Careful What You Say, Someone May Believe You

These words are about something not likely to do you any good – unless you are among those who write contracts for a living, or read them- and then only if the only thing on TV is the “Kardashians”. But if you have enough wine for something not often contemplated, this is for you.

I’ve improved my talent for reading non-verbal clues. I’m now up to about 15% accuracy in deciphering what you really mean when you tell only part of what you mean, or when you intentionally misdirect the message. That’s on a good day. Generally most of us impute meanings to messages, both spoken and non-spoken, and are just dead wrong. Yet paradoxically we all think we’re pretty good at that, probably for the same reason we all think we possess more common sense than we really do. It’s easy to think we’re really good at something when there is no way to prove we’re wrong. Have you noticed that sometimes the less evidence we have to prove our theory, the stronger we feel that we are right?

As an example, those who take being a Democrat seriously make projections about the motives of Republicans. Republicans make the same projections about Democrats. Imagine the confusion if they’re both right!

But as I so often do, I have diverted myself. The real purpose of this is to say that the miscommunication of which we are guilty is mostly informal. That is to say, it’s in what we say, what we think, and cleaned up only a little, in emails. Our more formal communication deserves more thought and clarity. Unfortunately, that’s the exception, not the rule. Here’s an example:

In a contract that was presented to me last week, a south Florida (read “foreigner”) lawyer sent me a contract for his client to sell a business. The parties had negotiated the contract for weeks. The Buyer had based his offer on the Seller’s financial statements, his history of business operations, overhead, profit, and all the other things a Buyer would want to know. But the contract followed a standard form that contained the provision that many forms contain that says “….. This writing contains all the terms and conditions of the transaction and all negotiations of the parties are merged into the provisions hereof”…. or some such dribble. The financial statements and other documents that caused the deal to be made were not part of the contract.

All I can say is “really”? You’ve spent all this time, based your deal on numbers given and promised to be accurate, and now your contract says those things are not to be included as part of the contract? Suppose the Buyer takes possession, begins to operate, and finds that the Seller just made up all those numbers, and now the Buyer has contracted away his right to rely on the Seller’s representations? What does that say about the Realtor, lawyer, or agent who documented that deal? One of two things: Either he was a seriously biased representative of the Seller, making it all the more important for the Buyer to weigh carefully every word in the agreement, or that he is just careless or hurried enough to use a form, making it again important for the Buyer to weigh every word carefully. Wouldn’t this contract have better expressed the intent of the parties had it said something like, “this writing incorporates by reference the financial statements, performance data, and documents of title exchanged between the parties prior to its execution”?

One more example and we’ll adjourn this to the next article: A standard form real estate contract says “… time is of the essence”. Is it really, for all issues? For instance, what if a large deposit is paid for something really expensive. The deal is contingent on a report from an inspector or appraiser. One or the other party expects to change his position based on the contract. The Seller, for instance, will move to Washington when the contract is final and the financing is in place, even before closing. Later, when the termite inspection isn’t received timely, will you allow the Buyer to legally cancel the deal if the report, through no fault of anyone, is one day late? Suppose your contract had said something like” time is of the essence for all matters in this agreement involving the making of the contract or the payment of money”. Would that have preserved the essential expectations of the parties while at the same time not given to one party an unexpected right to walk away? Does your client deserve the benefit of a careful use of words by his agent? Of course!

The point is not that you, the drafter, can anticipate everything that might happen. You can’t. It is that you should structure the language in each agreement intentionally. A Realtor gets a commission for several things that he or she is better at than any member of the public. One of them is preparing the contract to fit the deal. Young lawyers are sometimes asked, “Do you know why people pay you more by the hour than they would pay someone else? It’s not for your typing skills. It’s because of your brain.” Your work only starts with the form.

Please raise your level of performance by making sure that your contracts say what the parties mean. Don’t leave it to a judge to alleviate an unintended and unfair result because you didn’t pay attention to communication.