Three Contract Pointers
Oral agreements, for the most part, are enforceable. The problem with an oral agreement is determining the agreed upon terms. He said X and she said Y—so which is it? It has been my experience that it is important to manage expectations, on both sides of the transaction. This is not always difficult to do because most people like certainty. Reducing an oral agreement to writing is one possible way to create certainty. Another way is to send a follow-up confirming e-mail. This e-mail may just be restating the agreed upon terms with a request to respond if anything appears to be inaccurate. Or, a confirming e-mail may also restate the agreed upon terms and include a statement that you will not begin working on the transaction until you receiving an email confirming that the terms are accurate and accepted.
A second pointer is not to overcomplicate things. While it is true that some transactions are just complicated by their nature, many transactions do not have to be. For example, it is simpler and cleaner to structure the purchase or sale price to say $5.00 per unit instead of creating a variable price which includes overhead, transportation costs, etc.
A third point is to understand what you are agreeing to. This sounds basic but it is very important. Each sentence and paragraph in an agreement have a meaning and purpose. It is even important to understand what is not included or left out of the agreement. Contracts may also contain provisions that are vague or require interpretation. An example of a provision that requires interpretation is “a party’s performance will reasonably comply with the industry standard.” What do the terms “reasonably comply” and “industry standard” mean? Or, the provision could say “a party’s performance will comply with ANSI B71.1-2003.” This latter provision creates certainty as to what will be the measure of a party’s acceptable performance.
The above three pointers, while not an exhaustive list, are good things to keep in mind when drafting or reviewing contracts or agreements.
This article does not provide legal advice or create an attorney-client relationship. If you have any questions or would like to learn more about this topic or if you have other legal questions, do not hesitate to contact Chris Corpus, Esq. of Corpus Law Inc at Chris@CorpusLawInc.Com or 216-973-2475. Copyright Christopher A. Corpus 2017.
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