Scott Delius
Graco has issued a massive recall of 1.2 million of its Harmony™ High Chairs, the U.S. Consumer Product Safety Commission (CPSC) just announced.
The recalled Harmony™ High Chairs were manufactured in the United States by Graco Children’s Products Inc., of Atlanta, Georgia and are being recalled due to fall hazard. The screws holding the front legs of the high chair can loosen and fall out and/or the plastic bracket on the rear legs can crack, causing the high chair to become unstable and tip over unexpectedly. This poses a fall hazard to children.
To date, Graco has received 464 reports of screws loosening/falling out and/or plastic brackets cracking causing the high chair to tip over unexpectedly. These tipovers have resulted in 24 reports of injuries including bumps and bruises to the head; a hairline fracture to the arm; and cuts, bumps, bruises, and scratches to the body.
This recall involves all Harmony™ High Chairs. The Harmony™ high chair was manufactured from November 2003 through December 2009 and is no longer in production. The model number can be found on the label that is located on the underside of the footrest. A complete list of the models affected by this recall can be accessed here.
The recalled The recalled Harmony™ High Chairs were sold at AAFES, Burlington Coat Factory, Babies “R” Us, Toys “R” Us, Sears, Target, Target.com, Walmart, WalMart.com, Shopko, USA Baby, and other retailers nationwide from December 2003 through March 2010 for between $70 and $120.
The CPSC is advising consumers to immediately stop using the Harmony™ high chair and contact Graco to receive a free repair kit. Graco can be reached toll-free at 1-877-842-3206 or at the firm’s Web site at www.gracobaby.com. For additional information, Graco can also be reached toll-free at 1-800-345-4109 between 8:00 a.m. and 5:00 p.m., Eastern Time, Monday through Friday.
4/11/2010
Should You Refinance Your Adjustable Rate Mortgage In a Stabilizing Market?
Doron F. Eghbali
Millions of mortgage borrowers experienced intolerable hardship because of having adjustable rate mortgages. Now, again the specter of similar tragedy is somewhat looming. Given the Federal Reserve out of the mortgage market and a relatively stabilizing real estate market, the chances are rates eventually increase. The question is whether homeowners should refinance their adjustable rates to relatively higher fixed rates.
SOME BACKGROUND
1. Direct Correlation Between Federal Funds Rate and Adjustable Rate Mortgages
Adjustable rate mortgages are tied to short-term interest rates and rise when the Federal Reserve increase federal funds rate. Federal funds rate is the rate banks charge each other for overnight loans. The Federal Reserve decreases or increases federal funds to keep in check the amount of money being lent thus curbing inflation or stimulating economic activity. The financial markets are betting the Federal Reserve will raise Federal Funds Rate by the end of this year. However, How much those rates will increase is uncertain.
2. Withdrawal of Federal Reserve from Purchase of Mortgage-Backed Securities
In addition, the Federal Reserve during the recent financial crisis was very concerned about the health of real estate market. As such, it undertook to purchase mortgage backed securities from Fannie Mae and Freddie Mac. The mortgage backed securities contain huge bunches of home mortgages. Since Fannie Mae and Freddie Mac guarantee most home loans in the US and the decreasing value of homes were threatening the value of the mortgage backed securities with decreasing, defaulting or foreclosing home mortgages, the Federal Reserve bought some of these mortgage backed securities to increase demand and thus lowering the interest rates. The Federal Reserve ended this program. Now, despite assurances from the Federal Reserve, many economists fear such move would increase mortgage rates since demand decreases.
ADJUSTABLE RATE MORTGAGES REFINANCING
In analyzing whether you should refinance to fixed rate mortgage, probably, the most important barometers are:
How Long You Intend to Live in Your House; And
How Much Interest Rates Will Rise.
Analysis
The reality is that if the Federal Reserve raises rates by two percentage points, it would bring adjustable rate mortgages into parity with fixed rates. However, while boosting federal funds rate increases short-term interest rates, such boost would also raise fixed rates. As such, the question is whether you want to pay more now and guaranty your rate for years to come or want to take the risk that the rates will not rise sharply to cause seriously paralyzing financial pain. Hence, it becomes imperative to prudently deliberate over the duration of your stay at your current home and decide whether refinancing to fixed rate is prudent for your long-term financial health.
