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LEGAL VIEW / JEFFREY S. KLEIN and LOUIS M. BROWN

Make Pact to Put Deals in Writing

March 05, 1992|JEFFREY S. KLEIN and LOUIS M. BROWN | Klein is an attorney and president of The Times Valley and Ventura County editions. Brown is professor of law emeritus at USC and chairman of the board for the National Center for Preventive Law

Some of the letters we receive ask us about rights when a deal goes sour. A common complaint is that the other party made promises that were not kept.

What can and should you do in the face of empty promises? Of course, you can always sue, but lawsuits are frequently not the best way to go, for any number of reasons. They cost time and money. They are unpredictable. They are exhausting. You may lose more than you gain. You may get sued by your angry ex-partner.

One of the basic reasons lawsuits are chancy is that the testimony of the parties varies. Everybody has different recollections of what was said or done. Crucial facts may be forgotten. And--surprise--some people lie, even on the witness stand. Imagine how difficult it may be for a judge or jury to determine the truth.

Here are some suggestions that may help prevent problems before they occur.

Try your lawsuit before there is one. Clearly agree on what was said or done before you make a deal. That sounds easier than it is. Many deals are oral. And while many oral arrangements are legally effective, it's best to have a written record to support your version of the oral agreement.

Oral contracts for the sale of goods worth $500 or less are valid. Oral leases or rental arrangements from month to month, or leases for a period within a year from the date made, are legally enforceable.

But avoid legal pitfalls--put your agreement in writing. If nothing else, prepare your own memo of what was said and keep it. Or go a step further. Send a copy of the memo to the other party. Of course, that does not necessarily bind the party under the law, and it may bind you, but chances are that if the memo includes unacceptable items, the other party will try to correct any misunderstanding.

Two legal rules help here. When parties reach agreement, and the written agreement is signed by only one party, that party may be bound by the promises contained in it. And part performance of an oral agreement sometimes makes the agreement binding.

If the agreement is in writing, look it over carefully to see if it includes the promises you desire. Often, arrangements are based on representations and promises about what will be done, but the agreement may fail to mention them.

If, for example, you purchase a gift for a friend and you want the friend to have the right to exchange it, it is a good idea to put the right to exchange in writing. Or if you are purchasing an item to be delivered in the future, the writing should say when it will arrive and what happens if it is not delivered--perhaps a right to cancel without cost. If a landlord promises to do repairs before you move in, get it in writing.

Review carefully what led you to make the agreement. Why did you select this person or company? What do you expect to get out of it? Was there something in an advertisement that led you to make the arrangement? How long do you expect it to last?

These are some of the questions a lawyer might ask, and they are ones you can ask yourself. They may reduce the chance that you won't get what you want. And if a deal doesn't pan out, you may have eliminated some of the problem areas.

All of this may not seem important because most deals are kept. It is unusual for deals to go sour. But--wouldn't you know it?--that's usually the time you forgot to take these precautions.

Klein is an attorney and president of The Times Valley and Ventura County editions. Brown is professor of law emeritus at USC and chairman of the board for the National Center for Preventive Law. They cannot answer mail personally but will respond in this column to questions of general interest about law. Do not telephone. Write to Jeffrey S. Klein, The Times, 9211 Oakdale Ave. , Chatsworth, Calif. 91311.

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