03 Jun A Rant on Contracts
I’ve been feeling a contract rant coming on for some time now, so it is time for me to channel my inner Dennis Miller.
Recently we had an occasion to be working with a client on a business purchase. Part of the business purchase required some seller financing. The bank’s lawyer required the use of standby note (a promissory note with a delayed start of payments) and they had a preferred format (which is about as surprising as the Sun coming up in the East). The problem with this preferred format is that it absolutely rejected the notions that we as a practice talk about, and even simple common sense. Nothing infuriates me more than providing a form from a lawyer, modifying that form to fit the transaction, and then having the lawyer that provided the form object to the modifications. Basically, it is the lawyer version of the five year old’s argument of “Mine.”
Inducing further geeky lawyer rage is one of the affronts to the English language—the run-on-on-on-on-on-and on sentence. This promissory note contained a 247-word sentence. To the lawyer who drafted this beast, until you sell books like James Joyce, try to remember you are writing a contract not literature. Asking a lawyer to read and understand a 247-word sentence is bad enough. It is absolutely criminal to ask a consumer, even the most well-educated individual, to read that sentence and expect it to be understood.
Quite aside from the impressive and near endless stream of words, the document contradicted itself. One part said there was no security or collateral for this note, and another section said that this note had the security and collateral listed in that 247-word murder of common sense writing. Now to be sure you don’t think this was one error buried in long documents, it was not. This wasn’t some “War and Peace”-sized tome, it was only a couple of pages. My 13-year-old daughter could have spotted the problems. But when we pointed it out, the bank’s lawyer held firm that the document had to be in the form he presented.
To my fellow lawyers out there who may read this rant: please make sure that you understand what you are sending out. Don’t waste your client’s money and more importantly my client’s money by sending a document you can’t explain to a lay person. At the absolute minimum, make sure the document makes sense. We all use forms and forms are ok, but please modify the form to fit the transaction.
Second, if you are a client or customer and you are presented with a document that doesn’t make any sense (whether in legal speak or plain English), don’t be scared to request that the necessary changes are made to the document. It is absolutely insane to consider that people are asked to sign and be bound to documents in multi-million dollar transactions that they don’t understand.
To be fair, more often than not, my fellow attorneys are very understanding when these types of changes are requested. But, if you are on the opposite side of the deal and I ask for clarified language, I am not doing it to be a pain. Of all the ways I can be a pain in the neck, this would be way down on my list of choices. I am doing it to make sure that everyone in the deal — my client, your client, and any third parties– understands what the document is stating.
A contract must be understood by all parties. There must be a meeting of the minds. That is what the law requires. If I am asking you to clarify something, it is because I don’t think there is a meeting of the minds. I am not trying to do it to be offensive; I am trying to do it for my client’s interests, and ultimately, your client’s interests.
So, please, if you are dealing with contracts, you have to understand what is be said, written, and asked — and if you don’t, say something.
But, that’s just my opinion—I could be wrong.
But I am not.