the University of Texas, Arlington and the University of Maryland. Karen holds a doctorate and master’s degree from Texas Tech University, and a bachelor’s degree from the University of Houston. She is a member of the Women’s Business Enterprise National Council-Southwest (WBENC), Women Impacting Public Policy (WIPP), and Impact Austin, a women’s philanthropic organization. Karen is on Linked in: Karen McGraw and Twitter: @CogTechInc.

Business owners solve problems every day—changing a strategy, deciding how to enter a new market, and fixing problems with the launch of a new product. Some of these problems are created by our industry, or competition, or our processes. Some just “happen.” And others – well, if we’re honest, we’ll admit we’ve caused a few of them ourselves.

Topics: Featured, Business Best Practices, Management, Blog Posts, Strategic Planning

When assembling your loan package for a lender accuracy is important

by Leslie Thacker

Business Finance Solutions

Leslie Thacker is the Managing Partner of Austin Texas-based Business Finance Solutions. Leslie has over 20 years of general business experience, including ten years managing the marketing, sales, and projects for financial services including bank lending programs and electronic data interchange programs for small businesses. She has served as a consultant to several banks and a small business investment company (SBIC). Her role in Business Finance Solutions includes assisting small and mid-sized businesses obtain working capital financing, equipment leasing, and leveraging other assets for working capital. Before entering the financial industry, Leslie was the publisher of a business trade publication in Corpus Christi. She also has an extensive background in inventory control and merchandising. Leslie is passionate about helping business owners, managers, CFOs, and operations personnel obtain valuable practical business training. In March 2009 she started a highly successful Austin based Meetup group. Each month she has arranged a respected speaker to present a finance or operations topic of interest to the group. There are now approximately 180 members of the group. Leslie also volunteers time at the Texas State Small Business Development Center, assisting with educational programs and the center’s marketing program. When not helping businesses find financing and practical educational resources, Leslie spends time in her garden growing antique roses.

There was a time in banking when a business customer could walk into his banker’s office and simply say he needed a loan to purchase a new piece of equipment. For most borrowers, those days are gone. Certainly once a business has an established relationship with their bank it is much easier, but some documents are still going to have to be filled out or updated.

Topics: Featured, Management, Blog Posts, Accounting & Finance

Software as a service (SaaS); what exactly is it and how will it benefit my organization?

by Jos de Laat

DL Associates

Jos de Laat has throughout his career used the knowledge gained from his Master’s in Business Economics and his Master’s in Information Systems and Technology to help companies define and streamline business processes and automate them using state of the art technologies. With his extensive experience in finance, operations, sales, service and consulting he enjoys working with entrepreneurs and executive to focus on core business issues and in a collaborative approach design creative solutions that result in significant improvements in both top and bottom line. After many years in executive position in large, small and startup organizations Mr. de Laat has started his own consulting company, DL Associates. In this role he now provides business consultancy services with a focus on business process design and automation but when clients requests helps with other business related challenges like business planning, budgeting, system selection or interim management. In previous positions Mr. de Laat had the pleasure of working in over 40 different countries and as such he is also a great resource for organizations that are operating or want to operate outside of the US.

Frequently my clients and prospects ask me this question as they don’t fully understand SaaS or how it can fit their business needs. Let’s first start with the question what constitutes Software as a Service. Instead of investing significant funds in software, hardware and the installation of the software on the new hardware, an organization can enter into a contract with a service provider and typically pay a modest fee per user per month for the usage of the software solution which you will access over the internet. The service provider will maintain the system and keep in up and running so you will not need your own IT staff to maintain this system. The SaaS movement started initially in the Customer Relationship Management space with SalesForce.com but in recent years other vendors have joined. Besides CRM solutions you can now also get your email system, document management, phone system, accounting, ERP and various other systems delivered in the SaaS model.

Topics: Sales, Technology, Management, Blog Posts, Accounting & Finance

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