Michigan Business Lawyer Blog

Savvy marketers know that direct mail can be one of the most effective forms of business advertising. In this digital age, email marketing can produce many of the same marketing benefits as traditional paper direct mail. However, there are legal requirements for commercial email marketing that must be strictly observed. The primary law in this area is the federal Controlling the Assault of Non-Solicited Pornography and Marketing Act of 2003 (CAN-SPAM Act).

The CAN-SPAM Act imposes requirements on the activities of commercial emailers and provides certain penalties for spammers and businesses that advertise their products in spam emails if they violate the law. The Act also provides consumers with the legal right to ask commercial emailers to stop sending them spam email messages.

CAN-SPAM targets email messages that have the primary purpose of advertising or promoting a commercial product or service. This can include website content in addition to "traditional" products and services. CAN-SPAM has the specific following requirements for commercial email marketing messages:

1. Header information cannot be false or misleading.

2. The message cannot contain deceptive subject lines.

3. The email recipient must be given a option to opt out of receiving future messages.

4. The message must be identified as an advertisement and include a valid physical postal address for the sender.

It is important to remember that email recipients do not have to give their permission to be contacted by a commercial email (at least initially). As noted above, CAN-SPAM is an opt out statute, not an opt in statute. In addition, there are some exceptions in the CAN-SPAM act for "transactional or relationship" messages. These types of emails facilitate an agreed-upon transaction or update a customer in an existing business relationship. However, even these types of messages cannot contain false or misleading routing information.

The CAN-SPAM Act can be enforced by the Federal Trade Commission. CAN-SPAM also gives the Department of Justice authority to enforce criminal sanctions for violations of the statute. A number of other state and federal agencies can enforce the Act against organizations under their jurisdiction, and Internet access providers may also sue violators.

If you are considering adding email marketing to your business outreach activities, you should consult with a Michigan business attorney who has understanding and experience with these unique issues.

Posted by Michael J. Hamblin | Permalink | Email This Post

Posted In: General Topics , Technology & Law

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In the hustle and bustle of business, sometimes promises are made that don't necessarily rise to the level of an enforceable contract. Sometimes those broken promises can cost a business or entrepreneur plenty. Many businesses and entrepreneurs assume that if a promise or agreement isn't in writing, it can't be enforced. While that is true in many cases, sometimes those promises can be enforced.

For example, in certain cases, Michigan courts will employ the legal doctrine of "promissory estoppel" to enforce promises that don't rise to the level of a contract. The relief granted under this doctrine is usually limited in scope and applies only to someone who has reasonably and foreseeably relied on the promise to his or her detriment.

In order to recover under the doctrine of promissory estoppel, four requirements must be met:

1. Someone must make a promise.

2. Someone else must genuinely and justifiably rely on the promise.

3. The actions that are taken in reliance on the promise must be reasonably foreseeable to the person who makes the promise.

4. Injustice will occur if the promise isn't enforced.

If the court determines that these four requirements have been met, it can require the person who made the promise to pay certain damages to the person who relied on the promise.

Convincing a court to enforce a non-contractual promise can be tricky business. Any Michigan business or entrepreneur who believes they may have a claim based on a promise should consult with a knowledgeable Michigan business litigation lawyer to review their rights.

Posted by Michael J. Hamblin | Permalink | Email This Post

Posted In: Contracts , Litigation

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As noted in my last post, doing business on the Internet can be a double-edged sword for Michigan businesses. While the the Internet may provide tremendous business opportunities, in certain cases, such activity might be enough to cause a business to be subject to the legal jurisdiction of a foreign country.

For example, the European Commission's Regulation on Jurisdiction and Enforcement of Judgments in Civil and Commercial Matters could be used by a foreign plaintiff to sue a Michigan business in a member foreign country. This regulation provides jurisdiction against a defendant if the defendant "pursues commercial or professional activities in the Member State of the consumer's domicile or, by any means, directs such activities to that Member State." This language means that someone in a foreign jurisdiction might be able to bring a case in that foreign jurisdiction relative to a contract that was entered into over the Internet. The language is broad enough that even merely advertising a product on the Internet could subject a business to the jurisdiction of a foreign country if the legal claim is related to the advertised product.

