Trumpism hits the law of contract 
Tuesday, July 24, 2018
Justinian in Big Law, Contracts, Donald Trump, Dorothy Says ...

Blustering letters from the other side ... Ramped-up outrage ... No more yelling "snap" ... Sacrosanct clause in contract written by PR people ... Irrelevant aspirations ... Dorothy rapped on the knuckles 

I'VE woken up in hell.

Trumpism has permeated the practice of law. 

A client received a letter the other day from the other party to its very large contract. The letter said, in effect, "We're not going to perform the contract. It can't be done. Therefore we don't have to do it. And how dare you ask us to". The letter was drafted by lawyers.

The other party wasn't suggesting that there had been some kind of intervention by God which rendered their obligation unachievable. They'd just worked out they couldn't do what they had promised to do for the price. So they weren't going to do it. Unless my client paid them more money.

The letter was replete with outrage and blustering vigour. It finished with something like, "You are despicable, a coward and dishonest". I could almost smell the pomade in the orange hair. 

When I was growing up, I was given to understand that the fundamental premise of contract law is that if two people promise each other they will do something - build a power station, say, in exchange for $1 billion - then a court will enforce that promise. It's pretty important. Western capitalism, indeed the global economy, was built on the notion that if you promise to do something, you can't welch on the deal. 

So, I was taught that you should never write to the other party to a contract saying your client won't do what it promised to do. Because if you do, your client might get sued. And so might you.

For those reasons, when I was a girl, I would have rejoiced in receiving that letter. I would've run down the corridor waving the letter triumphantly, yelling "snap", and drafted a letter threatening all sorts of dire action we would take in the court. And the client would have sent the letter. And the other party would have put its tail between its legs and done what it promised to do.

But I was a girl a long time ago. 

These days, I know there's no point writing a letter like that. The client won't send it. In fact, the client probably won't make the other party perform the contract.

The client will renegotiate the contract, to provide for the lesser set of things the other party says it will do. Until the other party realises it can't do those things either. And there'll be another renegotiation. Eventually, the power station the client was hoping to get, will be a turbine powered by a monkey on a bicycle. Which costs $1 billion or so.

Oh well. I guess it will be environmentally friendly. Depending, of course, on what they feed the monkey.

It's not just blustering outrage that has taken over the practice of contract law. PR people are making incursions as well. 

I reviewed a contract recently before it went out to tender. Clause 1 went for three pages and said pretty much nothing, except the bit that said that, in its every endeavour and its every thought, my client would consider what was in the best interests of everyone. Everyone in the world. Because my client is benevolent and good, the clause went on, it showers poor people with gifts. Hang it, because it is egalitarian, my client showers rich people with gifts. 

I put a line through the clause. Eradication of the clause would serve two purposes: reserve the client's right to do things like, um, I don't know, enforce the contract, and remove three pages of guff which were surplus to requirements, thus reducing the page count.

"You can't remove that clause," said the client. "It's sacrosanct."

It turned out the clause was sacrosanct because the client's public relations people had written it. It was the client's vision statement and, by CEO decree, had to be in everything the client issued, including contracts for billions of dollars which might one day be before the High Court. 

It was a terrific vision statement. It was very long, and contained a commendable, but unachievable, not to say unintelligible, and irrelevant, series of aspirations. 

My advice suggested that the vision statement would be better on the wall beside the lift, rather than an expression of legally binding promises. 

I got a rap over the knuckles for harbouring seditious thoughts.

It's staying in. I suppose it doesn't matter. In a few months we can revert to blustering outrage and say we aren't going to do it.

Article originally appeared on Justinian: Australian legal magazine. News on lawyers and the law (http://justinian.com.au/).
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