Gorman & WilliamsGorman & Williams2026-10-02T19:41:47Zhttps://www.gw-law.com/feed/atom/WordPress/wp-content/uploads/sites/1101556/2022/01/cropped-GW-site-icon-32x32.jpgOn Behalf of Gorman & Williams<![CDATA[Debts and personal guarantees in business: What to know ]]>https://www.gw-law.com/?p=482702026-10-02T19:41:47Z2026-10-02T19:41:47ZOne of the main reasons people form corporations and limited liability companies (LLCs) is to separate their business finances from their personal ones. Nobody wants a creditor coming after their bank account if their business fails and can’t cover its debts.
But that protection has limits. Business owners may be asked to contract away whatever protection the incorporation or LLC provides when taking out a loan, leasing a commercial space or establishing credit with a vendor via a personal guarantee. Once you sign on that dotted line, a debt that belongs to the business could eventually become yours.
What happens when you personally guarantee a debt?
A personal guarantee is essentially a promise that you’ll pay a business debt if the company doesn’t. It gives the creditor another source of repayment – you – if the business defaults.These agreements are particularly common with new businesses or companies that don’t have substantial assets or a long credit history. A bank, landlord or vendor may simply be unwilling to take a risk on your company without it.If the business doesn’t pay, a personal guarantee could result in:
A lawsuit against you individually
A judgment against you personally
Collection efforts involving personal assets
Liability for interest, late fees or other charges
Responsibility for attorneys’ fees and collection costs
Not every guarantee works the same way. If several owners sign, don’t assume each person is responsible only for his or her share. A guarantee may create joint and several liability, which can allow the creditor to pursue one guarantor for the entire unpaid amount.Leaving the company may not solve the problem, either. Selling your interest, resigning or otherwise ending your involvement with the business doesn’t necessarily release you from a guarantee you previously signed.
Know what you’re agreeing to before you sign
A personal guarantee shouldn’t be treated as just another signature page in a stack of business documents. Before signing, find out exactly what debts it covers, whether your liability is capped and when the creditor can pursue you personally. Legal guidance can help negotiate fair terms and keep you from making a potential mistake.
]]>On Behalf of Gorman & Williams<![CDATA[What is a marine insurance warranty breach?]]>https://www.gw-law.com/?p=482642026-09-21T03:23:46Z2026-09-21T03:23:46ZMarine insurance policies often require insureds to follow promises known as warranties. For Maryland vessel owners and businesses, these warranties may address where a vessel can travel, how it must be maintained, who may operate it or what safety equipment must remain aboard.
A breach occurs when the insured fails to comply with one of those promises. The consequences can be serious because a warranty may operate as a condition of coverage rather than a minor term. Whether the insurer may deny a claim can depend on the policy language and the law governing the contract.
How can a warranty breach affect coverage?
Common warranties may require a vessel to:
Remain within navigational limits
Undergo surveys
Maintain fire-suppression systems
Employ qualified crew
Avoid operations
For example, a boat insured for Chesapeake Bay use could create a coverage dispute if it travels beyond an agreed navigation area.Marine insurance disputes are unusual because federal maritime law may apply alongside state insurance principles. In Wilburn Boat Co. v. Fireman’s Fund Insurance Co., the U.S. Supreme Court held that state law may govern the effect of certain warranty breaches when no established federal maritime rule controls.More recently, Great Lakes Insurance SE v. Raiders Retreat Realty Co. confirmed that choice-of-law provisions in maritime contracts are generally enforceable under federal maritime law.A Maryland policyholder should not assume Maryland law automatically decides whether a breach defeats coverage. The policy may select another state’s law, and the wording of the warranty can affect the result.After a loss, insureds should preserve the policy, survey reports, maintenance records, vessel logs and communications with the insurer. Consulting with a Maryland maritime insurance legal professional can help evaluate whether a warranty was breached and whether the insurer has a basis for denying the claim. ]]>On Behalf of Gorman & Williams<![CDATA[How do liquidated-damages clauses work?]]>https://www.gw-law.com/?p=482602026-09-05T13:02:30Z2026-09-05T13:02:30ZWhat does a liquidated-damages clause cover?
Liquidated damages are intended to compensate a party for losses that may be difficult to calculate after a breach. For example, a construction agreement might require a contractor to pay a fixed amount for every day a project remains unfinished beyond the completion date. The figure represents the anticipated harm caused by the delay.
These provisions may also appear in commercial leases, purchase agreements, service contracts and confidentiality agreements. Depending on the wording, the clause may establish a single payment or an amount that increases with the duration of the breach.
The injured party does not have to prove the precise value of the covered loss when an enforceable clause applies. However, that party must still show that the specified breach occurred.
When is this kind of clause enforceable?
Calling a payment liquidated damages does not automatically make the provision valid. Courts usually examine the clause’s purpose and the circumstances that existed when the parties formed the contract.
An enforceable amount should reflect a reasonable estimate of the loss the parties expected a breach to cause. The actual harm must also have been uncertain or difficult to measure at the time the agreement was made.
A court may refuse to enforce a clause designed to frighten or punish the breaching party. An amount that is greatly disproportionate to the anticipated loss may be treated as an unenforceable penalty.
