Machinery and manufacturing companies sometimes get involved in litigation with suppliers, distributors, and customers. In such cases, who wins or loses typically comes down to the contract documents. If the documents support your company's position, there's a good chance you will win. If they do not, well, maybe it's time to think about a settlement.
Business people often have some pretty fundamental misconceptions about contract documents. Some of these misconceptions include:
In commercial cases, most courts are also not going to be very receptive to the argument that one party forced the other party to take its terms. A court is probably going to conclude that the other party could always have walked away, but instead took the terms as offered.
Finally, a court is not very likely to use the commercial context of a deal or business relationship to contradict the express terms of a contract. If the terms are a bit unclear, or if particular trade terms need to be explained in light of meanings in a particular industry, then many courts will consider that. However, in my experience, very few courts are going to use context to override the express terms of a written contract.
Remember that the judge deciding the case went to law school. The judge is most likely to look at the situation like a lawyer, not as a business person. Further, judges are bound to uphold the law. Although there are always exceptions, if the provisions of a contract are clear, they will usually be applied as written.
What does it mean? Pay attention to the terms and conditions up front. Know and understand the business and legal risks your company is assuming before signing the contract or taking the order. Sometimes, the best approach is to walk away (you may be surprised how saying "no" will sometimes result in more flexibility from the other side). The contract documents can either protect your company or create unnecessary risks, but do not ever believe they are meaningless.
Business people often have some pretty fundamental misconceptions about contract documents. Some of these misconceptions include:
- "All that stuff is just legal mumbo jumbo. It doesn't mean anything."
- "No judge is going to enforce that boilerplate when the other side would not negotiate and told me either to take their terms or walk away from the deal."
- "All of this legal stuff has to be considered in the context of the overall business deal."
In commercial cases, most courts are also not going to be very receptive to the argument that one party forced the other party to take its terms. A court is probably going to conclude that the other party could always have walked away, but instead took the terms as offered.
Finally, a court is not very likely to use the commercial context of a deal or business relationship to contradict the express terms of a contract. If the terms are a bit unclear, or if particular trade terms need to be explained in light of meanings in a particular industry, then many courts will consider that. However, in my experience, very few courts are going to use context to override the express terms of a written contract.
Remember that the judge deciding the case went to law school. The judge is most likely to look at the situation like a lawyer, not as a business person. Further, judges are bound to uphold the law. Although there are always exceptions, if the provisions of a contract are clear, they will usually be applied as written.
What does it mean? Pay attention to the terms and conditions up front. Know and understand the business and legal risks your company is assuming before signing the contract or taking the order. Sometimes, the best approach is to walk away (you may be surprised how saying "no" will sometimes result in more flexibility from the other side). The contract documents can either protect your company or create unnecessary risks, but do not ever believe they are meaningless.
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