Surprisingly, legal agreements don’t always mean what you think they do. Sometimes they can mean something completely different – or even the exact opposite – of what you expected.
In a recent matter, a retailer planned to joint venture with another company (for the purposes of this discussion, let’s call it Company B) to franchise their business throughout Australia and overseas. Company B produced a non-disclosure agreement for both organisations to sign before they disclosed their confidential commercial information to each other.
When we reviewed the document for the retailer, we found that it was the exact opposite of what it should have been. It would actually have disclosed rights that neither party wanted to give the other. Consequently, the document would have been worse than useless.
How could the agreement (which was drafted by lawyers) be so wrong? Regrettably, the answer has to be incompetence on the part of the lawyers, who simply didn’t understand the effect of what they wrote.
Unfortunately, this isn’t an isolated case. In fact it’s one of many problems created by incompetent lawyers, which Tyler & Co have come across and had to spend time fixing.
In another case, a property developer gave a prospective investor a ‘property management agreement’. The agreement was supposedly meant to advise purchasers on how the development would be carried out and managed. However, once we waded our through the document, we soon found that it was so badly drafted that it did no such thing and in fact served no useful purpose at all.
So how would the investor know the way the development would be managed, what to expect and when? Based on that agreement, they wouldn’t and being in the dark about such things as an investor could be disastrous.
The frightening thing about both examples is that many people sign documents simply because ‘they look like legal documents’, the other party ‘says the documents are required’ or “I didn’t really understand what it was for” (even though they have read them).
The inevitable conclusion is that, no matter how simple or ‘standard’ an agreement may appear to be, it pays to have it professionally reviewed by a reputable lawyer before you sign it. The relatively small cost of doing so would likely be a fraction of the cost of resolving a later dispute stemming from a badly drafted or underhanded agreement. Contact Tyler & Co on 02 9966 1799 today for professional advice that saves you money in the long run.
