Contracts and the Law
In a succinct blog, Ken Adams reminds us of the importance and the limitations of the law when it comes to its role in contracts.
The summary Ken provides is important because it illustrates the many things that the law does not do – and by deduction, things that you cannot assume a trained lawyer will address (though of course some will). The law does not impose any duty of common sense or good business judgment. It does not create a duty of clarity. It does not mandate that records or understanding must be complete. In other words, the law is all about making judgment based on established principles of equity and legality.
Ken’s observations reinforce the point that a traditional lawyer is but one stakeholder in the process of constructing a contract. They bring invaluable, but narrow, perspective and insights, largely focused on ensuring enforceability of rights. Of course a business may choose to expand this role and demand that its lawyers also apply wider skill and knowledge – but then it must be clear about that scope and what it considers ‘success’ will look like. Often, the role and expectations of the law department are extremely vague and depend on the perceptions and whim of the individual attorney.
This confusion helps no one. Lawyers are frustrated because they feel that the business people are abdicating responsibility for making business judgments. The business people are frustrated because they feel the lawyers are reluctant to give expanded opinions. Once upon a time, the list in Ken’s blog was a good reflection of the type of contract review lawyers would undertake. Today, they engage far more – but too often in an unpredictable way; and that helps no one.