Without at the same time giving you a Promotion, Raise, or Bonus as an Incentive for Doing so?

can your employer make you sign a non compete contract

With respect to the enforceability of non-compete agreements (also called non solicitation agreements) , the question is often asked whether an employer in Colorado can demand that an existing employee sign a non-compete agreement without at the same time offering the existing employee a promotion, raise, or bonus.

Are Non Competes Enforceable?

In other words, is a non-compete agreement enforceable in Colorado which is not supported by consideration being provided by the employer to the employee in exchange for the employee’s execution of the non-compete agreement? Unfortunately, the answer to the question is a resounding “yes.”

Colorado courts have determined that an employer’s mere decision to decide not to fire you (or stated another way, an employer’s mere decision to continue to employ you when the employer could otherwise have decided to fire you) is adequate consideration to support the enforceability of a non-compete agreement required to be signed after the employee began working for the employer.

Thus, if you are an at-will employee in Colorado, you can legitimately be terminated by an employer, all other things being equal, for the simple refusal to sign a non-compete agreement.

Restricting Enforceability of Non Compete Agreements in Colorado

The best way to restrict the enforceability of a non-compete agreement is to seek qualified legal counsel like Hansen Law Firm to assist you in attempting to narrow the scope of the agreement before it is signed. Unfortunately, many employees and independent contractors simply sign such agreements without first considering how harmful such non-compete agreements can be to their long-term career goals or to their ability to start their own business someday.

Spending money up front hiring legal counsel to assist in the negotiation of a non-compete agreement before it is signed, is money well spent if you consider the impact that a broad non-compete agreement may have on your career, including your ability to demand a raise and/or to switch employers. After all, think about how much leverage you have given up in demanding a raise and/or promotion from your current employer if your current employer knows that the non-compete agreement you signed with that employer will prevent you from being able to find new employment in your chosen career and/or in your chosen geographic location.

Call Hansen Law Firm for More Information About Non Compete Law in Colorado

If you have been asked to sign a non-compete agreement, Hansen Law Firm can help you to potentially negotiate an agreement that better protects you and your long-term interests. If you have already signed a non-compete agreement, Hansen Law Firm can help you to better understand your rights and responsibilities under the agreement. We are experts on all things related to non-compete agreements and their legality and enforceability within the State of Colorado. To schedule a free consultation, please call 303-720-7566.

QUESTION: Can you breach a contract (for example, stop paying or performing under a contract) if the other side breaches the contract first? 

ANSWER: Under Colorado law, a party may establish justification for nonperformance under a contract (like not paying any more money or not performing any more services) if it can demonstrate that the other party to the contract caused its nonperformance thru a prior and proceeding material breach of the contract. 

As one Court has explained:  “One party’s failure to perform under a contract precludes that party’s demand for performance by the other party.”  Hemmann Mgmt. Servs. v. Mediacell, Inc., 176 P.3d 856, 859 (Colo. App. 2007). 

Stated another way,

“if a promisor is himself the cause of the failure of performance of a condition upon which his own liability depends, he cannot take advantage of that failure.”  Reid v. Pyle, 51 P.3d 1064, 1067 (Colo.App.2002).  See also Kaiser v. Mkt. Square Disc. Liquors, Inc.,992 P.2d 636, 640–41 (Colo.App.1999) (a material breach by a party deprives that party of the right to demand performance by the other).

Although each contract is different, a material breach of contract by the other party may give you the right to stop performing, repudiate the contract and/or sue for breach of contract.  However, a decision regarding if, when and how to stop performing under any contract is a serious question which would not be taken lightly given the potential costly repercussions that may arise as a result.  If the decision is made prematurely, you could open yourself up to a breach of contact claim being asserted against you.  It the decision is made too late, you could expose yourself to additional and potentially avoidable damages caused by another’s breach of contract. 

