An Ounce of Prevention is Worth A Pound of Cure

One of my favorite legal cartoons shows a man in tattered clothes, seated on the sidewalk, cup in hand. His destitute state is explained by his sign: “Made a Verbal Contract.”

Yes, verbal agreements are, in theory at least, usually (but not always) enforceable. But they are not ordinarily your best option. The main reason to avoid a verbal agreement, as opposed to a written agreement, is that the terms of verbal agreements are easier to forget, or to remember incorrectly. If I had a nickel for every client who came in with a tale of woe that included the client saying that the agreement was oral, and the answer to my question of why being “He was my friend, we trusted each other,” I’d have . . . well, a lot of nickels.

The sad truth is that very often, the friendship is now over, and in its place is a contentious relationship that may include litigation. And it is so unnecessary. Often by the time these cases are over, I am convinced that neither my client nor the former friend was intentionally trying to deny the other the benefit of their agreement. Either they were never talking about the same thing, or they were, but at least one of them sincerely but incorrectly recalls the terms of the agreement.

Had they reduced their agreement to writing, this process would often have resulted in them realizing they did not have exactly the same thing in mind. They could then have negotiated something acceptable to each of them. At worst, they might have decided not to make the agreement at all, and at least their friendship would probably have remained intact. If they had reduced the agreement to writing, and then later one of them recalled things differently than what was actually agreed, he could simply take out his copy of the contract and be reminded that his friend remembered it right, he was mistaken, and one would expect, again, the relationship would likely have remained intact.

Often a lawyer can be very helpful in drafting a written agreement. Lawyers are trained to anticipate issues and can suggest provisions that will help clarify what is to happen if certain situations arise. They are trained to write in a way that is clear and unambiguous. (Yes, some lawyers like to show they are worth their fees by using fancy words and lots of them, when fewer and shorter ones would do just fine, but this is increasingly the exception rather than the rule.) Not paying for a lawyer to help with an important transaction is like saving money by not paying for healthy food and a gym membership or other means of getting exercise. It may not seem like such a good decision later when you are instead paying for bypass surgery.

Will Murphy is a litigator, mediator and arbitrator practicing in South Florida.

Posted in Legal Tips