Millions of mortgage borrowers experienced intolerable hardship because of having adjustable rate mortgages. Now, again the specter of similar tragedy is somewhat looming. Given the Federal Reserve out of the mortgage market and a relatively stabilizing real estate market, the chances are rates eventually increase. The question is whether homeowners should refinance their adjustable rates to relatively higher fixed rates.
SOME BACKGROUND
1. Direct Correlation Between Federal Funds Rate and Adjustable Rate Mortgages
Adjustable rate mortgages are tied to short-term interest rates and rise when the Federal Reserve increase federal funds rate. Federal funds rate is the rate banks charge each other for overnight loans. The Federal Reserve decreases or increases federal funds to keep in check the amount of money being lent thus curbing inflation or stimulating economic activity. The financial markets are betting the Federal Reserve will raise Federal Funds Rate by the end of this year. However, How much those rates will increase is uncertain.
2. Withdrawal of Federal Reserve from Purchase of Mortgage-Backed Securities
In addition, the Federal Reserve during the recent financial crisis was very concerned about the health of real estate market. As such, it undertook to purchase mortgage backed securities from Fannie Mae and Freddie Mac. The mortgage backed securities contain huge bunches of home mortgages. Since Fannie Mae and Freddie Mac guarantee most home loans in the US and the decreasing value of homes were threatening the value of the mortgage backed securities with decreasing, defaulting or foreclosing home mortgages, the Federal Reserve bought some of these mortgage backed securities to increase demand and thus lowering the interest rates. The Federal Reserve ended this program. Now, despite assurances from the Federal Reserve, many economists fear such move would increase mortgage rates since demand decreases.
ADJUSTABLE RATE MORTGAGES REFINANCING
In analyzing whether you should refinance to fixed rate mortgage, probably, the most important barometers are:
How Long You Intend to Live in Your House; And
How Much Interest Rates Will Rise.
Analysis
The reality is that if the Federal Reserve raises rates by two percentage points, it would bring adjustable rate mortgages into parity with fixed rates. However, while boosting federal funds rate increases short-term interest rates, such boost would also raise fixed rates. As such, the question is whether you want to pay more now and guaranty your rate for years to come or want to take the risk that the rates will not rise sharply to cause seriously paralyzing financial pain. Hence, it becomes imperative to prudently deliberate over the duration of your stay at your current home and decide whether refinancing to fixed rate is prudent for your long-term financial health.
Limited Liability Company
Lawyers.comsm
There are a lot of different entities, or forms, that you can use to create a new business. One very popular business entity is the limited liability company or "LLC," which is a business form that combines some of the features of a partnership and a corporation.
Because there are some big advantages for using the LLC form of business, it has become the favored choice for persons looking to start a new business (and particularly a small business). But, there are some disadvantages to the LLC form, as well, which need to be considered before making a final decision of the form of your business.
Things such as how to form an LLC and how it is to be run or operated are controlled entirely by state law, and the laws, of course, vary from state to state. So, it's very important that you understand the laws in your area concerning LLCs, or get some help from an experienced business law attorney, before you decide to form an LLC.
What's an LLC?
An LLC is a combination of a partnership and a corporation. The owners of an LLC, called "members," get many of the same tax benefits as partners in a partnership and enjoy the limited liability benefits of a corporation.
Typically, unless the members choose otherwise, an LLC is taxed almost exactly the same way that partnerships or sole proprietorships are taxed. Profits and losses are "passed through" to the members of the LLC, and there is no income tax at the business level, or "double taxation."
That is, with a corporation, there is a tax on the corporation's net income, and then the corporation's shareholders (or stockholders) must pay individual income taxes on any dividends they receive from the corporation. With an LLC, on the other hand, the profits "pass through" to the members, and they pay income taxes at their individual tax rates.
