Put The Scalpel Away. Document Factories: Legal Doom or Legal Boom?

               Sooner or later we all go under the knife.

               The gall bladder decides to imitate a fist-sized sandspur in your gut. That hernia painfully reminds you much too late that there are people who charge reasonable rates to move that leather sectional into your buddy’s third floor walk-up. The tired rotator cuff from your glory days slinging curve balls keeps you awake at night once too often. You spend a week in Aspen on crutches after that knee ligament twangs and snaps like a guitar string on your third turn off the gondola.

              

               It happens.

               Now imagine this: After your misfortune you swallow a handful of ibuprofen, throw a bag of frozen peas at the pain and settle down in front of the laptop or, okay, your ipad. Hospitals and doctors are way too expensive, at least that’s what your aunt’s brother’s mechanic tells you. Why not see if there is a website that sells self-surgery kits?  You know, for one low price (certainly less than those rich doctors must charge) you get a few step-by-step directions, a scalpel, a little gauze and surgical tape and a handful of antibiotics and pain meds to get you through two or three days of post-op agony. For a few extra bucks a doctor you’ll never meet who is in a location you’ll never visit will look over the pre-op and surgical procedures designed specifically for you … oh, and for anyone else who happens to have an angry gall bladder. Heck, you can even call her before you slice your flesh, just to make sure you’re clear on the procedure and to let her remind you that you are saving yourself so much money. Thanks, come back again!

               Farfetched?  Perhaps, but good people with noble intentions do essentially the same thing every day with what is more often than not the biggest investment of their life: their company.

               Granted, it ain’t brain surgery but the crucial importance assigned to the legal sufficiency, relevance and resilience of the documents and contractual provisions one puts in place to govern a company or an LLC cannot be exaggerated. And every company is different, with unique owners, varying revenue streams and infinite options related to management and shareholder powers. This arena is simply no place for rubber-stamped cookie cutter documents to be shoved down the collective throats of a widget manufacturer in Idaho, a restaurant consortium in Vermont and a plumber in Florida.

               The proliferation of legal document “form factories” on the internet, where you answer a few questions, fill in a few blanks, pay a few hundred bucks and pray the house of cards doesn’t topple, all done in the time it takes to eat a sandwich, may end up spelling Legal Doom to business owners in the long run. And then whom do you blame? The faceless “lawyer” from parts unknown that you email chatted before hitting the “I Agree” button on the terms and conditions? Did you even read those terms and conditions?  But no big deal, right? It’s only your company.

               One such “service” proudly promises to provide you with “a personalized operating agreement.” Well, thank the Lord! When you’re paying good money it is definitely way cool to actually have your name on the agreement, I mean right? And they promise that the LLC or corporation documents will have “provisions to protect your personal assets.” Phew!  But wait a minute … Duh! Would a shareholder want it any other way? Isn’t that why Mr. Business Owner wants an LLC to begin with? Hello?

               Now, cynics (none of those here, of course) may speculate that these faceless form farms present a potential Legal Boom – a true opportunity – to real, live and breathing brick-and-mortar sit-and-talk answer-your-questions lawyers, lawyers with an enthusiasm and a dedication to hands-on professional service and the client’s personal and corporate asset protection.

               And those cynics would be correct.

               So throw the frozen peas back in the freezer, put the scalpel away and connect with a lawyer you can look in the eye. Bring along the cookie cutter documents, too. We’ll have plenty to talk about.

               All the best.

               Bill Yanger

$1.5 Million For Texting? That Is Awesome, Dude

               If your life is anything like mine, you were forced into text messaging kicking and screaming.

               Dexterity in my thumb and fingers was never honed by endless hours on a couch with an X-Box controller playing Madden or Mortal Combat. I would look at my phone’s key board and then at my fat thumbs and simply shake my head in surrender.

               But I quickly learned that if I wanted to communicate with my three kids (none of whom are kids anymore…) easily or, in reality, at all, I had better get with the program. Predictive text still haunts me but I’ve learned to thumb my way through “how was ur day?” as clumsily as the next old guy. I’m not quite at the point of texting my daughter across the dinner table (she’s tried), but I do communicate primarily by email with my paralegal Kate a few steps from my office door and keep up with friends and colleagues on social media messaging. Perhaps the clearest sign of my submission to the inevitable is that I have come to dislike the drudgery of checking voice mail. Remember voice mail?

               Yes, between email and texting and IM and social media messaging in its varied forms, the number of ways to communicate without ever actually speaking is astonishing.

               And it can lead to big problems when combined with continuing contract discussions.

               Just ask the parties in CX Digital Media, Inc. v. Smoking Everywhere, Inc. a recent Florida case in which a few seemingly off-the-cuff and quite informally short instant messages were deemed contract modifications. The instant messages…err… contract “modifications” cost Smoking Everywhere, Inc. $1.5 million buckaroos, enough dough to take this texting, IMing, emailing and messaging stuff seriously in your business dealings.

               Essentially, much of the dispute focused on what had been negotiated as a cap on sales commissions contained in the initial contract. However, during an otherwise benign instant message exchange between representatives of the parties, the CX rep mentioned, “We can do 2000 orders/day by Friday if I have your blessing.” This was ten times the 200 per day order cap on which Smoking had agreed to pay commissions. But when the Smoking rep replied saying, “NO LIMIT,” CX was obviously jazzed and responded with “Awesome!”

               And like that the contract was modified.

               There were additional and complex legal issues playing a part in the Court’s ultimate determination but the message (pun intended) is this: any communications between contracting parties may potentially be considered modifications to the original agreed terms. Just because you are not sitting around a massive cherry wood table in some glass tower conference room, lawyers in tow, does not mean your text or email won’t be considered a contract offer or counteroffer or an acceptance of either.

               So text until your thumbs get blisters but be careful. Words matter.

               All the best.

               Bill Yanger