Sunday, September 23, 2012

Success Story: How To “Win” Contract Disputes Even When The Contract Says You “Lose”

Contract disputes are one of the most common business conflicts that can lead to potentially expensive litigation.  With the stakes so high, you must have a lawyer help you evaluate the strengths and weaknesses of your position and that of your opponent. 
It is virtually impossible for a non-lawyer to understand fully: (i) the legal implications of contract language; (ii) the applicable law; (iii) how a court would apply that law to the specific language, (iv) what facts are relevant to your dispute; (v) when you can go outside the contract to pull in other facts to help your case, and; (vi) how to assemble those facts, law, and contract language to make the strongest, most compelling argument to get you the best bottom-line outcome.  Indeed, anybody who has ever seen the classic law school film “The Paper Chase” will recall the famous line of Contract Law Professor Kingsfield when he announces to the class "You come in here with a skull full of mush and you leave thinking like a lawyer."  Dramatic license aside, the ability to “think like a lawyer” when it comes to getting you the best result is truly priceless.  It can make the difference between success and failure; it can translate into an economic result that may be thousands, hundreds of thousands, or millions of dollars better for you.  And, even when it looks like your contract says “you lose”, the right lawyer may be able to find a way to turn that loss into a “win”, or at least keep your losses to an acceptable minimum. 

Here’s how we recently helped our clients deal with just such a situation…

Problem:  Our client hired a reputable, major brokerage company to sell his home.  After more than two years and multiple price reductions, the broker had failed to sell the home.  The brokerage company, in a transparent last-ditch effort to extract a commission from the failed listing, had its lawyer draft a letter demanding payment of the full six-figure commission under a narrow interpretation of certain language in the listing agreement.  On its face, that language, appearing in the “standard” form listing agreement, indeed appeared to support the broker’s commission demand, even though the broker had failed to sell the property.  Since the listing agreement included an attorney’s fees clause, my client was faced with the prospect of not only having to pay a hefty commission for a sale that never happened, but also the broker’s attorney’s fees.

Solution:  We started by not buying into the erroneous, but common, misconception that just because a dispute involves a “standard” form contract, published by a “neutral” trade association such as the California Association of Realtors, that language is clear and unambiguous.  The casebooks are filled with published decisions where the court is asked to decide between two or more different interpretations of form contract language.  We placed the language relied upon by the broker under the microscope and came up with an alternative interpretation that favored our client. 
We next pored through the evidence, including all of the e-mails between our client and the broker, and found enough “needles” in that haystack of correspondence to construct a defense we believed in so strongly that we were absolutely prepared to “go the distance” all the way to trial, if necessary, to fight for our client.

With such high confidence in our ability to win, we pushed for an immediate mediation to try to secure the fastest, least expensive solution for our clients and make sure we could communicate the strength and force of our position directly to the broker, unfiltered by his lawyer, and with the assistance of the retired judge mediator.  We crafted a detailed, thorough mediation brief laying out all the reasons we would win if this case proceeded to trial, making sure to give the mediator as much ammunition as possible to help get our client the result he deserved.
Within a matter of hours—instead of the months a trial would have required—we successfully settled the case with an outcome that was very acceptable to our client.  Click here to see what the client had to say (it's the most recent testimonial at the top of the page, from Ning Lim).

Lessons:  Contracts are intimidating.  Lawyers are intimidating.  Demand letters from lawyers citing form language from a contract you signed are intimidating.  Whenever you find yourself in a dispute involving a contract, whether you’re claiming money is owed to you or responding to such a claim, you must, must, must hire a lawyer to help you get the result you want as quickly, aggressively and inexpensively as possible.  Do not be penny-wise and pound-foolish.  This is not something you should try to handle on your own or with the cheapest lawyer you can find.  Often, the lawyer with the lowest billing rate can end up costing you the most money.  We don’t have the lowest or highest billing rate; but we do believe you can’t find a lawyer who will get you a better economic “bottom line” result.

Can we promise this result in every case? No.
Can we promise the same kind of tough, aggressive, swift, and creative approach to try to make you whole as quickly and inexpensively as possible? Absolutely.

If you’re involved in a dispute, come to our Firm. You’ll get the special attention of me and our dedicated staff. We’ll go the extra mile to see that you receive the result you want and the full justice you deserve. Every one of our clients is like family. They’re close to us. They know what’s going on. We firmly believe that you can’t do any better than having our firm represent you. Let us prove it to you.
If you have a dispute you’d like to discuss, please mention this blog post when you contact us and you’ll receive a free consultation (a $100 minimum value). Call 800-553-7626 or e-mail

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