Semester 2, Week 3: Contracts

This week I had an epiphany about the nature of contracts. I spent an entire semester laboring under a misapprehension about them, and this past week, I figured something out that has helped me understand most of what I found confusing or terrible about the subject. Now, some of you will roll your eyes after I write this and think to yourselves, “Dang, Dave is slow. I’ve known that LITERALLY FOREVER,” and all I can say to you is well, yeah. But this was new to me, and there may be some of you who find it as revelatory as I did. Here’s the big idea: The essence of a contract is NOT the document that you sign. The essence of a contract is instead the underlying agreement that you make with someone else. The document that you sign is just an attempt to codify your agreement. 

So, the relationship between the agreement and the contract is sort of like the relationship between the defendant in a case and the drawing the courtroom sketch artist makes of him. If the artist has done her job well, then you have a document that shows you what the guy actually looks like. But if the artist did a bad job and got the hair all wrong, the court will not insist that the defendant’s actual hair is wrong because it doesn’t look like the document. It’s the real fact of the world that matters, not what you wrote down (or drew).

This is a big deal for me, because there were so many instances of contracts in the cases that had clear, explicit provisions that courts later found did not really mean what they actually literally said. That drove me nuts! If, for example, the contract says in plain language that it is integrated (essentially, that it is complete), then it’s integrated, right? WRONG, BUCKO. That the document makes a claim is persuasive, but is still secondary to whether the court believes that the two people agreed to that claim. A further example may help:

Suppose I want to convince you that my pet enchilada is cute. I show you a picture of my enchilada rolling around on the rug with his tongue hanging out, and another one of him dragging his stupid enchilada butt across the carpet (which is actually super annoying, but it looks cute in photos). I make you watch a video of my enchilada chasing a stick, but then getting confused about which stick he was chasing, and coming back with some GREAT GIANT stick in his mouth that’s so big he has to hold his head cocked sideways but he’s still trying to run in that position and it’s totally ridiculous but ohmyeffinggod he LOVES that stick.

Then I tell you about how when I put my hand on the side of his huge goofy enchilada face he presses his head against my palm with such force it’s like he’s trying to become one with me; like he’s trying to push his face through my skin so we can share the same body because wouldn’t that be great and maybe that way I would enjoy chasing sticks with him instead of always standing there like a lump while he does all that sweet, sweet stick-chasing, but he cannot ever get his face far enough into my hand, so he kind of lists to one side until he pops underneath my palm and then he comes back to try it from a different angle. And after all of the stories and photographic and videographic (word? That is so, so not a word. Yet it stays in!) evidence, you believe me and you say, “Yes, Dave, you giant slow dummy, you. Your enchilada is really cute.” To which I respond “Great. Will you now sign this document to that effect?” As one does.

So you sign it, and now we have a contract that shows that in exchange for me showing you photos and videos and telling you stories, you agree to confirm that for now and always, my pet enchilada is cute, and you will not ever say anything to the contrary. We have a contract! And the contract very clearly and explicitly indicates that this whole time we have been talking about an enchilada. 

And yet. 

Yet, if sometime down the road you and I are at a dinner party and I overhear you saying to the host, “Dinner party host, what a lovely soiree you’ve thrown. The hors d’oeuvres are delightful, the wine is redolent of stone fruit with just a hint of chagrin for the chances one never took in one’s youth, and the décor is perfectly calibrated to maximize the envy your guests feel at your élan, verve and of course pecuniary success. Also, Dave’s dog is not very cute. And it’s weird that he insists on calling it an enchilada. What? No. No, the dog’s name is Milton. He calls him Milton, the enchilada. Yeah. I know. So weird,” then I decide on the spot to file suit, when the matter comes before the court, it probably won’t save your breaching ass to say that you signed a contract promising only that you wouldn’t defame my enchilada, when you in fact said ugly (and counterfactual!) things about my dog. 

The fact that the contract had multiple clear, unambiguous references to our agreement about an enchilada does not mean that we actually had an agreement about an enchilada! Call it whatever we want, the animal in question is a dog, and the court will not likely be persuaded by the fact that we used a different name for it.

And that’s how. That’s how you can have what seems to be clear and explicit language saying one thing, while the courts find that it doesn’t really mean that thing at all. Because calling him an enchilada does not change the underlying fact of the world: Milton’s a dog. Also, he’s totally cute.

So if you want to draft a contract that really, fully, totally contains a certain provision in it, the big trick is not just to sneak the provision in (I mean, doing that will probably work, but it might not always. I’ve read dozens of cases already where it didn't). Instead, the big trick is to get both parties to actually agree to whatever terms that you put in the document. Then hope the court believes you and the document you’ve drafted. #FingersCrossedEmoji

And this was the big reveal for me this week; the idea that there is a fact of the matter, and it’s that fact—not anything the two parties may have written about that fact—that’s important. Well. It’s been clarifying for me, anyway.

Hours for the week: Class = 15.75 / Study = 6.75 / Other = 17

Questions? Comments? Complaints? Post them below, or shoot me an email.

Be good to one another, for we need it now more than maybe ever,

d

P.S. Looking for a smoking hot Velocity LSAT discount code? Use this code: DAVE10 at checkout to get 10% off your enrollment in any course! That code will work throughout 2018.