Choosing the LLC form can bring you some significant tax disadvantages, however. For example, the profits you receive from the LLC most likely will be subject to self-employment taxes, which are designed to cover the Social Security and Medicare taxes that most employees have withheld from their paychecks.
Like a corporation, the members of an LLC are generally shielded from personal liability for the LLC's debts and obligations. This is perhaps the biggest reason why the LLC business form is so popular. So, for example, if the LLC takes out a business loan and is later unable to repay it, the creditor can't sue the individual members to recover payment on the loan.
There are some important exceptions to this rule, however. Most state laws do not shield members from personal liability on a debt or liability owed by the LLC when, for example:
The member personally guarantees the repayment of a debt
The members use the LLC to commit fraud
A member is negligent in appointing or supervising a manager, employee, agent or other member of the LLC with respect to some action that causes harm or damages to a third party
Forming, Managing and Closing an LLC
You form an LLC by filing a form with the secretary of state for the state in which the LLC will be located. The form is called a "certificate of formation" or "articles of organization," or some similar name. The state laws vary significantly on what information must be contained in the articles, but usually you must give at least the LLC's name, address, and the name of its "registered agent," that is, the person who is responsible for accepting important documents, such as legal and tax documents, on behalf of the LLC.
Most of the rules that govern how the LLC will be run are contained in the members' private operating agreement, which is similar to a partnership agreement or corporate by-laws. Unless the operating agreement provides otherwise, all of the members are responsible for managing the LLC, but they can choose to delegate their management authority to a particular member or group of members, or, in some cases, to a non-member manager.
Generally, unlike most corporations, LLCs may have an unlimited number of owners, and there are no restrictions on the type of persons who may be owners. Some states, however, require that an LLC have at least two owners.
Usually, fundamental changes within the business require the unanimous approval of the members. So, all members must consent to the admission of new members, for example. The operating agreement will often contain a provision on how and to whom one member can sell his or her share in the LLC to a third party. Very often, the agreement states that members must first offer their share to the other members, or the other members must consent to the sale.
Upon any member's death, retirement, resignation, expulsion, bankruptcy or dissolution, the LLC is usually dissolved unless the remaining members agree to continue the LLC. Of course, the members can voluntarily choose to close or "cancel" the LLC at any time and for any reason, but the process can be complex, depending on the laws of the state where the LLC is located.
Questions for Your Attorney
I'm in a two-person LLC. I personally guaranteed a loan to the LLC after my co-member agreed to help repay it. That agreement is not in writing, and he recently died. Am I liable for the loan?
One of the members of our LLC wants to sell his share to someone, but some of us don't want the sale to go through. Can we stop it?
What's the difference between an LLC and an LLP, a limited liability partnership, and what factors about my business are important in selecting one form for my business over the other?
There are a lot of different entities, or forms, that you can use to create a new business. One very popular business entity is the limited liability company or "LLC," which is a business form that combines some of the features of a partnership and a corporation.
Because there are some big advantages for using the LLC form of business, it has become the favored choice for persons looking to start a new business (and particularly a small business). But, there are some disadvantages to the LLC form, as well, which need to be considered before making a final decision of the form of your business.
Things such as how to form an LLC and how it is to be run or operated are controlled entirely by state law, and the laws, of course, vary from state to state. So, it's very important that you understand the laws in your area concerning LLCs, or get some help from an experienced business law attorney, before you decide to form an LLC.
What's an LLC?
An LLC is a combination of a partnership and a corporation. The owners of an LLC, called "members," get many of the same tax benefits as partners in a partnership and enjoy the limited liability benefits of a corporation.
Typically, unless the members choose otherwise, an LLC is taxed almost exactly the same way that partnerships or sole proprietorships are taxed. Profits and losses are "passed through" to the members of the LLC, and there is no income tax at the business level, or "double taxation."
That is, with a corporation, there is a tax on the corporation's net income, and then the corporation's shareholders (or stockholders) must pay individual income taxes on any dividends they receive from the corporation. With an LLC, on the other hand, the profits "pass through" to the members, and they pay income taxes at their individual tax rates.
