A recent Missouri court case has prompted me to revisit attorneys’ fees provisions in contracts I draft and negotiate. The case, Midland Property Partners, LLC v. Watkins, doesn’t break any new ground, but it reminded me how important the language can be.
Even before reading Midland Property, I’d had attorneys’ fees provisions on my mind. Under the “American Rule,” which is followed by courts in Missouri and most of the rest of the U.S., the parties to breach of contract suits have to pay their own attorneys’ fees — even when they win the case. As a practical matter, this means that it’s often uneconomical for a party to enforce its contract because it’ll still have to foot the bill for its lawyers. I’ve advised a number of clients who’ve had to make the decision to sue or not to sue, and the inability to recover enforcement costs really affects the calculus. [click to continue…]
Imagine a world where continuous improvement is the norm. Where ideas are tested and only the best ones adopted. Where inferior practices are discarded in favor of better methods.
This is Ken Adams’s vision of the world of contract drafting.
Ken is the author of The Structure of M&A Contracts as well as numerous contract-drafting articles that have been published in prominent legal journals and magazines. He also publishes the popular blog Adams on Contract Drafting (previously published as The Koncise Drafter, which I reviewed in The Reading List). Plus, he lectures at Penn Law School, conducts seminars around the world, testifies as an expert witness, and is the founder and president of Koncision Contract Automation, which I reviewed in Koncision: One Giant Leap. Readers of this blog know that I’m a big fan.
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In a fun little experiment recently, I set up a question on Quora, “What’s the best anti-assignment provision in a contract ever?”, and invited people to submit clauses for the crowd to vote on.
Of course, asking what’s the best provision ever is a bit of a trick question, because the answer depends on the contract in which it’s to be used. For example, in a short and sweet agreement, you might want to go for minimum viable legal protection instead of a more full provision. Two of the players submitted answers along those lines. Here’s an example, which was submitted by Dana Shultz: “Neither Party may assign any of its rights or obligations under this Agreement without the prior written consent of the other Party.” [click to continue…]
Monday night I put the following question to Bill Carleton in a comment to an older piece on his blog:
Bill: I revisited this piece because I’ve been thinking about your discussion with Ken [Adams] about whether the benefit of contract standards lies in increasing quality vs. increasing transaction efficiency/lowering costs. Commoditizing contract drafting should drive down costs significantly, whether your aim is lowering costs or increasing efficiency.
But why does the cost of basic legal documents need to be zero, even for startups?
You can read Bill’s response here and my response to his response here.
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