When Will I Hear Back From You?

Print

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.

Print

Words Are The Skin Of A Living Thought

Print

“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…]

Print

Why? Why Not?

Print

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…]

Print

Knowledge Is Power. Get Some.

Print

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…]

Print

Who Wrote Your Lease, Loan Agreement, Or Other Document?

Print

“A committee is a cul-de-sac into which ideas are lured and then quietly strangled” — Sir Barnett Cocks. Much the same can be said about the documents we read and, sadly, write. Sir Cocks didn’t necessarily mean only that ideas were strangled to death. We want to think he also was thinking about damaged survivors, the ones that survived, but with a life-long injury.

Think about the process we follow to create a written agreement, whether that is a lease, an easement, a loan agreement or any of the others we, Ruminators, can list. In most cases, we start with a form written by predecessors. The words in those forms aren’t “ours.” The “voice” isn’t “ours.” In some cases, we cut and paste from a selection of related forms, each with its own voice. Then, we modify this “base” document, adapting it to the deal in front of us. In simple cases, we fill in some blanks, delete some provisions, and add a few. In others, we make significant changes, some to the very core or philosophy of what the form’s original authors had in mind. Our additions might have been written solely from our own thoughts; they are never tabula rasa (def.: an absence of preconceived ideas or predetermined goals); they never are. In fact, our additions often are snippets from something else we or others have written. [Note that we’ve written “authors,” not just author. That’s because our selected foundational document or document very likely was put together in the same way we are describing.] [Read more…]

Print

Insurance Proceeds: Use Them Or Lose Them

Print

When it comes to some property insurance proceeds, the tag line is: “Use it or lose it.” Most agreements such as leases and mortgages, even poorly written ones, call for one party or the other (or both) to carry property insurance for “replacement cost.” [By the way, “full replacement cost” isn’t one barleycorn larger than plain, old “replacement cost.” A full quart of milk takes up no more space than a lowly quart of milk. And, it isn’t “replacement value,” it is “replacement cost.”] But, “replacement cost” doesn’t mean that the insurer goes out and writes a check for what is determined to be the damaged property’s replacement cost, even if the property is totally destroyed. The insured only gets paid for the cost of what is actually repaired. Note that we’ve just written “repaired,” not “replaced,” even though the coverage is called “replacement” cost. That’s because “replacement cost” is a limit, not the amount that is going to be written on the check. [Read more…]

Print

Consent Expressly Given – A New Look

Print

Sometimes a party has the right to withhold its consent when the other party requires that party’s consent. And, sometimes the right to deny consent is desired to be absolute and unconditional. In such cases, and for a very long time, Ruminations has been using a formulation saying that such consent “may be withheld for any reason or no reason at all.” We just read a June 28, 2019 Supreme Court of Texas decision possibly chastising us for wasting those words. After analyzing a contract provision stating simply that a party could not assign its rights “without the express written consent” of the other, that court wrote that the added words, “for any reason or no reason,” were surplusage. As that court wrote, consent-required provisions with or without the extra words have identical meaning. Accordingly, “the same can be said” as to a provision reading that consent “can be granted or withheld at [a party’s] sole discretion.”

Before every reader starts searching for an eraser to take to their form agreements, there is a caveat. This decision came out of the state of Texas. That’s not going to be the law in every jurisdiction. Also, it was based on the premise that a provision, in an oil and gas “farm-out” agreement saying that one a party could not assign its interest without the other’s consent, is “unambiguous.” [Viewing Wikipedia would tell you that “a farmout agreement is an agreement entered into by the owner of one or more mineral leases, called the ‘farmor,’ and another company who wishes to obtain a percentage of ownership of that lease or leases in exchange for providing services, called the ‘farmee.’”] When a court decides that an agreement’s provision is not ambiguous, it refuses to look outside of the agreement itself to aid in interpreting that provision. It accepts the “plain meaning” of the words. At most, it will refer to a dictionary of its own choice, sometimes, as Ruminations, has noted, one with a definition that supports an already decided conclusion. What a court won’t do is to look at prior discussions or negotiations to aid interpretation. [Read more…]

Print

Is The Next Landlord Liable For The Brokerage Commission?

Print

We’ve always been a little murky as to whether a successor landlord always becomes obligated to pay renewal commissions to the original broker responsible for the presence of an existing tenant. After all, there is no actual agreement between that later landlord and the broker whose original commission agreement calls for the payment of a renewal commission. The broker can’t point to where it and the successor landlord “shook hands.”

But, it is pretty common for leases themselves to include provisions such as: [Read more…]

Print