Practice Areas in Business Law
Writ
of Sequestration
Breach of Contract and Business Disputes
Unfair Competition in Business
Writ of Sequestration
When a creditor cannot repossess property it has a security
interest in through nonjudicial means, it should consider
the use of a writ ofsequestration. Sequestration
prevents the debtor from transferring or disposing
of the particular asset when the creditor plaintiff has
filed a suit to foreclose a security interest, or to gain
possession of the property at issue.A writ of sequestration
involves the possession of property which the creditor
has a security interest, ownership interest or some claim
to. A writ of sequestration prevents the debtor from harming
the property which is the subject of a foreclosure or
judicial sale. When a writ of sequestration is issued,
it orders the sheriff or constable to take possession
of the property outlined in the writ and hold it until
the court determines which party is entitled to it.
A writ of sequestration may be issued for the possession
of personal property when the underlying suit is for title
or possession of personal property or fixtures or for
foreclosure or enforcement of a mortgage, lien, or security
interest on personal property or fixtures and a reasonable
conclusion may be drawn that there is immediate danger
that the defendant or the party in possession of the property
will conceal, dispose of, ill-treat, waste, or destroy
the property or remove it from the county during suit.
The sequestration process may be used in proceedings involving
real property. It is mostly utilized, however, in proceedings
relating to personal property and commercial goods. Here
are a few of situations where a writ of sequestration
may be appropriate:
- When a creditor of an
auto loan is seeking to gain possession of the
automobile that it has a security interest in
because the debtor is in default on the loan.
- When a creditor of a
household goods or other personal property is
seeking to gain possession of the property that
it has a security interest in because the debtor
is in default on the loan.
- When a party rightfully
has the right to possession or ownership of
property but is unable to gain possession of
that property.
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There
are some considerations that a client should think about.
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A
lawsuit must be filed in addition to requesting
a writ of sequestration. Accordingly, the
filing costs of obtaining a writ are more
than most actions since the filing fees include
the filing fees for the lawsuit and the writ,
and the service of process fees for the lawsuit
and the writ.
- After the petition is
filed, a hearing will be required before a writ
is issued.
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A
sequestration bond must be obtained before
a writ will be issued. A replevy bond must
also be obtained if the plaintiff wishes to
take possession of the property after the
writ has been executed. A sequestration and
replevy bond can usually be combined into
a single surety bond.
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When
dealing with goods, the plaintiff must comply
with the Uniform Commercial Code, the Fair
Debt Collection Practices Act and the Texas
Debt Collection Act. The correspondence from
the creditor to the debtor and the creditor's
acts must satisfy the requirements of these
statutes or the debtor may have a valid claim
against the creditor.
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Breach
of Contract and Business Disputes
When parties enter into
a business or commercial agreement, they generally
do not plan to breach that agreement. However,
many factors can lead to a breach or a dispute
by one or all of the parties. Such factors can
be a misunderstanding of the terms or conditions
of the agreement, unexpected variables where the
contract appears to not have any provision for,
a change in the financial situation of one ore
more of the parties, or the death, dissolution,
or incapacity of a party.
The impact of such factors
can be minimalized or even eliminated if the contract
is thorough, written clearly and constructed to
anticipate possible variables that typically arise
in a particular industry and related transactions
and situations.
Although a well-drawn contract
can help prevent the possibility of a breach,
breaches of contract and business disputes do
occur. Often business disputes can be resolved
without the need for judicial intervention. The
necessary parties may be able to negotiate through
any disagreements and reach a result that satisfies
all parties.
Unfortunately, the need
for judicial intervention cannot be avoided. In
such cases, a person or business entity will likely
be subjected to service of process, motions, hearings,
discovery, depositions, and trial. This is a daunting
process for many and if not handled properly,
that person or entity will likely face an unfavorable
outcome.
In any case, a person who
faces any kind of business or commercial dispute
should retain the services of a law firm. At Musick
& Musick, LLP, we handle a variety of
business transaction and litigation matters including:
- Breach of
Contract
- Secured
Transactions
- Fraud
- Unfair Competition
- Business
Entity Formation
- Business
Dissolution
- Business
Mergers
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Unfair Competition in Business
Our capitalist society is based
on the fundamentals of competition between businesses
and the right of those businesses to compete in the
marketplace. Competition is good for the public and
for the economy. Sometimes, however, companies will
use unethical and improper methods to compete. When
those unethical and improper methods are considered
illegal, a company has unfairly competed with its competitors.
Texas has several laws that protect companies from unfair
competition.
When a company has a distinctive
trademark or servicemark that is in use, it may apply
for registration with the Texas Secretary of State.
Registration with the State of Texas protects the mark
from infringement and provides more protection than
a common law trademark or servicemark.
Even if a company has not registered
a mark with the Texas Secretary of State or with the
US Patent and Trademark Office (USPTO), state laws afford
protection when an unethical company attempts to use
the likeness or common law mark of another company to
deceive consumers.
Another remedy for unfair competition
is a suit for the misappropriation of a trade secret.
In Texas, the theft or misappropriation of a trade secret
can result in civil and criminal penalties. When a company
has information that is believed to give it a competitive
advantage and the company makes an effort to keep that
information secret, the information is a trade secret.
When a person obtains the trade secret without permission
or provides the information to another party without
the consent of the company, then that person has misappropriated
a trade secret.
Tortious interference with
a business contract is a recognized tort in Texas. When
Company A has a valid contract with a client and Company
B willfully and intentionally interferes with the contract
between Company A and its client that results in damages
to Company A, Company B has tortiously interfered with
the business contract between Company A and its client.
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