Before signing a contract, each party should consider whether the amount noted reasonably reflects the likely consequences of nonperformance. An experienced legal team can assess a provision under Maryland’s applicable law. Careful review can help to better ensure that a clause will serve as a basis for providing fair compensation – when appropriate – without functioning as a penalty.]]>On Behalf of Gorman & Williams<![CDATA[What if a life insurance policy conflicts with a will?]]>https://www.gw-law.com/?p=482582026-08-19T15:41:52Z2026-08-19T15:41:52ZWhen setting up an estate plan, one thing to consider is how all of the documentation works together. Certain conflicts can cause problems for the beneficiaries.
For example, when setting up a life insurance policy, a person is asked who they want to name as the beneficiary. They make this beneficiary designation with the life insurance provider.However, a person’s will could, theoretically, give different instructions. Perhaps the life insurance policy says that the total payout should go to one child, for example, because the policy was purchased when that individual only had one child to name. Over time, their family grew, so their will says that the life insurance payout should be split between all of their children. Which one takes precedence?
The life insurance beneficiary designation
In most cases, the designation made on the life insurance policy will take precedence over other estate planning documentation, such as a will.In the above example, this means that the oldest child would receive the entire payment. Their siblings would not receive anything, even though it was allotted to them in the will. Since the life insurance policy pays out when the person passes away, it is not part of their estate and does not get split up by their estate plan.Naturally, this can cause significant conflict. The other children may note that their parent clearly wanted the money to be split, while the oldest child says they have no legal obligation to do so. This is why it is so important to consider all types of documentation and assets when creating a comprehensive estate plan, and an experienced estate planning attorney can assist.]]>On Behalf of Gorman & Williams<![CDATA[Taking legal action to combat typosquatting]]>https://www.gw-law.com/?p=482552026-08-05T23:49:28Z2026-08-05T23:49:28ZWhat is typosquatting?
Typosquatting involves purchasing a domain name that is similar to but different from the exact web address used by a brand. Frequently, the party engaging in typosquatting selects a very similar domain name with one letter or number out of place.
If people intending to visit a company's website mistype the web address, they may end up on a fake website intended to distribute viruses or trick them into purchasing knock-off goods rather than the branded products they actually want. They could also be at risk of malware.
Typosquatting is generally an intentional attempt to manipulate the success of another brand for personal gain. Not only does it prevent visitors from reaching a website, but it may also affect the company's reputation, its consumers may blame the brand for whatever occurred after they mistyped a web domain address.
Intellectual property (IP) can be very valuable for a company and may require assertive responses in cases involving intentional IP infringement. Taking legal action to protect a company, including its trademark, can limit the damage done by those engaging in manipulative practices, including typosquatting.]]>On Behalf of Gorman & Williams<![CDATA[When maritime insurance covers rising repair costs]]>https://www.gw-law.com/?p=482532026-07-29T16:55:01Z2026-07-29T16:55:01ZWhen your insurer will cover rising costs
Maritime policies generally cover repair cost increases when the additional expense stems directly from the original covered peril. If a vessel sustains hull damage in a collision and later inspections reveal added structural harm from that same incident, insurers typically accept the expanded scope.
Policyholders must show a clear causal link between the covered event and the rising expenses. Courts applying federal admiralty jurisdiction evaluate whether rising repair costs connect causally to the covered peril and whether the insured complied with policy notification and consent requirements. If a grounding damages a vessel's hull and subsequent dry-dock inspection reveals hidden keel damage from the same grounding, the insurer will likely cover both repairs. If workers discover unrelated corrosion during the repair, the insurer may deny coverage for that separate condition since it falls outside the scope of the covered event.
How insurers review rising cost claims
Insurers examine whether the policyholder obtained prior approval before authorizing work beyond the initial estimate. Maritime hull policies typically include notice and consent provisions requiring the insured to seek insurer approval before authorizing repairs beyond a specified cost threshold. The exact threshold and consequences of non-compliance vary by policy, which makes reviewing your specific policy terms before beginning major repairs an important first step.
The evaluation process also considers whether the policyholder acted reasonably to mitigate the loss. Disputes over repair cost increases often turn on the quality of documentation and the credibility of expert assessments that marine surveyors provide.
Protecting yourself from coverage gaps
Vessel owners benefit from reviewing their policy language before starting major repairs to understand notification requirements and coverage limits. Prompt written notice of any additional damage discovered during repairs is typically required, and failure to notify in a timely manner can put coverage at risk even for otherwise legitimate claims.
If you are facing a dispute over rising repair costs, a maritime insurance attorney can help you assess whether the additional expenses fall within your coverage and make sure your claim is properly documented from the start.]]>On Behalf of Gorman & Williams<![CDATA[What is due diligence, and why is it so important?]]>https://www.gw-law.com/?p=482512026-07-15T23:17:00Z2026-07-15T23:17:00ZThe due diligence process
Due diligence is the process of investigating and evaluating a business or asset before completing a transaction. Even businesses that appear successful can have underlying issues that are not immediately obvious. Without due diligence, buyers may inherit liabilities they never anticipated.
