Upcoming Lunch Hour Seminars, articles on special, indirect or consequential damages and new filing dates for tax returns
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ACBA Business Section Newsletter

ACBA Business Law Section
January 2017 Newsletter

Hot off the electronic presses

Quick links:
Lunch Hour Seminar – Data Privacy and Protection Read More

Lunch Hour Seminar List for 2017  Read More

Special, Indirect, or Consequential Damages – What are we talking about here? Read More

Tax Returns – New Filing Dates for 2017 Read More

2017 ACBA Business Section Executive Committee Read More

Submit your articles! We welcome your contributions to the Newsletter! Read More

Upcoming Lunch Hour Seminars 

The Business Section will be sponsoring or co-sponsoring these seminars in the coming months:

Lunch Hour Seminar – Data Privacy and Protection: EU-U.S. Privacy Shield and Other Recent Developments

Wednesday, February 8, 2017

How is the privacy and security of personal information regulated in the U.S.? What issues are companies facing? How do new regulations affect your clients? Presenter Ethan Forrest will discuss recent developments in U.S. privacy litigation and regulation, while addressing the concerns most likely to arise for small-to-medium technology companies. He will also cover how the EU’s replacement of Safe Harbor with Privacy Shield will change the way clients handle international data, particularly when they contract with third parties for data processing.

This topic will have pervasive impact on any U.S. company doing business with European customers or vendors. You'll want to know about these issues when advising clients with European business connections.

The presenter will be Ethan Forrest, with the San Francisco office of Covington & Burling LLP. Ethan helps clients solve novel and complex intellectual property, privacy, and technology problems, whether by litigation, counseling, or negotiation. He has a particular focus on copyright, trademark, and technology issues, as well as internet privacy and security matters. Ethan has litigated intellectual property and commercial cases in federal and state court, and has experience in trials and government investigations. He has also published articles on copyright law, online privacy, and legal issues in the arts 

Under the new ACBA CLE pricing policy, admission is free for all ACBA members. You will receive one hour of CLE credit.
Register Here

Important DatesComing Soon: Business Section Lunch Hour Seminars in 2017

The Business Section has released its schedule for lunch hour seminars in 2017. Additional details will be published a few weeks before each seminar, dates and times subject to change. 

Save these dates on your calendar:

  • Data Privacy and Protection: Recent Developments in the U.S. and E.U. – February 8, 2017
  • Employment Law Update for Employers – March 15, 2017
  • Negotiation and Communication  Strategies for Lawyers – April 12, 2017
  • Selling an S Corporation: How To Choose the Right Tax Structure – June 15, 2017
  • Advising Your Business Clients on Ethical Issues – September 13, 2017
  • Cannabis and Your Business Clients – October 13, 2017
  • Arbitration Update – November 15, 2017
  • Cooperatives: An Overview – December 13, 2017
Special, Indirect, or Consequential Damages

“In No Event Shall Client Be Responsible for Special, Indirect, or Consequential Damages” – What Are We Talking About Here? 

In the forms files of many business attorneys, a ubiquitous boilerplate clause addresses the dreaded “special, indirect, or consequential” damages. Some companies have adopted a policy that no contract can be signed unless the company is specifically excused, in writing (and sometimes in ALL CAPS), from this scary-sounding exposure.
But what, really, is the concern? Think way back to your first year in law school. You're in contracts class, the issue is damage computations, and the assigned case is the 1854 English appellate decision in Hadley v. Baxendale. The Hadley brothers were in contract with a delivery service to transport a broken crank shaft for repair, and the delivery service breached the contract by improperly delaying the delivery. The Hadleys sued for lost profits due to factory shutdown during the delay.

The appeals court famously split contractual damage computations into two components:
  1. damages that are naturally and ordinarily foreseeable from the breach (general or direct damages) and
  2. damages that arise from special circumstances actually brought to the attention of the defendant at the time the contract was entered (special or consequential damages). 
Because the Hadleys had not informed the delivery service that a delayed delivery would result in a factory shutdown, the delivery service was not liable for the Hadleys’ lost profits.
The economic theory behind the court’s decision was that the parties would be able to appropriately allocate risk if both are informed about the amounts at stake in the event of a breach. If the delivery service had been aware that it would have been liable for the Hadleys’ lost profits during any delays, it could have taken extra steps to ensure timely performance and, presumably, would have charged an additional amount for its services to reflect its enhanced risk.  
Unfortunately, this decision still leaves us, 163 years later, in search of a reliable and predictable definition for the phrase “special, indirect, or consequential damages.” Careful lawyers working for risk-averse companies will sometimes imagine an extended causation analysis from aggressive plaintiffs’ attorneys, under which, for example, an economic catastrophe might be creatively attributed to faulty soldering in a newly-installed server. While there is a tendency for lawyers to be dogmatic about eliminating all exposure for special damages, a better approach for most practitioners will be to list or otherwise recite the economic stakes in a contract and to be clear that all parties are aware of those stakes.

If your client has informed its commercial counterpart about the issues and needs associated with proper performance under the terms of a contract, your client should have recourse if the counterpart fails to keep up its end of the deal.
Tax Return Filing Dates

New Tax Return Filing Dates for 2017 Filing Season  

Remember that, starting with the filing season covering 2016 tax returns, we have new due date rules. For partnerships reporting on the calendar year, the filing deadline has moved up from April 15th to March 15th. That new due date will also apply to calendar-year S corporations and calendar-year LLCs reporting as partnerships for tax purposes. The change is intended to provide Form K-1’s to partners, members, and shareholders in advance of the individual filing deadline, which remains April 15th. (This year, because April 15, 2017, falls on a Saturday, and because Monday, April 17, 2017, is a holiday in the District of Columbia, the actual April filing due date will be April 18, 2017.)
For calendar-year C corporations, the filing date has shifted from March 15th to April 15th. There is a quirky exception to this new relaxed corporate filing date: for C corporations with a fiscal year end of June 30th; the filing date is still two-and-a-half months after the close of the year, creating a filing due date of September 15th for such corporations.
Filing extensions will still be permitted, provided that the extension requests are timely filed. Taxes must still be paid on the original, unextended due date for the return.
Along with these changes, a new filing deadline also applies to the FBAR (Report of Foreign Bank and Financial Accounts). The old and confusing deadline had been June 30th; the new rule coordinates FBAR filing with individual tax return filing and establishes an April 15th due date for the FBAR.

ACBA Business Section Executive Committee 

The members and officers of the Business Law Section for 2017 are as follows: Please offer the 2017 ExComm your support, and feel free to drop in on any ExComm meetings, generally held at 11:30 am in the ACBA conference room immediately prior to seminars sponsored by the Business Section.  Also, the ExComm is always interested in signing up new members, so let any of us know if you’d like to participate!
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Newsletter Blurbs

We Welcome Your Contributions! 

Please send in any comments, tips, or interesting stories from your practice! We are looking for quick blurbs, from three to twelve sentences in length. We will credit the author by name and identify his or her firm or company. Please send any write-ups to Tom Maier at
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