Such broad jurisdiction would not be entirely without precedent. In 2002, the High Court of Australia issued a decision holding that a defamation claim against the Wall Street Journal could be litigated in Australia based on the Wall Street Journal's operation of a website that was accessible in Australia.

There are a number of international organizations that are working to implement uniform standards and rules for governing e-commerce and the legal issues arising from such activity. These organizations include the Organisation for Economic Cooperation and Development, the United Nations Commission on International Trade Law (UNCITRAL), as well as the Hague Conference on Private International Law. However, these things take time, and there is no way of knowing when, if ever, these initiatives will be finalized and implemented.

The issue of Internet jurisdiction over Michigan businesses can be very confusing and difficult. A Michigan business lawyer with experience in Internet issues should be consulted on any legal questions or issues that may arise relative to a business's Internet activities.

Posted by Michael J. Hamblin | Permalink | Email This Post

Posted In: Litigation , Technology & Law

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Many Michigan businesses have an Internet presence. For these businesses, the Internet provides an unprecedented and potentially unlimited opportunity to market their goods and services to possible customers all over the country and even the world. But, this can also be a double-edged sword. There are a whole host of complexities that are introduced when businesses conduct relationships and sales with far away customers over the Internet. Many of these complexities can be explored on the very interesting and informative website of the World Intellectual Property Forum.

One of these complexities is determining which state's court system has jurisdiction over a dispute between parties who are located in different states, and whose relationship was formed over the Internet. Generally speaking, a court of one state cannot require a defendant from another state to submit to its jurisdiction unless certain requirements are met. Although each state's particular version of these requirements vary, the landmark case on this issue in the Federal court system is United States Supreme Court case of International Shoe Co. v. Washington.

Under the International Shoe case, a defendant is subject to a state's jurisdiction if he/she (1) has agreed to submit to that state's jurisdiction; or (2) has sufficient minimum contacts with the state "such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice." Basically, that means that the defendant has committed some act or undertaken some transaction in the state or has purposefully availed himself/herself of the privileges of conducting business in that state.

What does all of this mean for companies conducting business over the Internet? Well, American courts have by and large ruled that simply because someone has a website that is accessible in a particular state does not necessary subject that person to the legal jurisdiction of that state's courts. But, if a business intentionally and repeatedly uses the Internet to conduct business in another state, even if it has no physical presence in that state, such activity might be enough to cause that business to be subject to the legal jurisdiction of that state.

If that weren't bad enough, these issues become even more thorny if an American company uses the Internet to conduct business in a foreign country. In my next post, I'll discuss some of those issues.

Posted by Michael J. Hamblin | Permalink | Email This Post

Posted In: Litigation , Technology & Law

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At one time or another, most businesses have to get a loan. Many times, a lender will require a business's key individuals - such as owners and officers - to personally guarantee repayment of the loan. Giving a personal guaranty should not be taken lightly. Doing so exposes the guarantor to the possible loss of their personal assets to the creditor's claims if the company does not pay the debt.

Basically, a personal guaranty provides the lender with the right to make a claim directly against the guarantor, whether or not the lender sues the company. The lender can sue the guarantor even if the company goes into bankruptcy. Although bankruptcy may provide certain protections to the company, these kinds of protections may not be available to personal guarantors.

Often times, entrepreneurs may feel like they have no choice but to go along with the terms demanded by a lender, including giving personal guaranties. But, given the profound effects giving a personal guaranty can have on an entrepreneur's personal finances, a Michigan business person should always obtain sound legal advice and counsel from an experienced Michigan business attorney before giving a personal guaranty.

Posted by Michael J. Hamblin | Permalink | Email This Post

Posted In: Financing

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