What Would a Judge (or Jury) Do?

I was working through a contract recently with a client and having the same conversation I’ve had many times over the years.  My client informed me that she and the other party had a high level of trust and had verbally agreed upon the basic business terms to govern their relationship.  Counsel for the other party had then been asked to prepare a simple contract and came back with something quite lengthy and detailed and quite different from what the parties had discussed and agreed.

So, what’s the best way to approach this situation?  My client’s inclination was to raise her concerns in an e-mail but (to avoid delays) otherwise just execute the agreement and move ahead.  After all, the parties trusted each other and knew what the deal was, and they didn’t want lawyers getting in the way – which was already happening with the first draft of the contract.  As you may guess, I was not in favor of this approach.

In these situations, perhaps the most basic question is similar to the one on so many bracelets – “WWJD?”  I don’t mean the question that immediately comes to mind for most of us, but rather – “What would a judge or jury do” if confronted with this contract and this set of circumstances?  Or more specifically, what would a judge or jury, without knowing the parties and their agreement beyond what’s in the written contract, determine their legal rights and obligations to be?  If you can’t live with the various likely interpretations, then you need to redraft the agreement, even if it means taking out much of the inaccurate detail and taking a “less is more” approach – which is what we did in this case.

No matter how quickly you want to move and how important the deal is, the material business terms should be accurately reflected in a written contract; and you should never sign a contract that misstates those terms – no matter how high the level of trust.  Remember – “WWJD?”

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