Before deciding what to do, it is oftentimes helpful to discuss your dispute with an experienced breach of contract attorney who can help you access your options and develop a comprehensive strategy for attempting to confront another parties prior and proceeding breach of contract in the most advantageous way possible to both help limit your damages from their breach of contract and maximize your ability to legally recover your damages from their breach of contract. 

At Hansen Law Firm we have been helping clients negotiate such turbulent waters for over 30 years.  We can help you decide how best to react to another parties’ breach of contract and help put you in the best position possible to correct your ship! 

Contact us online or call us now!

Is any breach of contract enough to justify suing someone for breach of contract or to stop performing your obligations under the contract because the other side has breached?

Many non-lawyers are surprised to learn that not all breaches of contract are treated the same under the law.  A breach of contract must usually be determined to be “material” before you can successfully sue someone for breach of contract, and a breach of contract must usually be determined to be “material” before you can rely on that breach to justify your decision to stop performing your obligations under the contract.

When determining whether an act or omission constitutes a material breach of a contract, Colorado courts consider the importance or seriousness of the breach and the likelihood that the complaining party has received or will receive substantial performance under the contract.  A party is determined to have substantially performed when the other party has substantially received the expected benefit of the contract.  Deviation from contract duties in trifling particulars that do not materially detract from the benefits the obligee would have derived from literal performance does not constitute a material breach  Materiality must be assessed in the context of the expectations of the parties at the time the contract was formed.  A breach that is material has been said to go to the root of the matter or essence of the contract and renders substantial performance under the contract impossible.   In deciding whether a breach is material, the extent to which an injured party would still obtain substantial benefit from the contract, and the adequacy of compensation in damages for the breach, is also considered.  

By way of example, a Colorado court determined that a breach was not material when a developer provided a contracted for easement for insertion of water lines even though the easement was not in all places the exact contracted width of 20 feet wide.  The Court determined that the width of the easement was generally acceptable to accomplish its purpose.  Of course, in determining whether any breach of contract is material, all cases are dependent on their particular facts and on the exact terms of the contract at issue.  Thus, it is helpful to consult with an experienced breach of contract attorney before deciding what actions may be appropriate in response to the alleged breach of contract and whether the breach of contract in question in your case is likely to be determined to be material.

Under Colorado law, if your former employer fails to pay you the wages and compensation that you are owed, you may be entitled to not just the payment of such wages and compensation, but also the award of a penalty against your former employer of between 50 to 100 percent of the amount of wages and compensation determined to be owed, interest on such unpaid wages and compensation, along with the possible award of the attorneys’ fees you incur in forcing your former employer to pay the amount owed. However, the Colorado Wage Act requires that appropriate prior written notice be provided to your former employer of the alleged amount owed before you assert a claim against your former employer and the Colorado Wage Act may entitle your former employer to the award of its attorneys’ fees against you if you wrongly claim that you are entitled to wages and compensation. See C.R.S. § 8-4-101 et. seq. As a result, it is helpful to obtain knowledgeable legal advice before asserting a claim under the Colorado Wage Act to help assure that you are taking appropriate measures under the law to both protect you and entitle you to the possible award of all wages and compensation to which you may be entitled.

Under the Colorado Wage Act, in addition to your regular pay, wages and compensation may include unpaid amounts owed under an incentive compensation plan or an unpaid stock or cash bonus. However, such unpaid amounts must be fully earned and vested at the time of your termination of employment. In addition, things like unpaid vacation pay may be counted towards the amount of wages and compensation that you are owed upon termination. It should also be kept in mind that you may be entitled to the award of penalties and your attorneys’ fees under the Colorado Wage Act even if it is you, and not your former employer, who decides to terminate your employment.

