Sometimes All You Have To Do Is Ask

As a matter of policy, I do not give any legal advice in response to questions posted as comments or otherwise in this blog.  However, the following question piqued my interest and provides a platform for discussing the sort of everyday problem an average person might encounter.  The question was:

I have a fear of dentists and have neglected my teeth for years. The pain is so great in a few teeth that I finally broke down and went to a sedation dentist. They examined me and came up with a proposal to fix my entire mouth for the sum of 13,000.00, and finance it. The financing would result in the final total being 18,546.00 from GE Money Bank. Never heard of them. After having a day to crunch the numbers, the 309.00 payment over 5 years was going to be difficult. My girlfriend is willing to pay the dentist the 13,000.00 in cash, but I’ve signed a contract stating that I agreed to the 309.00 payment for 5 years. The contract was signed Friday afternoon, the first session is scheduled for Monday (08/02/10). Can I rescind the contract and simply give the dentist cash, rather than incur all that interest? What are my choices? No work has been done on my mouth as yet. My dentist would be happy to get paid the cash, but the contract that was signed would probably have to still be honored. How could I cancel this contract?

Am I stuck with the ridiculous interest payments and the grand total of 18,546.00? 

First, congratulations to the reader for realizing that he has a signed contract that may be valid.  You would be surprised how often clients come into the office having  just signed a contract for the purchase of real estate for many hundreds of thousands of dollars and say:  “I just signed this contract.  Can you look it over and tell me if it is okay?”  It is too late to have your lawyer look over a contract after it is signed.  At that point, if you have all the requisites for a valid contract, the damage is done.  So that is lesson number one — have your lawyer look over contracts before you sign them and not after.

Second, the contract is between GE Money Bank and the reader.  It is not between the reader and the dentist.  Nevertheless, the dentist is still the key to backing out of the contract at this time.  By the way, the GE in GE Money Bank stands for General Electric and it is a major consumer finance company.

Finally, I think the key to the reader’s problem is simple — just ask.  On Monday, he should walk into the dentist’s office a little early and offer to pay up-front if the dentist will tear up the contract.  I bet that the dentist will be happy to tear up the financing contract and take the money.  This is especially true if he just signed the contract on Friday.  Most likely it has not been submitted to GE Money Bank yet and no monies have been advanced to the dentist.

All is not lost if the dentist will not tear up the contract and take the money.  If that is the case, the next step is to read the contract.  Interest is charged for use of money over time.  The $5,546.00 interest charge is based on the use of the $13,000.00 for three years.  If there is no pre-payment penalty in the finance contract, then the $13,000.00 can be paid at any time and the interest due after the date of payment avoided.  Even if there is a pre-payment penalty, it is likely to be much less than $5,546.00.

I am often surprised by how often someone will come to me for a “legal” way out of a situation when they have not even tried to talk to the other party.  Sometimes the solution is as simple as asking.  I will bet that is the case here.  But, if not, the next step is to read the contract and see if anything in it can be used to your advantage or keeps you from doing what you want to do.  In this case, as with most finance contracts, it probably can be prepaid and some money may be saved.

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Hiring A Lawyer Is Not As Expensive As You Think

Here are six good reasons for why hiring a business lawyer is money well spent:  6 Reasons Why Hiring A Business Lawyer Is Not That Expensive. As someone who litigates disputes, I can say that litigation is much more expensive than doing it right in the first place.

O’ the Shame of Legalese!

   I try to write as much as I can in plain English.   As a lawyer, that isn’t always easy.  Lawyers use five words with five syllables where a single two syllable word would do for many reasons — They don’t know any better; i.e., that’s the way it has always been done. They’re afraid they’ll miss some nuance or meaning.  They’re lazy or their client won’t pay for better; i.e.,  the form they used as a template was written that way or the client won’t pay for a decent revision. (I want a lease tomorrow and I want it cheap.) They think it makes them sound like a “real lawyer.”  Other lawyers will criticize them and accuse them of being a poor lawyer if their writing isn’t impenetrable.  Sometimes it is an artifact of the negotiation process with each side adding words to “spell it out a little better” or to “clarify a point.”  The end result is a morass that is neither spelled out nor clear the day a dispute arises.  Here are some particularly egregious examples from The Legalese Hall of Shame.  I’m really terrified by the thought of a four page 1,000 word sentence.  Is such a thing even possible?

I believe that impenetrable legalese creates more problems than it solves.  It can actually breed litigation when documents are so lengthy and ambiguous that they can be read a dozen different ways.  It may take a third party in the form of a judge or jury to decide what it means, and they may not agree with the litigants.  More on this tomorrow.

I Vant That In Blood But Vith A Peppercorn!

Here’s an interesting article about a promise written in blood and Korean.  The dramatic touch of writing the promise in blood did nothing to enhance the enforceability of the promise.  The trial court ruled that there was no consideration for the promise to reimburse the other party’s investment losses.  Consideration is required for a validly enforceable contract. That is, each side must exchange something of value in exchange for the promises of the other.  However, the legal maxim is that a peppercorn can be adequate consideration, which is a colorful way of saying that very little consideration is required.  The case is now on appeal.

The Law Religion Culture Review blog has posted the entire verbatim contents of the appellate brief online.  The gist of the argument is that the consideration from the party who lost money was the “forbearance of suit.” That is, he could have filed suit immediately but agreed not to due to the promise of repayment.  Forbearance of suit is also recognized as adequate consideration for a contract in Florida.

The lesson here is to skip the dramatics and write your agreements in ink not blood.  Whether your agreement is enforceable will ultimately depend on whether you remembered the peppercorn and not whether you gave an ounce of blood in the drafting.

Get It In Writing AND Make It Clear

I was listening to a podcast of a speech recently when the speaker said something such as “Lawyers always say, get it in writing because then there is no doubt what you meant. You can’t argue with what’s written.” It was like nails on a chalkboard to my ear. The naivete! Only a non-lawyer could say that getting an agreement in writing ends all disputes.

You should get any important agreement in writing.  Without a written agreement or understanding, there can be wild variations and disagreements as to what was said or agreed upon.  However, getting it in writing won’t eliminate all disputes.  A written agreement will certainly reduce the chance of a dispute and eliminate many areas of dispute, but no agreement is ever perfect.

Even with a writing, disputes can arise in a variety of ways.  Unforeseen circumstances or events can arise leading to a disagreement over whether and how the agreement covers that situation.  A carefully drafted agreement may nevertheless contain language that is ambiguous in retrospect or in actual practice although it seemed clear at the time it was written.  Problems can even arise when a document is overwritten in an effort to address every single potential contingency.  A whole body of law deals with how contracts are to be interpreted.  For example, it is a well recognized legal principle that ambiguities in writings are construed against the drafter of the writing.  This body of law has developed because even written agreements aren’t always crystal clear and can require interpretation.

You must be careful not only to get it in writing, but to make sure that the writing is clear.  Say what you mean and mean what you say.  Merely getting it in writing alone is not always enough.