Once I had to explain to one of my kids why they had to brush their teeth every night. I told them I knew it was a hassle and took up ten minutes that they could use to play Angry Birds, but it was important because they could get cavities and we’d have to go to the dentist for a filling. They would rather use that ten minutes than to use an afternoon getting fillings and I would rather pay $.85 for a toothbrush than a few hundred dollars for fillings. This is preventative medicine and most people get the concept at least for their health care. However, those same people ignore preventative medicine strategies in other parts of their life.
Typically, in cases about contracts or business, lawyers charge by the hour. I have the same hourly rate if I am reviewing a contract, drafting a contract, or representing somebody in a dispute over a contract. However, the amount of hours I spend on litigating a contract is far more than what I would have spent in an initial review of a contract. In just about every suit on a contract or business dispute I’ve had, I can see in the document where I could have simply added a small paragraph or changed a word in the agreement that would have gone a long way to quickly resolve or even prevent the issue I was litigating. Most of these contracts and agreements were not drafted or reviewed by attorneys. Often what the person thinks the contract or agreement says is not actually in the contract, or at least is not clear. If you are signing an agreement, have an attorney review it. They will have clauses and requirements that you may not have considered. They may find that the language in the contract and what you intend are different.
If you do have a jargon-filled contract, they can explain to you what it means so you know what you are agreeing to, and change it if needed. If you want to terminate a contract or business agreement take the document to an attorney before you do so. I have recently handled a case where a business owner didn’t like the way his partner was running the business and thought that he could just give up his ownership and walk away. However, there were loans from the bank that he had guaranteed. As it stands, he has to pay money for loans to a business he no longer owns or works for. If he had consulted with an attorney who could have explained the risks, he may have been able to get out of the business cleanly.
It’s always easier to fix problems before they become problems. One attorney I know had a client who was a partner in a new business. The attorney kept trying to get him to get his partner to sign an operating agreement so that the amount of ownership interest for each was clear. The client kept putting it off because every thing was going well and he didn't want to rock the boat. When the time came to sell the business, the partner had conveniently forgotten any oral agreement he had on the split of the proceeds of the sale. The client eventually won, but it cost him about ten times as much in legal fees to get the same result.
Always remember to use a little bit of preventative medicine in your business arrangements.
–Bradley A. Coxe is a practicing attorney in Wilmington, NC with Hodges & Coxe PC who specializes in Personal Injury, Medical Malpractice, Homeowner's Associations, Contract and Real Estate disputes and all forms of Civil Litigation. Please contact him at (910) 772-1678.