Small Business Contracts

Rob Kern — Tue, 17 Apr 2012 18:14:26 +0000

When a business client comes to me with a problem, about 80-90% of the time, the problem has to do with enforcing or defending a contract. The conversation usually goes something like this:

Him – “We had agreed that he would provide 1000 units per month, but now he’s not complying.”

Me – “So where is that in your contract?”

Him – “He said we didn’t need to put it in there because we agreed on that part orally.”

Me – “Why didn’t you have a lawyer draft your contract?”

Him – “Lawyers are too expensive.”

Me – “They are if you hire them only after the dispute arises.”

Over and over, I meet clients who have a dispute that would never have had to go to litigation if their contract or their standard forms had been drafted properly. When you’re considering whether to hire a lawyer to do the work, or to save money by copying a form off the internet and filling in the blanks, first consider how much of your business’s money is going to be affected by this agreement or form; will the sales contract cover the sale of $80,000 a year of merchandise sales? Will the terms you put into your standard forms govern 90% of your business’s transactions? In those cases, it may be worth it to pay an attorney a few hundred dollars to draft a form, or a few thousand to draft a complex contract.

Its true that legal fees can add up and can get expensive, but in my entire career, I’ve never had a dispute arise where the legal fees for making the contract right in the first place wouldn’t have cost a tiny fraction of what the legal fees for the dispute eventually cost. There are some situations where something may be so inconsequential that you really don’t need an attorney to do the work, but if the consultation is free, why not get the attorney’s opinion on it first, and make it an informed decision?

I may make less money that way, but it makes me happy when my clients don’t suffer.

BOA Short Sales

Rob Kern — Fri, 13 Apr 2012 07:01:34 +0000

I recently had an experience with Bank of America that really highlights why regular homeowners feel like they can’t accomplish anything with the banks. A while back I submitted a short sale to Bank of America for approval. I used the standard online system they prefer, but it gave me an error message indicating it had to be entered manually. So I called them up to do it manually, and was told that no, this submission does not need to be done manually, it has to be entered in the website. I invited him to try it himself, and he discovered that I was correct, and agreed to enter it manually. After that I was to wait for a negotiator to be assigned. I called back after the proper time had passed, and one had not been assigned, so I requested a priority, and they assured me one would be assigned in 48 hours. I gave them an extra day and called back the third day. Still no negotiator. So I put in a higher priority request, and was assured that this would go to upper management, and would definitely be done in 48 hours. After 3 days I called back again, and still no negotiator. So I put in a third request, which was ultra-high priority and they swore that it was of such high priority that nothing would stop a negotiator being assigned in the next 48 hours. I gave them a week this time, and called back. Still no negotiator. At this point I had some words with them, and was promised that this time the request would go directly to a vice president. Well finally I heard back. No, a negotiator was not yet assigned, it was a message from the vice president telling me that the delay was my fault for entering the short sale manually, instead of online, on their website that wouldn’t accept the short sale. He then promised a negotiator would definitely be assigned really soon.

I think about this kind of situation happening to me, an experienced real estate attorney, and wonder what regular homeowners are supposed to do when dealing with these guys. Every time I do a homeowner workshop that has a bank representative speaking there, they tell everyone that they don’t need an attorney for anything; the bank will work with them and give them all they need, but over and over I see them prove otherwise.

I’ve recently made plans to attend Bank of America’s shareholder meeting in Charlotte this May. I have some things to say to them.

KernLawOffices.com

Small Business Contracts

BOA Short Sales