Pub. 14 2019-2020 Issue 2

NEBRASKA BANKERS ASSOCIATION 15 rights to enforce those commitments. Provisions that limit warranties, limit remedies, and limit liability can push com- mitments closer to the handshake side of the spectrum. This may be fine with a counterparty that can unquestionably be trusted to do what is right even when it costs them significant money. If not, legal niceties are necessary, unfortunately. When a party’s lawyers create a standard form contract their duty is to protect their own client. One should not be surprised if the bulk of the contract is devoted to minimizing their cli- ent’s responsibilities. Some of that will be done in a way that is reasonable, and some will not. Wherever there is leeway to decidewhat is reasonable, the lawyerswhodrafted the contract will have decided to favor their own client. To disregard legal niceties, one must trust not only the counterparty, but those decisionsmade by the counterparty’s lawyers. As trustworthy as they may be, contract lawyers have a very specific job to do and it has very little to do with trust. Also, as to the timing of presenting legal issues, key contract points can be pushed forward in RFPs. This can be a point of time whenmaximum leverage exists with a bidder who wants to win the business and when they may be most reluctant to push back. Getting a counterparty to agree to key terms in their response to an RFP can reduce the pushbacks that will occur after the sales teamperceives it haswon the business andwithdraws fromthe process to let themere formality of the paperwork be finished. Rule 2. Do it yourself Is extensive legal involvement really necessary? Contracts in the United States are typically written in English. Some terms may be complex, but you can certainly understand them if you take the time to read them carefully. You have likely read and negotiated a lot of contracts. You can decide what you are willing to agree to on your own and can doubtless do so by yourself much more quickly than involving someone else and spending time and money to communicate and collaborate with that person. Editor’snote: Reading contracts carefully is of course the catch. Contracts are written carefully and often fine-tuned over the years. Prudent review takes time (evenwhen counsel does it)— thequicker the review, themore likely somethingwill bemissed. Subtlety andambiguity exist, are oftenmore tooneparty’s favor than the other, and may well be intentional. What is not in the contract can be as important as what is. Those who write a lot of contracts are looking for these problemsmore than the aver- age reader. In addition, for all the contracts an executive may have read and negotiated over the years, it is still likely fewer than the many hundreds of contracts competent counsel will have handled. Counsel can also bring the experience of having worked with many perspectives in the marketplace, including perspectives onboth sides of the contractual fence (vendor-side and customer-side, for example) and the perspectives of the client’s peers and competitors whom counsel has also helped. Counsel’s assistance and experience may not be absolutely necessary, but has real value to offer. Rule 3. Eliminate or minimize conversations with counsel, especially at the beginning of the project Outside counsel is likely charging you on an hourly basis (in-house counsel may not be sending you an invoice, but they Counselor’s Corner — continued on page 16 Price and business terms are the reason for your contract and why it has value to you. The other side should be made to understand how important those central issues are to you. Focusing on legal terms and conditions distracts from what is most important. Asking for legal niceties slows things down and need- lessly wastes your limited bargaining chips. If you must negotiate things only the lawyers care about, hold off on them until after you have resolved everything you really care about so they don’t distract from what is most important.