When Will I Hear Back From You?

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To beat a dead horse is to “waste effort on something when there is no chance of succeeding.” A memorial service for today’s effort will be announced shortly.

We’ve written this before: what has happened to actually discussing open points of negotiation? Is it because it is now much too easy to deal impersonally one with another? Long ago, the only practical way to get a negotiation completed during the lifetime of the negotiators was to meet in person or pick up the phone.

Now, we will digress. There is an expression: “Riding the circuit.” Wikipedia has the following entry:

Riding circuit is the practice of judges and lawyers, sometimes referred to as circuit riders, travelling to a regular series of locations in order to hold court there. Circuit riding has mostly been abolished, but the term remains in the name “circuit court”, commonly applied to levels of court that oversee many lower district courts.

Here’s a practical description of how that worked. Imagine a “circuit” that covered nine counties, each with its own county seat. That circuit had a single judge, one who would “hold court” four or more weeks each year in each of those county seats. In effect, the entire court would move around the circuit from city to city. But, it wasn’t only the judge who rode the circuit (yes – on a horse), his clerks traveled with him. And, so did those lawyers who appeared before the judge. They stayed in the same hotels; they ate all three daily meals together; they drank together; they negotiated settlements with each other.

We who negotiate agreements used to do the same. If we were in the same locality, we’d meet in one another’s office or over a meal. More often, there was no geographic proximity, but there was a telephone. Of course, we used the mails. We would send a draft agreement by mail and, days later (if we were lucky), the postal carrier would return with a copy of the same document. This time, it had handwritten comments. We won’t labor on. You know the drill. It was like playing chess by mail.

Then, along came a technical innovation: the fax machine. Though invented in 1843, it wasn’t until the early 1980s that the time it took to transmit pages fell to where it became practical for broad commercial use. Now, a written document could be received as quickly as could the human voice. But, while it replaced mail service with a faster means of communication, it was still a one-way communication. The recipient didn’t have to respond immediately as was expected on a telephone call (or at a meeting). Further, it was still the same iterative process, one that circled in on a mutually satisfactory result. By means of this repetitive process, we looked for convergence – the more back and forth, the closer we came to the final result.

Email and document comparison technology made the process even more convenient. Document sharing software, when trusted by adversaries, more so. But, all we have done is to further enable the iterative process. We can now go back and forth, faster, even to argue over a single word. It takes little time and no “personal capital” to do so, so why not? There is no keeping a “straight face” by email.

Today, we have even more advanced communications technology than email. Video conferencing is free and universally available. The iterative process can take place in a single face-to-face “meeting.” Let’s call it “one and done.” It’s not the same thing as meeting, over a meal, at the hotel across the street from the stable where we board our horses while visiting our county seats. It is, however, the functional equivalent.

Yet, who among us are negotiating our agreements electronically, cara a cara? Why not? Have we become accustomed to avoiding personal contact? Are we unwilling to take positions in person, ones we can hide behind in an email message or bury inside a redlined document?

In all fairness, some segments of our real estate community encourage or even insist upon meeting by telephone. Typically, they are the purer business segments – the investment bankers or the serious commercial real estate brokers. This process drives the underlying transactions. Ironically, it seems that the larger the transaction, the faster it moves.

What is Ruminations suggesting? It’s simple – when you get someone’s proposed agreement, pick up the phone – suggest a “meeting” by Skype, Facetime, Zoom or whatever. And, after the social niceties, start off by saying: “Here’s where I have a problem.”

If you want to discuss today’s or any week’s blog posting, call us at 973.744.0288.

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Words Are The Skin Of A Living Thought

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“A word is not a crystal, transparent and unchanged; it is the skin of a living thought and may vary greatly in color and content according to the circumstances and time in which it is used.” [Justice Oliver Wendell Holmes, Jr. in Towne v. Eisner, 245 U.S. 418 (1918).] We have loved that quote for nearly 40 years. It tells a lot about the agreements we write.

Consider the word: “maintain.” We looked at how web-based dictionaries define it. According to www.merriam-webster.com, it means: “to keep in an existing state (as of repair, efficiency, or validity).” https://www.ldoceonline.com/dictionary offers that “maintain” means to: “look after something: to keep a machine, building, etc. in good condition by checking and repairing it regularly.” www.collinsdictionary.com similarly offers: “If you maintain a road, building, vehicle, or machine, you keep it in good condition by regularly checking it and repairing it when necessary.” www.lexico.com (powered by Oxford) agrees when it tells us that “maintain” means to: “keep (a building, machine, or road) in good condition by checking or repairing it regularly.” [Read more…]

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Read It Or Lose It, Or How Access Was Lost

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You don’t have to be in the retail property industry for very long before you first come across an access agreement. After all, not all properties are sitting right out there on a prime highway. A plot might be developable if it could be moved to a spot right along the “best” road, but it doesn’t work that way. So, deals are made allowing those traveling to and from one property to cross over an adjoining property. Often, these arrangements are mutual; sometimes they are not.

