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In the Land of Ambiguity, a Sound Contract Reigns Supreme

Four Corners

 Negotiating a transaction always ends smoothly. Issues never arise. And, you are still dreaming!

In truth, transactions frequently experience hiccups. Differences in opinion usually arise. A savvy negotiator knows to expect conflict, whether negotiating the purchase of a car, installing a bathroom tile, or starting a new business.

What to Do:

The “four corners” of the contract should contain all of the terms governing the transaction.  This means that the contract should provide for everything; nothing should be left unspoken. 

  • One contract should govern: One contract should be used to express the terms of the agreement and not a sequence of different documents.  The use of one contract prevents referencing external documents, such as additional purchase orders.  The contract should contain all the terms of the agreement.
  • Document all the terms in writing: In North Carolina, oral contracts are valid.  Therefore, you must be cautious about verbal agreements. Considering the power of the spoken word, the contract should be the full expression of the agreement. Unwritten correspondence should not supplement or supplant any terms of the contract.
  • Sign the document: When both parties to the agreement signed the contract, uncertainty is removed. 
  • The clarity in the agreement: Avoid ambiguity.  Every significant detail should be fully discussed in a single contract.  

What Goes Wrong:

Today, we communicate in many different ways - through our phone, text, email, or social media. Faxes are sent (yes, this is still used!) and occasionally documents are physically delivered. All these methods of communication are great, offering potential ease and convenience.

The downside? Retracing the sequence of correspondence.  

The Scenario:

Let's say a date of completion is critically important. Perhaps a restaurant opening, already scheduled and publicized, is reliant upon the installation of an important appliance. New customers and big money are on the line. 

Disaster:

Clarity does not exist if different quotes, contracts, and timelines were discussed. Exacerbated by undocumented texts, emails and phone calls, ambiguity permeates the transaction. The Scenario, the delivery date is unclear and the restaurant opening is a disaster

Without a clear contract, litigation looms. The challenge for the attorney becomes reconstructing the story and piecing together the timeline. Valuable time is spent in defense of an uncertain legal position.

Avoid, Patience, & Spend:

Avoid the stress of ambiguity through foresight. Anticipate issues and get a complete contract. Apply strategic patience. The deal can await the completion of a sound contract. Both sides will benefit, so be wary of a party resistant to entering into a contract.

Spend money to save money. By having an attorney prepare the initial contract, you can potentially save considerable sums of money spent in litigation.

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