Beitchman & Zekian Blog

Legal Information in Plain English

Archive for negotiation

Hindsight is 20/20

I had the pleasure of sitting in conference room with a client yesterday for 4 hours trying to settle a case during court ordered mediation.

While sitting waiting for the mediator to come back with the counter offer on the settlement, I looked at the “contract” that started the whole mess again.  It was clearly written by a non-lawyer and, since I had time to kill, I had to ask him why, if he’s got a firm of lawyers who he calls on a various other inconsequential matters, did he not call us to review this piece of paper. His response was that they were in too much of a hurry to get the deal done and start working with the Plaintiff and didn’t what to put the brakes on the deal by getting lawyers involved.

Now, I realize that time is sometimes a factor and businesses don’t want to invoice lawyers because we start nitpicking and arguing over whether it should be “and” or “or” in the sentence. Believe it or not, sometimes it DOES make a difference.  In this case, the difference between that document and the one I would have written would have protected them as opposed to opened them up to litigation.

Other times I’m told that they didn’t want to pay our hourly fee to have the deal reviewed because they thought it was fine. Well, it is until someone breaches the agreement, which is what happened in this case.  Before I could start my lecture, the client admitted that he should have had us look at that agreement, regardless of how much he would have paid.  Because now, it cost him more than $20,000 PLUS our hourly litigation fees to settle this case that could have been avoided had the agreement been drafted properly in the first place.

So, whether you are a multi-million dollar company or a small mom & pop shop, you should have an attorney review all documents you sign.  Sure there is a cost involved, but if you do your research, you’ll be able to find an attorney that suits your needs, both legal and financial.

Contractual Arbitration Clauses…Or How Charlie Sheen Got Kicked Out of Court and Into Private Dispute Resoltuion

The events in Charlie Sheen’s life have become very public, for better or worse.  Regardless of your opinion of what is going on with him, the latest legal maneuverings by his attorneys and those of his opponent have provided a topic for this blog and information that is important for anyone who has ever or will ever sign a contract.

Very few people read the agreements they are signing from start to finish, and in neglecting to do so they do not know what the terms of the agreement are when it comes to dispute resolution.  Most people assume that if the contract is breached, there will be a lawsuit; this is generally the case, however more and more parties are including arbitration clauses in the deals.  What this means is that instead of taking a dispute to court and letting a judge and/or jury decide who is at fault and who is not, it goes to a private service and they assign it to an arbitrator – usually a retired judge or attorney – who acts as the decision maker.

The pros of working with an arbitration service is that the matter is private (court proceedings are public record) and it’s supposed to be on a faster schedule.  This may or may not be true as it can take the same amount of time to arbitrate as it would to litigate.

The cons are primarily the cost.  The parties must pay for the administrative services as well as the fees to the arbitrator who is the decision maker.  This can amount in to the tens of thousands of dollars and if one party can’t pay, the others have to pony up that share.  Additionally, unless it is decided prior to the arbitration in the agreement, the parties may not have any true procedural rules as you do in court.  Further, the arbitration fees and costs do not include your attorney’s fees which will also start to add up.

Now, if you, like in Charlie’s case, decide to file a lawsuit in court when you have an arbitration clause, the opposing party will likely file a Motion to Compel Arbitration – or basically a request to send the case to arbitration per the agreement.   So, if you don’t think you want to pay a lot of money to a private company for something that you can submit to the court and not have to pay all the extra fees, you would do well to contact a lawyer at the outset to review your contract before you sign it.  Forewarned is forearmed.

Debt Settlement

With the economy lagging and many people experiencing long bouts of unemployment, it is no surprise that consumer priorities have changed.  Many people have had to deal with a reduction in salary or wages, a wage increase freeze, or unemployment altogether.  This, however, does not mean that bills stop showing up in the mail.

Many consumers need a reprieve – maybe nothing as drastic as a bankruptcy filing, but perhaps just a reduction in their debt so that it is more manageable.  You may decide to go with a debt consolidation office, however this is not always the best method as the account may get charged off and/or a negative reporting made to your credit report.

Some consumers seek to settle the matter before it gets to a collection agency; this means dealing with the bank that extended the credit in order to convince them to take less money to settle the account.  This is not always easy and, from time to time, you will have to deal with an unscrupulous agent who promises one thing and then changes the terms or conditions the settlement on a lump sum or higher payment.

To get through the slump, you may want to consult an attorney to assist you with the settlement negotiations.  Although attorney’s fees are inevitable for the service,  when $30,000 of debt settles for anything less than the total amount, paying someone to make sure it is done right seems like a good trade off.