At Hansen Law Firm, we can help you navigate your exit from your current and/or former employer. We can send the appropriate prior written notice under the Colorado Wage Act to help you get paid the wages and compensation that you are owed, and if the former employer does not pay all such wages and compensation owed to you within the 14 day time period allotted under the Colorado Wage Act, we can file and pursue a claim under the Colorado Wage Act on your behalf to help attempt to obtain what you are owed. We can also help you know your rights and obligations under any employment agreement and/or non-compete agreement you may have signed or are being asked to sign and we can help you evaluate any severance agreement you have been provided before you sign it. To schedule a free consultation, call 303-720-7566.

why you would need a contract attorney

Why You Would Need A Contract Attorney

  1. To get the compensation you deserve in breach of contract cases.
  2. For help resolving business disputes.
  3. Expert advice when trying to understand a contract.
  4. When you want professional assistance in drafting a contract.
  5. To represent you in Court when faced with a contract dispute.
  6. For help in reviewing and/or negotiating a contract that you have been asked to sign.
  7. To help you understand your options.
  8. To help your business manage its legal risks.
  9. When you want to enforce a contract, or obtain advice on whether a contract is enforceable.
  10. To help you decide whether you should seek litigation, arbitration or mediation.
  11. To help review, negotiate or re-new your commercial lease.
  12. When you’re starting a business, and need to form a contract agreement.
  13. To help protect you against claims of breach of contract.
  14. To help you get out of a contract.
  15. For help when you want to buy or sell a business.

For help with any of these issues, you can contact Nick Hansen Colorado Contract Attorney.

Often when you’re involved in a dispute regarding a breach of contract, time is of the essence. When an expedient solution is needed, arbitration may be a better solution than litigation.  However, arbitration is not right for all situations, and in some instances, may not be the most affordable way to reach a solution.  In addition, before arbitration can be undertaken, arbitration must be specifically provided for in the contract at issue, or all parties to the dispute must reach an agreement to arbitrate to resolve their dispute.

Should you agree to arbitrate your contractual disputes?  Here are a few pros and cons to help you decide.

The Good About Arbitration

Let’s start with the positives. As previously stated, arbitration is often a faster way to reach a resolution, especially when all parties to the dispute agree that a quick resolution is needed.  In arbitration, the parties to the dispute are basically hiring a private judge so if the parties to the dispute are in agreement, they can usually succeed in requesting the private judge to resolve their dispute on the timetable agreed upon by the parties.  In Colorado, the Federal Court system is much slower than the State Court system.  Thus, if one would otherwise find themselves in Federal Court, arbitration becomes an even more attractive choice in situations in which time is an important factor.

Arbitration also allows the parties some input into who the decision maker will be regarding the resolution of their dispute.  Thus, if the parties agree, they can, for example, have an expert on the topic in dispute serve as the arbitrator or at least one of the arbitrators.  This can be helpful when a highly technical issue must be resolved.

Arbitration proceedings are not open to the public.  As a result, they are a more private alternative to litigation. This can be especially beneficial in cases in which the contract in question reveals private information (for example, trade secrets) that you do not want disclosed to the public.

The Bad When Agreeing to Arbitrate

The cost of initiating arbitration is higher than the cost of filing a lawsuit.  In addition, in arbitration, the parties are required to pay for the time spent by the arbitrator(s) to hear and resolve the dispute.  In litigation, the taxpayer pays those costs.

You lose your right to a jury when you reach an agreement to arbitrate.  Thus, all facts in dispute are decided by one person (the arbitrator), who is usually a lawyer and/or former judge, and not a jury of your peers.

When a final decision is made in an arbitration proceeding, your recourse is limited.  If the arbitrator reaches a decision that you feel is unfair, it may be impossible to air the underlying claim in court, and you may be forever stuck with the decision.

An arbitrator is often thought to be more likely to “split the difference.” This means that it is entirely possible for the decision reached to not satisfy the wants or needs of either party involved.

Contract Dispute Arbitration

If you’re involved in a contract dispute, agreeing to arbitration could be an expedient and effective way to reach a resolution.  However, it is by no means necessarily the best solution for all disputes.  It is highly recommended that you take the time to discuss with an experienced contract formation services lawyer whether your contract drafting should include a provision in your contract that requires arbitration in the event that a dispute arises or whether, when presented with a choice, you reach an agreement to arbitrate.  For your free initial consultation and help deciding whether you should arbitrate your contractual dispute, please call 303-720-7566 now. Take a look at what we have been able to do for others in our recent legal victories.