When we come across such an arrangement for the first time, we probably read the documents pretty carefully. Likely, when we get to our fifth or tenth such agreement, we skip over the boilerplate. One of those provisions is the one that reads something like: “will be binding upon and inure to the benefit of ….” After all, these provisions aren’t much more than, “blah, blah, blah.” We’ve seen them many times before and they are always the same – until they aren’t. That’s what a car dealer discovered about a combined access and sign license with the following provision: [Read more…]

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Why? Why Not?

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Many have a tradition of making (and breaking) resolutions at this time of year. In fact, many have a tradition of making (and breaking) the same resolutions every year. So, why not try a new one this time?

Ruminations suggests that we all resolve to ask two questions, over and over: “Why?” and “Why not?” Let’s stop mindlessly copying and pasting from documents in our files. Let’s start by reading them carefully, something we think most of us haven’t done for a long time, if ever. We’re not just suggesting that the provisions be read as if being proofread. Instead, let’s really read them. Why does this work this way? Why wouldn’t it work another way? [Read more…]

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Knowledge Is Power. Get Some.

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There is a story about a brilliant legal scholar who, after penning an outstanding legal analysis, would turn it over to his students for review and editing. He was asked why he would have young students do the editing instead of doing the work himself. After all, what could they know that he didn’t? How could they, even collectively, know better than he could know? He had a simple response: his students, at that moment, were engaged in the process of learning the very subject matter in the paper. Because their learning was “active,” they were more knowledgeable at that moment. The information was fresh in their minds. [Read more…]

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Two Lease Guarantees Gone Awry

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We wanted to a “hit and run” this week based on what we think is a peculiar and wrong court decision about language in a personal guaranty. Then, we came across a second court decision concerning a guaranty, though with no other connection to the “peculiar” one. Given that electrons are plentiful and essentially free, we’ve chosen to tell readers about the later-discovered one first.

The story begins with a 15-year lease that was assigned by the named tenant to a successor only five months after the lease terms started. In connection with that assignment, a guaranty was given to the landlord, one in which the guarantor guaranteed:

[T]he payment and performance by the [a]ssignee of all its obligations under the [l]ease and all of the obligations of the [t]enant as defined under the [l]ease effective as of the date hereof.

The awkwardness of that text is immaterial to what then happened. About 2-1/2 years later, the lease was further assigned. In connection with this second assignment, the guarantor, in a writing dated about a month later, “confirmed that its guarantee would remain in effect despite [this] assignment….” Then, about eight years after that, the shares of the then tenant were acquired by yet another “tenant,” actually the same one, but with a new shareholder. The parent company of the new shareholder guaranteed the tenant’s lease obligations, the landlord waived its right to cancel the lease by reason of the shareholder change, and, importantly, the landlord received another letter from the original, lease-signing tenant. That letter confirmed the ongoing validity of the original guaranty, using the following language: [Read more…]

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Zero-Based Thinking And Our Leases

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Recently, a 7- year old asked us a couple of questions. The first was: “How old will you have to be to drive a self-driving car?” The second was: “Will you need a driver’s license.” Our immediate, gut thought was that one won’t really “drive” such a car. You’d be a passenger. We’re not thinking about transitional vehicles; we’re thinking about fully-functional ones without driver controls. Then, upon reflection, all of this taking place before we uttered a response, we “knew” that states will set a “driving” age and require a license. Even after we get to control-less vehicles, those requirements, already in place, will exist for at least many years. [Read more…]

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Don’t Believe What I Told You Clauses

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Here’s a story with a few different lessons. One aspect of it won’t be of great utility to our readers, so we’ll get it out of the way right now. The tenant in this story appeared to sign a lease without counsel and without fully reading it. We don’t think that aspect casts any shade on the lessons we’ll be covering, but keep the tenant’s approach in mind as you read the rest of today’s blog posting.

The owner of a successful chain of quick-service, ethnic restaurants developed a new concept – a mall restaurant that would sell gourmet hot dogs. W.C. Fields might have called those “Gourmet Tube Steaks,” but that’s for another industry’s blogs. He honed in on a large mall, one that only had three remaining spaces in what appeared to be its food court (though the court never explicitly identified it as such). One of the existing tenants in that food court was a well-known, national, premium hamburger quick-service restaurant. No, it wasn’t the one with the golden arches. Although that hamburger restaurant sold hot dogs, they were only a sideline. So, this was of no concern to the owner’s gourmet hot dog plans. [Read more…]

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