I’LL CUT MY OWN DEAL THANKS
Keeping the lawyers out, and other good ideas.
‘Just keep it simple and to the point – the last thing I want to do is scare them off.’
Everyone, and I do mean everyone, leads with those words when they’re providing instructions. It’s understandable. Apart from obvious reasons like overcapitalising on cost, none of us like to raise any potential problems with the person we’re doing a deal with. It’s a difficult conversation and we’d all rather avoid it. It’ll be alright.
Most of us successfully DIY our day to day legal transactions like privately selling and buying some personal assets, engaging contractors to do work, negotiating most work / business contracts and so on. At some point though the line blurs and before we know it the inner lawyer in us all has done a runner, and in his place sits a desperate panic merchant, silently praying nothing will go wrong:
“If things go south right now, I’m in a world of pain”.
How about some free lunch?
I’m not advocating using a lawyer for everything. On the contrary I encourage legal self-help.
So, if you find yourself in a position where you need to pay more than the usual amount of attention to a transaction, keep in mind these things:
- What are you, or the other side promising to deliver?
Some contractual promises, also called warranties, are considered so important in an agreement that a breach entitles the aggrieved party to terminate. Make sure you know what you’re promising and what the other side is promising.
- If something goes wrong, what’s the next step, and who pays?
Use the ‘if then else rule’. Our team relies this rather dull mantra all the time when working with clients to help negotiate their transactions. It loosely translates to ‘if something happens, then what do we want to happen as a result, and failing that what is both parties’ agreed fall back position’.
Give some thought to what will happen if somebody cannot perform an obligation under the deal you’re negotiating. does that mean either of you can terminate? or something less, like a fixed reduction, or automatic extension? And if that won’t happen, what then is the fall back that you can both agree on?
Tie up as many conceivable loose ends at the start, to avoid arguments and uncertainty at the end.
- How exposed are you?
Let’s say you’re the one giving warranties, and you end up being the one who cannot perform. What happens if you can’t perform? What are you risking and how easy is it to get out? If you don’t need a lawyer for the agreement itself, consider whether you need one for some asset protection advice.
- Any knock on effects?
Sometimes the immediate and obvious breach (and consequential loss) is not the issue. Instead, it might be that the aggrieved party suffered an indirect loss that could be considerably larger than the immediate or obvious loss under the primary agreement.
Make sure you know what that loss could be, or that you limit or cap your liability.
Unscrambling the Egg
The best thing about DIY legal is the money you save and the satisfaction that you’ve done it yourself. The worst is having to engage a lawyer after the eggs have been scrambled so to speak. It’s sometimes too late: conditions and expectations never settled, consequences never agreed, losses never capped.
If you’re unsure, give us a call. We are more than happy to talk to you about whether you need us, and what it will cost, and it’ll be your choice whether you want to take us up.