Let me start with a well-worn caution: ‘The experience we have in Courts of justice leads us to know that persons who trade without due caution often find their hopes deceived: they find in the result that they have parted with goods for which they never can obtain the money.’ – Abbot, C. J., Montague v. Benedict (1825)
In other words, look before you leap! Businesses are trading goods and services and expect payment in exchange. Those trades are often guided by agreements, whether written or not. There is a meeting of the minds on certain key elements of the exchange – a description of what is to be exchange, the quantity and quality of what is to be exchanged, the price, the mode of delivery, the time for delivery, etc. These are all things that are settled in every business exchange.
By law, certain contracts such as for the sale of land, sale of goods over a certain value, and contracts of a year or more in length, must be expressed in writing. While not every agreement must be evidenced in writing, where huge sums of money are involved, it would be in your best interest to have such agreements in writing. So here goes:
- ‘Where large sums of money are concerned, it is important to trust nobody.’ – Agatha Christie, Endless Night. There isn’t much to add here. Trust no one. Don’t take them by their word alone. Put the details of your agreement in black and white, on paper, with the signatures of those authorised to enter into such an agreement.
- Memories fade. Sure you had a great discussion with the other party about what will be exchanged in the performance of the agreement, but that was six months ago, before circumstances complicated issues and both parties are no longer in agreement about the details of the exchange. In such instances, memories will serve the interests of the party calling up the memory. When the details of the agreement are on paper, signed by both parties, the written details help to focus the minds of all parties involved.
- Avoid clairvoyance. Business relationships thrive on transparency. It is better to have the expectations of both parties to the agreement in writing so that neither party is trying to guess or perceive the expectations of the other. Lay it all on the table, as they say. When the parties are operating in the same trade/business, there may be standard expectations whether they are written or not, but you never know.
- Life happens. Sometimes, unforeseen circumstances prevent the discharge of the agreed exchange. What happens then? These are the what-ifs that can be anticipated in an agreement, and when stated in writing, both parties are clear about the consequences of non-performance of their side of the bargain. This is where it is useful to use the services of a lawyer to draft your agreements. Lawyers by their training and experience have come across some of these unexpected situations that can limit the discharge of obligations in an agreement and will include an appropriate force majeure (or acts of God) clause to protect the interest of the parties.
- Wise King Solomon will not be judging where there is a dispute. When faced with a claim by two women over a child, King Solomon knew just how to approach the dispute to mete out justice. These days, arbiters like to rely on evidence, not prescience, so the more documented evidence they have, the better for justice. A written agreement is the best expression of the terms of the agreement.
Get Help!
