Can you make a list of the institutions or people who employ “Make ‘em up as you go along” rules? To get the thinking process going, try bank tellers or low-level government employees. E.g.: Teller: “You need to include your middle name in the signature used to endorse that check. It’s a bank rule.” You: “But, that wouldn’t be my signature. I don’t sign my name that way. That’s my rule.” Who wins?
Someplace in the annals of U.S. Supreme Court decisions is a statement to the effect that long after the need for a law has expired, we find a new justification to enforce that law. We know it’s in there, and when we find the actual quote and the Justice who said that, we’ll post our (re)discovery.
So, now we’ll rant. Why do some, perhaps most, commercial lenders employ so many documents? Don’t any of the old ones (the documents, not the lenders) ever die gracefully? We have a notion, completely unsupported by any facts, that the industry suppliers of “stock” loan documents all engage in the following marketing process. They produce a grid listing themselves and three or four competitors across its top. Then, along the side, they list the 20 or so forms in their own offering with a check mark in their own column matching each such form. Their competitors’ columns are populated with a combination of green check marks and red X’s. This, of course, proves that the chart producer has the “best” loan document generating program.
Well, that doesn’t sit well with the X- ladened column holders. So, they add all of the “missing” forms to their own packages, and, for good measure, add a few the others don’t have. This infuriates each of the others, who then declare: “I’ll match that and raise you one form.” You get the idea.
Now, that’s only a start. For example, one of the documents is a “Corporate Consent to Loan” form. It is pre-printed (today, “pre-printed” means computer generated), and is on the loan document checklist. It doesn’t matter that the borrower is a proprietorship or a limited liability company. The bank “officer” MUST get this form executed. Of course, the officer (or closing agent) has no idea what is going on other than, “It’s a rule.”
Now, Ruminations knows this really doesn’t happen. NOT! (There’s our pop culture reference for today).
There are less obvious “checklist” items for which the reason for existence is known only to archeologists. Does a lender really need a copy of the canceled check for an insurance policy paid for eight months earlier even if it has a certificate saying the policy is still in effect? Doesn’t one subsume the other? Oh, yeah, each of us could make up a reason, one that starts with: “But, suppose …” We’d prefer to hear: “Oh, yeah, we don’t really need it.” [Except, it’s on the checklist and we really do need it because: (a) it’s on the checklist; (b) that’s the rule; (c) suppose we get audited: (d) no one else ever objected; (e) for as long as I’ve been here …; (f) etc.]
Isn’t there a rule that rants don’t have to be orderly and organized? So, here’s a related one. Ask, “Why do you need this?” and get this answer: “Because that’s our rule.”
While we are on a tear, is there a rule that once a new form is created, it can neither ever be eliminated nor integrated into another document? There must be.
At a time when a corporate filer was no longer required to stamp or emboss its seal on its federal tax return, the form still had a place for those filers who still wanted to show off their seal. Today, one will still find lenders (and others) who insist upon the placement of a physical seal on documents that don’t otherwise require one. [The word “seal” alone does the job in the limited circumstances where a “seal” has a legal implication.]
Apparently, it is easier (safer) to add than to delete. Do form documents ever get any shorter? Almost always – no. Kudos to those enterprises that periodically step back and revisit theirs, few as those enterprises may be in number.
Well, Ruminations is a rule breaker. Rants are required to be long and rambling. Today, we just rambled but have kept it short (for Ruminations, that is). We only wanted to light some kindling for our readers to benefit from as they throw their own wood on the fire. Join us in today’s rant theme by posting a comment.
Our last thought for today is that making up rules as you go along isn’t all bad. Take “Calvinball” for example. What is that? Click: HERE or HERE to find out.
Today, we begin with a French lesson. The French word, “renvoi,” means “to return,” in the sense of “sending back.” In law, “Renvoi” is a doctrine, and what follows is why you’ll be pleased to know that.
After punishing loyal readers over the last two weeks with a two-part, 4,704-word exploration of rice, Oriental cuisine, and (yes) tenant exclusives, we will now retreat to a relatively simple, unconvoluted posting. It will be short. But, wise readers will want to look at a few sentences buried inside the boilerplate of their form agreements – leases, guarantees, and so forth.
Several Ruminations blog posts over the years have posited that many of us, this writer included, don’t listen very well to what the person on the other end of the deal is actually saying. We already know what we think we ought to know and, certainly, that person, a/k/a “our adversary,” is only seeking an advantage over us. We don’t even play a purely intellectual game by taking the other side’s “position” in our head and rolling it over (and over). We’ve even seen this, more than a handful of times, when that other person is really trying to help us avoid a mistake. An appropriate word for this might be “hubris.” That means excessive pride or excessive self-confidence. According to one source, in Greek tragedy it means “excessive pride toward or defiance of the gods, leading to nemesis.” That same source lists these synonyms: “arrogance, conceit, conceitedness, haughtiness, pride, vanity, self-importance, self-conceit, pomposity, superciliousness, feeling of superiority.” While we are at it, that still same source defines “nemesis” as: “the inescapable agent of someone’s or something’s downfall.” 
A 25-page court decision out of the Supreme Court of British Columbia has triggered today’s blog posting. The decision describes a convoluted, time-extended, back-and-forth negotiation over a set of interrelated, broker-prepared offers to buy and sell. In that marketplace, such documents signed by the offering party and “accepted” by the other one become “contracts of sale and purchase.” The back and forth with these documents began in early February, After a number of handwritten changes and the addition of a couple of pages, they were finally “accepted” in late July.
We’ve stolen our title from an article (or possibly it is a blog piece) dealing with the same concept but in a completely different field of endeavor. It wasn’t even about anything objective. But, its title and subject matter got us thinking about just what its author was discussing: that is “who should bear the risk?” We wrote about this a long time ago and, at the time, thought we had written a definitive piece on the subject. Now, we know we had not. Neither will be today’s posting. [For those intent on visiting the past, here’s a link to our 2013 rambling: 
We’ve been doing Ruminations since 2011 and yet this is the first time we’ve deliberately done a multi-topic blog posting. Generally, when we choose a topic (400+ thus far) we dig in and treat(?) our readers to several pages of our ramblings. That approach has precluded our covering simple or easily contained topics, ones undeserving of deep drilling down. So, today, for the first time (but, perhaps not the last), we present a little of this and a little of that.
Let’s get out in the world. Let’s leave our silos. Let’s break through the real estate bubble. What is Ruminations babbling about? Real property law is not an island unto itself. It is part of the entire body of law. Yet, even those few of us who search for “real” law don’t often look at what courts say in other areas. There are things that can be learned by leaving the real estate tent to see how the rest of the (law) world lives. Today’s blog posting could show why we need to take such strolls. It describes a court decision about how to interpret a seemingly unambiguous trust document. There’s a story behind it and here it is.
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