How to deal with your agreements?
So you’ve all heard of “agreements.” What pops in your mind when you hear that word? The sa- cred foundation of law, that complex document with unintelligible sentences, that scary looking piece of paper with tiny letters, or that thing you’ve signed to open a bank account... What about that box you click on when visiting a website? Or perhaps, marrying the love of your life?
List as many as you wish, you’ll never get them all. But don’t worry, when you understand what an agreement is, you’ll see that you don’t need to list them all.
But wait, at least you all know that an agreement is always a written document, where parties promise to do something, right? If you said yes, then keep reading, because both offerings in this question are false.
Okay, first things first. Epagoge (i.e. inductive reasoning) is not the proper way of understanding the concept of “agreements.” Trying to add up pieces and examples to reach a definition will be a huge waste of time & effort. Rather, you should understand the concept of “agreement” and identify various examples in accordance with this concept. For this reason, I rather prefer to use deductive reasoning when explaining agreements. That being said, let’s start by defining what an agreement is.
1. What is an agreement? - Common Misknowledge
An agreement is simply a mutual understanding between two or more parties, where parties prom- ise to do (or not to do) something. In principle, an agreement doesn’t have to be in written, it can be written or oral (spoken). Written and oral agreements are both valid and legally enforceable. Therefore, the common idea suggesting that an agreement must be in written form is far off the mark. It’s true that, exceptionally - by law - some types of agreements may only deemed valid if written down. However, in principle, being in written form is not a condition for validity.
Generally speaking, there are 3 main components of an agreement; namely offer, acceptance, and consideration. An agreement cannot be formed in the absence of any of these 3 components. Offer and acceptance defines the aim and subject of the contract, and they’re both declarations of inten- tion. They tell what the parties wish to achieve.
A plumber offers to repair the sanitary system of a house, a shipping company offers to deliver the goods, a sculptor offers to make a sculpture... Keep in mind that an “offer” may be a promise to do (“positive obligation”) or not to do (“negative obligation”). Thus, an offer is not always a promise “to-do” something.
When the offer is accepted, acceptance occurs. Practically, acceptance is mostly demonstrated by signature. Signing an agreement shows the intention and acceptance to be bound by the terms and conditions of an agreement. Obviously, there are a whole bunch of other ways which demon- strates acceptance (such as ticking a box, sending a confirmation e-mail, or simply accepting an offer by phone...), however, signature is by far the strongest way for declaration of intention.
In principle, all declarations of intention are capable of establishing a valid contract and there is - generally- no hierarchy between a signature, sending a confirmation e-mail, or simply saying “I ac- cept.” on the phone. The issue is that, a signature is the most effective way of demonstrating that an offer is accepted. Needless to say, signature naturally comes with written agreements.
Consideration is basically the value that the parties provide. Consideration has to be mutual and parties have to bring “something of value” to table. For example, on one hand, a plumber provides his services to repair the sanitary system, on the other hand, the client pays money. In the absence of “mutual” consideration, the arrangement simply becomes a “gift.”
2. What’s the point of “written” agreements? - “Verba volant, scripta manent”
So why do we have a whole bunch of written agreements for nearly every relationship with others, despite the costs and efforts of drafting, reviewing and revising a written agreement? The answer is simple, “trust issues.”
As I always say, “Written agreements are the sweet of fruits of bitter distrust.” Drafting a written agreement is simply the most dominant way to ensure that there is a proof indicating the under- standing between the parties.
They keep it as a tool to use if the other party fails or simply refuses to honour his promises. In ad- dition, parties may forget (or act like they’ve forgotten) what they’ve agreed upon, or may simply refuse to honour their promises. Thus, nine times out of ten, you’ll end up drafting or reviewing an agreement. And that’s also good for you.
After all, “Verba volant, scripta manent” (spoken words fly away, written words remain).
3. Know what you want, be clear, don’t overcomplicate and don’t get lost!
The main idea behind agreements is not as complicated as it seems. If you want to have the best agreement, you should stop overcomplicating it. Understand the transaction, define your expecta- tions, clearly set forth what you want, lay down possible scenarios that will potentially arise, make a risk assessment... Don’t overcomplicate your thinking, as well as your language.
A simple language and a clear mind will save you from complicated disputes and waste of money spent during legal proceedings, not to mention the stress. However, make no mistake, a simple language does not mean an unelaborated one. My grandfather who was also a lawyer used to say, “Even the place of a comma can make or break a deal in law!” This is definitely true!
A lawyer is not only a person who gives legal advice. A good lawyer must also have a strong grasp of language, and play with words when needed, just like a musician who plays with sounds.
Oh, and I almost forgot! There are also breaks in a song where the music simply stops for a few seconds for an elevated harmony, right? Just like that, a lawyer should not write everything down on an agreement. This is especially important when a lawyer is reviewing the agreement sent by the other party. If the other party missed to include a point that he could have clearly written down for his own benefit according to law, a lawyer does not (and should not) write that provision down, or mention it.
At the end of the day, a lawyer must protect his client, not the other party. This warning may seem unnecessary to you, but you wouldn’t believe how big mistakes are made by trying to load up an agreement with unneeded (and usually harmful) explanations.
When it comes to language, a bad or erroneous language can lead to serious disputes on the meaning and interpretation of a provision. Truly understanding a provision is one thing, but the real challenge begins when there is a provision that requires interpretation. There may obviously be few provisions in an agreement which might leave room for limited interpretation, I mean, as long as there is law, there’ll be interpretations. Interpretation is not only important for agreements, the same applies for legal regulations. You wouldn’t believe how many different opinions are asserted on a provision of a code.
One thing is for sure. An agreement with a whole bunch of provisions that makes you get lost in ambiguity is the worst agreement. You should always know and never lose track of “what, when and how.”
Speaking of legal interpretation, an interpretation must be directed to reveal the true will of the par- ties. And to reveal such will, there are various legal interpretation methodologies in law. Thus, it’s also important to determine which methodology to follow. But that’s a whole different subject. So I’ll leave that for another time.
You can’t imagine how many disputes emerge from agreements surrounded by ambiguity, contain- ing overcomplicated and unclear provisions. Therefore, the language of an agreement must be both refined and simple. It has to be simple, but it also has to contain necessary legal references and correct terminology. And in order to have such balance, it’s always preferable to work with a good lawyer.
So don’t fall for that cute, one paged agreement that your marketing agent “kindly” asks you to sign and send back to him ASAP as a “tiny procedure.” Signing an agreement is never merely a proce- dure. Take your time, read it, be sure that it includes what you’ve agreed upon prior, ask your lawyer to review and revise it, ensure that it’s provisions are in accordance with applicable law... So don’t rush, make sure that your rights are protected, and that no question on your mind remains unanswered.