Non-compete agreements are used to attempt to restrict a company’s employees, independent contractors, customers and vendors from engaging in competitive activities with that company. But, many people wonder “Are non compete agreements enforceable?”  For example, an employee with in-depth knowledge of a particular business or industry may be restricted from sharing their knowledge with competitors.

In the State of Colorado, non-compete agreements generally are not allowed, unless they fall under one of the following four exceptions:

  • They are used to protect trade secrets
  • They are used to protect the purchaser in connection with the sale of a business and/or its assets
  • They are used to recover the expense of education or training an employee of less than two-year duration
  • They are used to restrict executive and management personnel or professional staff to those personnel

Non-compete agreements that do not fall under one of these exceptions generally cannot be enforced in Colorado.

Unfortunately, the statutes and case law governing non-compete agreements in Colorado are vague at best.  C.R.S. Section 8-2-113, boldly states that it is unlawful to use threats, force or any other means of intimidation to prevent a person from engaging in any lawful occupation.   It also states that “any covenant not to compete which restricts the right of any personal to receive compensation for performance of skilled or unskilled labor for any employer shall be void.”

However, Colorado’s bold pronouncement within C.R.S. Section 8-2-113 against the enforce-ability of non-compete agreements is misleading.  The pronouncement is of absolutely no effect if it can be successfully argued that the non-compete agreement in question falls into one or more of the four exceptions noted above.

Simply put, while C.R.S. Section 8-2-113 touches on the issue of non-compete agreements and their legality in Colorado, it does not, unfortunately, provide sufficient detail and explanation to guide those who may be subject to such agreements.  For example, the law leaves it up to the courts to determine who qualifies as “executive and management personnel” and what restrictions, if any, are necessary to protect any purported trade secrets.

Reasonable Non Compete Agreements

Even if a business is able to establish that its non-compete agreement is allowed under the law, the business must still prove that the restrictions imposed by the agreement are reasonable.  Among other things, to determine whether the restrictions are reasonable, the court will examine the:

  • Geographic scope of the restriction
  • Duration of the restriction
  • Whether the agreement is overly restrictive

Negotiating Non Compete Agreements in Colorado

The best way to restrict the enforce-ability of a non-competition agreement is to seek qualified legal counsel like Hansen Law Firm in helping to narrow the scope of the agreement before it is signed.  Unfortunately, many employees and independent contractors simply sign such agreements without thinking about how damaging such non-compete agreements can be on their long term career goals.  Spending money hiring legal counsel to assist in the negotiation of a non-compete agreement is money well spent if one considers the long term impact that a broad non-compete agreement can have on your career, including your ability to switch employers, start your own business and be paid what you are worth. If you’ve already asked the question “Are Non Compete Agreements Enforceable” and you’ve decided that yours isn’t, we can help. Or if you still don’t know the answer, we can help decide that too. As a trusted Denver employment lawyer, you will be in good hands to get the contract you deserve.

Help Fighting Non Compete Agreements in Colorado

If you have already signed a non-compete agreement, it makes sense to seek qualified legal counsel like Hansen Law Firm to assist you in understanding your rights and responsibilities under the agreement.  It would be tragic to simply assume that you are subject to the restrictions of a non-compete agreement when a skilled legal professional could review your agreement and tell you otherwise.

At Hansen Law Firm, we can help you navigate the vagueness and complexity of the law regarding non-compete and non solicitation agreements in Colorado. If you still have more questions about your specific agreement and are non compete agreements enforceable, call us. We’re experts on all things related to non-compete agreements and their legality and enforceability within the State of Colorado. To schedule a free consultation, please call 303-785-7777.

