Legal Question in Business Law in Texas

First of all, to protect yourself, I would send a certified letter to the business owner describing what your relationship was with him, including the fact that you did NOT enter into any type of partnership with him; that your idea to open a store in your locale was solely your idea; and that you did not depend on him or his business for the original concept of your business, etc. (if what I suggested above is true, if not you cannot send this type of letter),

However, if you did use any of their confidential information to open this, or a business that is similar to theirs, without their written permission, you could be sued by them for damages. This applies also to using trade secrets without written permission. There are also other legal issues to consider such as copyright or trademark infringements. Again, if any of these occurred, it would allow this person to seek and action against you in court and to sue you in court for damages, and you will need to retain a lawyer.

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As for time-frames for bringing a suit, in some cases a suit can be brought several years later, and the statute of limitations would not begin to run until the person finds out that they have been damaged, for example, it will begin to run when they find out that you used their confidential information or misappropriated trade secrets, etc. However, in order to answer this question I would need more information from you and to perform research of the law.

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Next, as to the efforts that you put into researching the business in the new location before this person stopped communicating, and if this person has legitimate causes of action filed against you, it is unlikely that you will be able to be use any of the time or efforts that you spent in defense or to mitigate damages, as from what you said, you have no written and signed contract with him. However, I would need to review your communications back-and-forth and the law in order to respond to this question, as it is possible that you formed an ORAL contract with him, which again, may allow him to bring other cause of action against you.

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Next, if you are sued for any of the above, and if the court finds that there is a basis for the suit, this person can ask for initial injunctions and relief that may include a restraining order against you to shut this business down, to remove you and enter your business, to audit the business; to have you post a hefty bond, etc., and if the court awards money damages against you, this can include payment for past and present income, trademark or copyright infringements, trade secret violations, confidentiality violations, breach of contract, etc.

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If you are sued, and you did nothing wrong, you would of course have an opportunity to answer and defend any suit or claims made against you, in court, and let the court decide.

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Currently, I have no specific information from you, other than what you provided, that would allow me to advise you as to where you stand.

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In order for an experienced business and litigation attorney to answer your questions, they would need to review and research your evidence; research the law in detail; and research their business and your business. After this review and research is performed by the attorney, they should be able to sit down with you and advise you as to where you stand and come up with a game plan to place you in a safe zone.

And, if it is found that there are legal issues, it would be better for this attorney to reach out to this person, sooner, rather than later, to see if a contract can be negotiated and signed, because the longer you wait, the more damages may accrue against you if you are sued.

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I always advise people, who are considering opening a new business or buying an existing business, to hire a qualified commercial business lawyer or business formation attorney to research the law and the business, before they go through the expense. The cost of hiring a qualified lawyer, who can help you make the right decision and set your business up properly, will be far less than the expense of you being sued for legitimate causes of action or breach of contract if the contract you signed was not properly written or is one-sided.

Litigation is always expensive endeavor, should you be sued, even if you defend against an unwarranted suit.

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Goldstein & Scopellite, PC has qualified litigation attorneys, business formation attorneys and commercial litigation lawyers available to represent you at either one of their law offices located in Dallas, Texas and Tucson, Arizona - Please visit their websites at www.LawyersDallas.com and www.Lawyers-Tucson.com for more information or to contact them. Thank you.