PAY ME NOW OR PAY ME LATER

By David McCarthy

You don't need a well-written contract when everyone is performing as agreed. You need it when things change for the worse. Everything is always changing, of course, and all too often changing for the worse.

A number of matters that have come into the office lately have driven those points home. In one case, a client dealing with a known rascal preferred to sign off on an agreement that was virtually drawn on a cocktail napkin than to pay an attorney a few bucks to "rascal-proof" the agreement. It was only a matter of time before the rascal did what rascals do. The client has paid far more to keep the rascal in check and the effectiveness of those efforts is much harder to measure than would be so had a well-written contract been drawn at the start of the relationship between rascal and client.


In another case a group of would-be partners had the good sense to commission a well-drawn contract on the front end. Their objective was to share gains and losses equally.

That seems simple enough, doesn't it?

Imagine several boys with paper routes who meet in their tree house and deposit their collections in a coffee can. At the end of the month, they count out the money in the can and divide it equally.

What could go wrong with that?

Not much if they are all delivering the same newspaper to the same number of customers, achieving the same rate of collection, depositing every dime they agreed to deposit; and if no third parties have any claim on the money in the coffee can (e. g., the Internal Revenue Service, the Illinois Department of Revenue, the Illinois Department of Employment Security, spouses, children, dependents, and all the rest of it).

Since the would-be partners are grown men with lives and obligations that are a bit more complicated than those of boys with paper routes in a tree house, putting down on paper an agreement that meets the needs of all is of utmost importance and demands care and attention.