Choosing the LLC form can bring you some significant tax disadvantages, however. For example, the profits you receive from the LLC most likely will be subject to self-employment taxes, which are designed to cover the Social Security and Medicare taxes that most employees have withheld from their paychecks.
Like a corporation, the members of an LLC are generally shielded from personal liability for the LLC's debts and obligations. This is perhaps the biggest reason why the LLC business form is so popular. So, for example, if the LLC takes out a business loan and is later unable to repay it, the creditor can't sue the individual members to recover payment on the loan.
There are some important exceptions to this rule, however. Most state laws do not shield members from personal liability on a debt or liability owed by the LLC when, for example:
The member personally guarantees the repayment of a debt
The members use the LLC to commit fraud
A member is negligent in appointing or supervising a manager, employee, agent or other member of the LLC with respect to some action that causes harm or damages to a third party
Forming, Managing and Closing an LLC
You form an LLC by filing a form with the secretary of state for the state in which the LLC will be located. The form is called a "certificate of formation" or "articles of organization," or some similar name. The state laws vary significantly on what information must be contained in the articles, but usually you must give at least the LLC's name, address, and the name of its "registered agent," that is, the person who is responsible for accepting important documents, such as legal and tax documents, on behalf of the LLC.
Most of the rules that govern how the LLC will be run are contained in the members' private operating agreement, which is similar to a partnership agreement or corporate by-laws. Unless the operating agreement provides otherwise, all of the members are responsible for managing the LLC, but they can choose to delegate their management authority to a particular member or group of members, or, in some cases, to a non-member manager.
Generally, unlike most corporations, LLCs may have an unlimited number of owners, and there are no restrictions on the type of persons who may be owners. Some states, however, require that an LLC have at least two owners.
Usually, fundamental changes within the business require the unanimous approval of the members. So, all members must consent to the admission of new members, for example. The operating agreement will often contain a provision on how and to whom one member can sell his or her share in the LLC to a third party. Very often, the agreement states that members must first offer their share to the other members, or the other members must consent to the sale.
Upon any member's death, retirement, resignation, expulsion, bankruptcy or dissolution, the LLC is usually dissolved unless the remaining members agree to continue the LLC. Of course, the members can voluntarily choose to close or "cancel" the LLC at any time and for any reason, but the process can be complex, depending on the laws of the state where the LLC is located.
Questions for Your Attorney
I'm in a two-person LLC. I personally guaranteed a loan to the LLC after my co-member agreed to help repay it. That agreement is not in writing, and he recently died. Am I liable for the loan?
One of the members of our LLC wants to sell his share to someone, but some of us don't want the sale to go through. Can we stop it?
What's the difference between an LLC and an LLP, a limited liability partnership, and what factors about my business are important in selecting one form for my business over the other?
Getting Out of A Contract
Sherrie Bennett
So what if you want to get out of a contract? Some valid reasons for not fulfilling a contract - sometimes called "defenses" - include:
Duress is an overcoming of the will by force or other means. A contract made under duress isn't enforceable. An example would a person holding a gun to your head to get you to sign a contract.
Fraud and misrepresentation involve false statements about a present or past important fact that is relied on by a party to the contract. A fraud is a deliberate misstatement of a fact. In the case of a misrepresentation, the injured party can cancel the contract. An example would be if someone sold you a table they said was an antique, but it turned out to be a reproduction.
A defrauded party can cancel the contract and sue the wrongdoer for damages. A victim of fraud may also have other remedies under the law of consumer fraud.
Mistake occurs where one or both parties to the contract believe a fact to be true when it isn't true. If one party makes a mistake, the error is called a unilateral mistake. For example, if you sell somebody a table that you think is an ordinary table made in 1950 for a few dollars, and it turns out to be a valuable antique made in the year 1800, the law will not ordinarily invalidate that contract.
Generally, this type of mistake doesn't invalidate a contract, because the law doesn't excuse negligence or inadvertence. However, if the other party to the contract induced the mistake by leading you to believe it was a modern table instead of an antique, then you may cancel the contract.