A contract can be written, oral or even implied by the actions of the involved parties. While written contracts can clearly be enforced in a court of law, people often wonder whether they have any legal recourse in the event of a breach of oral contracts.

Can an oral contract actually be enforced? Whether you’re thinking about agreeing to an oral contract or you’ve already entered into one and the other party isn’t fulfilling their end of the deal, this is an important question to consider, and one that could lead to a breach of contract.

Oral contracts are enforceable in many instances, despite popular belief. In most situations, though, you are

Oral Contracts ARE a Form of Contract!

usually better off placing your agreement in writing. Trying to enforce an oral contract often results in a “he said, she said” battle, and without proper evidence, it can be difficult to achieve the desired outcome.  This is why it’s much more preferable to use a contract lawyer that is well versed in contract formation to create a written contract, as opposed to using an oral contract.

Statute of Frauds

There are, however, instances in which an oral contract is not acceptable. This concept exists to prevent deceitful conduct in high-value or long-term situations. In most states, the Statue of Frauds requires a written contract in situations, including:

  • Real estate sales
  • Real estate lease agreements lasting longer than one year
  • Property transfers after the owner’s death
  • Contracts that take more than one year to complete
  • Agreements to pay someone else’s debt
  • Contracts that last longer than the life of a party
  • Contracts over a certain amount. The amount differs by state.

In most instances, courts will not enforce oral contracts that fall into these categories. In order to be enforceable, there needs to be some sort of written agreement.

However, there are a few situations in which an oral contract can be enforced even if is in one of these categories. If one party partially complied and/or performed with the terms of the oral agreement or if the plaintiff relied on the defendant’s promise and suffered a major problem as the result, the court may still enforce the oral contract.

The law does not favor oral contracts, but in many situations, they can be enforced by the court. However, the burden of providing evidence falls on the plaintiff. You are much more likely to receive a favorable judgment from the court if you are able to provide at least some kind of evidence or documentation, like emails, text messages, or cancelled checks, to provide circumstantial evidence of the existence of an oral contract.

If you need help enforcing an oral contract, contact Hansen Law Firm. For a free consultation, please call 303-785-7777.

If you are considering whether to seek legal action regarding a breach of contract, you may be wondering: What is the breach of contract statute of limitations??

This is a common question, and the answer may not be as straightforward as you would think. If you are thinking about filing a lawsuit over a breach of contract, here is some general advice to help you ensure that you file your claim within the allowable timeframe.

Timeline for Suing for Breach of Contract

Time limits for suing someone are established through laws called statutes of limitation. Different states have

Is Time Running out for your Breach of Contract Statute of Limitations?

different time limits, and the limits may vary depending upon the exact nature of the claim. Understandably, this can make it challenging for individuals and organizations to know when they need to act if they plan on seeking legal action regarding a breach of contract.

In Colorado, the general breach of contract statute of limitation, whether the contract is oral or written, is three years.   However, if a contract is for a “liquidated debt” or for an “unliquidated determinable amount,” it is subject to a six-year limitations period.  An amount is determinable if an agreement sets forth a method for determining the amount due, regardless of the need to refer to facts external to the agreement.  The statute of limitation for tort actions arising from a breach of contract is two years.

The exact date at which the clock starts counting down to calculate whether the time-period has expired isn’t always obvious. The clock usually does not start running on the date in which the contract is entered in to. Rather, the countdown to the end of the accepted time-period often begins when the alleged breach of contract is discovered or should have been discovered.

Breach of Contract Statute of Limitations Cases

Every breach of contract case is unique, and because the breach of contract statute of limitations enforces strict restrictions on how long you have to file a lawsuit, it is always in your best interest to contact an attorney as soon as possible. You might find out that special rules apply to your contract.  When dealing with breach of contract cases, it is always advisable to get the ball rolling on the process right away to ensure that you know what rules will apply and so that you do not miss any deadlines.

If you require legal assistance regarding an alleged breach of contract, please contact my office today to schedule a free consultation. Call 303-785-7777.

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