The goal isn’t to find reasons to abandon the transaction. Instead, due diligence allows buyers to make informed decisions based on reliable information. Due diligence can uncover concerns such as:
Identifying these issues allows buyers to negotiate better terms, adjust the purchase price, require corrective actions or walk away from the deal. While every transaction is different, due diligence often involves reviewing several key areas:
Financial review: By examining tax returns, profit and loss statements, outstanding debts and other financial records, buyers can determine whether the business is as profitable and financially stable as it is represented.
Legal review: This focuses on identifying potential liabilities and confirming the business has complied with applicable laws. Reviewing documents such as articles of incorporation, bylaws, contracts, insurance policies and litigation history helps ensure there are no legal obstacles that could affect the transaction.
Operational review: Understanding how a business operates can be just as essential as reviewing its finances. Due diligence may involve evaluating supply chain relationships, internal processes, key employees and physical assets. Businesses that rely on a single customer, employee or vendor may face greater operational risk.
Regulatory compliance: Businesses are subject to federal, state and local regulations, depending on the industry. Due diligence should include assessing whether the business complies with licensing requirements, employment laws and environmental regulations. Compliance issues discovered after closing can become expensive problems for the new owner to fix.
Due diligence is much more than just reviewing paperwork. It is an opportunity to identify risks and liabilities and to ensure that the transaction aligns with your goals. Having a legal professional review contracts, identify areas of concern and negotiate protections can help safeguard your investment.]]>On Behalf of Gorman & Williams<![CDATA[Hidden property issues can lead to construction disputes]]>https://www.gw-law.com/?p=482492026-06-30T00:18:54Z2026-06-30T00:18:54ZIssues can trigger scope creep
Replacing the backsplash in the kitchen could be a one-day tile project in some cases. However, if professionals discover black mold or non-compliant wiring when they begin the demolition process, they may need to discuss the matter with the homeowner before the project moves forward.
Especially in cases where previously unknown issues could lead to construction code violations, professionals may not be able to overlook those issues and continue with the project as planned. Scope creep, or the expansion of a project beyond its original parameters, is a common complication in the construction sector.
The inclusion of appropriate provisions in construction contracts can reduce the likelihood of frustrated and dissatisfied clients turning to the legal system. Professionals may need to include language that addresses the possibility of unforeseen delays and expenses complicating the project.
Working with a construction law attorney can help professionals ensure their contracts include appropriate terms and respond effectively to client complaints. Professionals and business leaders who plan in advance for common issues, such as hidden defects, are less likely to face legal complications due to contractual oversights.]]>On Behalf of Gorman & Williams<![CDATA[Injunctions can help solve breaches of restrictive covenants]]>https://www.gw-law.com/?p=482472026-06-15T14:51:36Z2026-06-15T14:51:36ZHow do injunctions help?
Injunctions are legal orders issued by a judge. They can prohibit continued violations of the restrictive covenant by putting the defendant named in the lawsuit at risk of contempt of court allegations. The penalties the courts could impose include fines and even jail time. They could also hold the party that violated the injunction responsible for the plaintiff’s legal fees.
Injunctions can also sometimes require actions that address the impact of a prior violation. For example, after the breach of a nondisclosure agreement, an injunction could prohibit the release of additional information or even mandate the removal of inappropriate content from a website or social media page.
Requesting the right legal remedies is an important component of any successful business lawsuit. Business leaders trying to protect a company from the misconduct of outside parties who are still subject to restrictive covenants may need to review an agreement, any breach that occurred and the impact that the breach at issue has had on the business with a business litigation attorney, and that’s okay.]]>On Behalf of Gorman & Williams<![CDATA[3 considerations before starting a partnership]]>https://www.gw-law.com/?p=482452026-06-04T10:21:32Z2026-06-04T10:21:32ZStarting a business on your own might not be something that you want to consider. A business partnership can give the owners shared resources and combined skills. This can help the business to thrive.
Some partnerships look amazing on the surface, but it’s critical to dig deeper into the situation to determine if it’s in your best interest. These three partnership considerations are a good place to start, but there may be others to think about.
1: Aligned goals
Partners should discuss their goals before forming the business, but it’s necessary to also talk about the path to reach those goals. Some partners may want to take risks to encourage rapid growth. Others may want to take a slower and more cautious approach to create sustainable growth. Those differences can lead to considerable challenges as the business grows.
2: Defined roles
A partnership should have clearly defined roles that consider each partner’s strengths. If there are roles that will be shared, how they’re shared should be discussed. It’s also a good idea to outline situations that would require all partners to approve the matter, even if the matter falls squarely within one partner’s role.
3: Dispute resolution methods
Even strong partnerships can face significant disagreements, so having dispute resolution standards in the agreement is beneficial. This should include basic guidelines, such as speaking of the matter away from the workplace, but it should also cover how more serious disputes will be handled. Every decision you make when you’re starting a partnership can have a direct impact on the business. If you decide to move forward with the partnership, you should review the partnership agreement. The more detailed this contract, the better the business is protected. Additionally, the contract should also offer you some protections as one of the business’s owners.
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