If both parties to a contract make a mistake, the error is called a bilateral mistake. This type of mistake generally voids the contract because there was no "meeting of the minds" or consent.
Lack of what's called consideration, which can be money or property, or a promise of money or a promise to do or not to do something, can invalidate a contract. For this reason, a promise to make a gift is ordinarily not enforceable.
However, if another person acts in reliance on your promise to make a gift, the promise may become liable under principles of what's known as promissory estoppel or detrimental reliance. For example, if you promise to donate a million dollars to your college to build a library, and the college builds the library, you may be required to make the gift.
A Statute of Frauds requires certain kinds of contracts to be in writing to be enforceable. For example, in most states a lease of a year or longer must be in writing to be enforceable. However, a Statute of Frauds may not be a defense to an unwritten contract if one of the parties has relied on the contract to his or her detriment.
Impossibility of performance can terminate a contract if something unforeseen prevents the performance of the contract. For example, you contract with a famous painter to do your portrait and the famous painter dies. The obligation to paint your portrait cannot be completed. The contract to paint your portrait is terminated by impossibility of performance.
Rescission sometimes occurs when one or both parties has the right to cancel a contract under the terms of a contract. For example, an underage person can cancel a contract because he or she lacks competence to make a contract in the first place. Or the parties can together agree to terminate the contract.
Sherrie Bennett is the former director and staff attorney at the University of Washington Student Legal Services in Seattle.
So what if you want to get out of a contract? Some valid reasons for not fulfilling a contract - sometimes called "defenses" - include:
Duress is an overcoming of the will by force or other means. A contract made under duress isn't enforceable. An example would a person holding a gun to your head to get you to sign a contract.
Fraud and misrepresentation involve false statements about a present or past important fact that is relied on by a party to the contract. A fraud is a deliberate misstatement of a fact. In the case of a misrepresentation, the injured party can cancel the contract. An example would be if someone sold you a table they said was an antique, but it turned out to be a reproduction.
A defrauded party can cancel the contract and sue the wrongdoer for damages. A victim of fraud may also have other remedies under the law of consumer fraud.
Mistake occurs where one or both parties to the contract believe a fact to be true when it isn't true. If one party makes a mistake, the error is called a unilateral mistake. For example, if you sell somebody a table that you think is an ordinary table made in 1950 for a few dollars, and it turns out to be a valuable antique made in the year 1800, the law will not ordinarily invalidate that contract.
Generally, this type of mistake doesn't invalidate a contract, because the law doesn't excuse negligence or inadvertence. However, if the other party to the contract induced the mistake by leading you to believe it was a modern table instead of an antique, then you may cancel the contract.
If both parties to a contract make a mistake, the error is called a bilateral mistake. This type of mistake generally voids the contract because there was no "meeting of the minds" or consent.
Lack of what's called consideration, which can be money or property, or a promise of money or a promise to do or not to do something, can invalidate a contract. For this reason, a promise to make a gift is ordinarily not enforceable.
However, if another person acts in reliance on your promise to make a gift, the promise may become liable under principles of what's known as promissory estoppel or detrimental reliance. For example, if you promise to donate a million dollars to your college to build a library, and the college builds the library, you may be required to make the gift.
A Statute of Frauds requires certain kinds of contracts to be in writing to be enforceable. For example, in most states a lease of a year or longer must be in writing to be enforceable. However, a Statute of Frauds may not be a defense to an unwritten contract if one of the parties has relied on the contract to his or her detriment.
Impossibility of performance can terminate a contract if something unforeseen prevents the performance of the contract. For example, you contract with a famous painter to do your portrait and the famous painter dies. The obligation to paint your portrait cannot be completed. The contract to paint your portrait is terminated by impossibility of performance.
Rescission sometimes occurs when one or both parties has the right to cancel a contract under the terms of a contract. For example, an underage person can cancel a contract because he or she lacks competence to make a contract in the first place. Or the parties can together agree to terminate the contract.
Sherrie Bennett is the former director and staff attorney at the University of Washington Student Legal Services in Seattle.
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