Recently we had a client ask us whether a parent has liability for the actions of their child.  After researching this issue, we thought that this valuable information on Parental Liability would be helpful to share.

Civil Parental Liability

In Indiana, a parent is liable for the actions of their child if those actions are done knowingly, intentionally, or recklessly and cause harm to a person or their property.  However to be liable, the parent must have custody of the child and the child must be living with the parent.  The limit of a parent’s liability is $5,000.  (See I.C. 34-32-4-1).  The purpose of this statute is to protect innocent victims from damages by irresponsible minors.

How long am I liable for my child’s actions?

A parent will only typically have liability for their minor child until the child reaches the age of majority, 18.

What happens if my child injures someone or something?

You may have insurance coverage if your child injures someone or something.  Typically both homeowners insurance and renters insurance provide coverage for both property damage and liability coverage.  These insurance policies usually cover damage that someone suffers while on your property, even if the injury was committed by another household.  Therefore, if your child injures someone or something, always check with your insurance company to see if you have coverage.

What about my minor driving a car?

Pursuant to I.C. 9-24-9-4, an individual who signs an application for a permit or driver’s license agrees to be responsible jointly and severally with the minor applicant for any injury or damage that the minor applicant causes by reason of the operation of a motor vehicle if the minor applicant is liable in damages.  However, when a minor turns 18, the individual who signed the minor’s application is relieved from the liability imposed under this chapter and subsequently incurred by the applicant operating a motor vehicle.

If you have any questions regarding Parental Liability, please contact one of our attorneys. We would love to help you.

*Disclaimer: The author is licensed to practice in the state of Indiana. The information contained above is provided for informational purposes only and should not be construed as legal advice on any subject matter. Laws vary by state and region. Furthermore, the law is constantly changing. Thus, the information above may no longer be accurate at this time. No reader of this content, clients or otherwise, should act or refrain from acting on the basis of any content included herein without seeking the appropriate legal or other professional advice on the particular facts and circumstances at issue.

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Option to Purchase

An option is a right that the owner of a real property (the “optionor”) gives to another person (the “optionee”) to buy certain property at a fixed price for a definitive duration.

An option is an offer that binds the optionor to sell, but does not obligate the optionee to purchase. Typically, during the option term the optionor usually cannot revoke or withdraw the option without the optionee’s consent.

Right of First Refusal

A right of first refusal obligates a real property owner to offer their property to the holder of the Right of First Refusal upon the same terms as the owner is trying to sell the property to another party. By choosing a right of first refusal versus an option, the owner of the property has more control over the sale of their property, whereas with an option the holder can force the sale at will. With a Right of First Refusal, the holder must wait until the owner decides to sell the property.

When the owner of property decides to sell their property, a right of first refusal becomes an option since the holder is not obligated to exercise the Right. If the holder does not exercise the Right of First Refusal, the owner is free to sell to the third party. If the holder of the Right of First Refusal exercises their right, the owner must sell to the holder on those terms.

Both Options and Rights of First Refusal must be in writing, signed, contain a legal description of the property, and have consideration to be legally enforceable. Sometimes they are included in lease contracts, or they may be drafted as a separate agreement.

If you would like assistance drafting a Right of First Refusal or an Option, please contact one of our Real Estate attorneys. We would love to help you.

*Disclaimer: The author is licensed to practice in the state of Indiana. The information contained above is provided for informational purposes only and should not be construed as legal advice on any subject matter. Laws vary by state and region. Furthermore, the law is constantly changing. Thus, the information above may no longer be accurate at this time. No reader of this content, clients or otherwise, should act or refrain from acting on the basis of any content included herein without seeking the appropriate legal or other professional advice on the particular facts and circumstances at issue.

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Does incorporation protect me from personal liability?

PART 2: HOW TO AVOID PERSONAL LIABILITY FOR BUSINESS DEBTS

If you own a business, you likely, at least partially, made the decision to form a corporation or a limited liability company (LLC) so that you wouldn’t be held personally liable for debts related to the business. However, sometimes courts will hold a corporation or an LLC’s owners, members, and shareholders personally liable for the debts of a business.  This is called “piercing the corporate veil.”

Typically “piercing the corporate veil” happens in one of two scenarios; when a business is closing and does not have enough assets to satisfy its outstanding debts, or when a business is sued and there is either no insurance or not enough insurance to satisfy the obligation arising from the lawsuit.

When a court evaluates whether to pierce the corporate veil, the court considers the following factors:

• Whether the company and its owners are distinct.
• Whether the company and the owner’s assets are kept separate.
• Whether the company’s actions were wrongful or fraudulent.
• Whether the company failed to follow corporate formalities.
• Whether the company was adequately capitalized.

If you have questions about how to protect your business or if you are ever personally sued for the debts of your business, you may need the help of a business attorney to defend yourself. The attorneys of Bloom Gates Shipman & Whiteleather, LLP have decades of experience defending businesses throughout Northeast Indiana.

If you need assistance or advice on how to avoid personal liability in a business, please contact us. We would love to work with you.

*Disclaimer: The author is licensed to practice in the state of Indiana. The information contained above is provided for informational purposes only and should not be construed as legal advice on any subject matter. Laws vary by state and region. Furthermore, the law is constantly changing. Thus, the information above may no longer be accurate at this time. No reader of this content, clients or otherwise, should act or refrain from acting on the basis of any content included herein without seeking the appropriate legal or other professional advice on the particular facts and circumstances at issue.

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