Pay Attention to “Everything Else” in Your Contracts
Many years ago, I neatly stored our family’s music collection on shelves of a bookcase in alphabetical order. However, years of pulling a piece out and setting it aside when it was no longer needed resulted in numerous precarious piles. The piles were in four rooms of our house, depending on where someone last looked at them.
During spring cleaning, I decided to restore order to our music collection’s chaos. Determined to tame the unwieldy monster piles of music that had developed over time, I purchased eighteen 12x12 storage bins.
I labeled each bin with names like violin etudes, violin solos, violin method books, quartets, violin orchestral excerpts, duets, scores, etc. I lined up the bins and started sorting the music, disassembling each haphazardly stacked pile of music, one piece of sheet music at a time.
My labeled bins initially were set up to organize only violin music. But I soon realized that we also have music for piano, clarinet, trumpet, choir, and viola.
While preparing additional labels for “non-violin music,” I remembered that in addition to at least six violins in different sizes, our family also has a piano, three clarinets, and a trumpet. When I saw our music collection divided into “violin” and “everything else,” I realized how easy it is to focus on one thing and overlook “everything else.”
Although the violin is a central focus, “everything else” has shaped a significant part of my family’s musical story. In addition to three violinists, over the years, we have had two pianists, two clarinetists, a trumpet player, a choral singer, and, briefly, a string bass player. Since we are a family of four, it’s obvious some of us are multi-instrumentalists.
Collectively, our “everything else” is far from trivial. It represents more than 30 years of formal musical training and dozens of performances by various family members—only a few years less than our collective formal violin training. And “everything else” greatly impacted how we approached the violin.
When reviewing legal documents, it’s easy to become so focused on a particular area that and forget about “everything else.” Each “everything else” item might seem minor, but collectively, “everything else” can make a serious difference in a legal document. Ignoring “everything else” can lead to unexpected and unwanted outcomes.
This article discusses the contract terms that might fall under “everything else” and why parties should consider “everything else” when negotiating, preparing, and reviewing legal documents.
Fundamental Contract Provisions
I tell my clients the essential terms in a contract are
What are you are buying or selling
How much is being paid for it
So, if someone is buying real estate, they need to know what property they are buying and the price they are paying. When someone is hired to do a job, it’s crucial to understand what the job entails and how payment will be calculated. For example, payment may be based on the number of hours worked or a set fee. In a business sale, the parties must agree on whether the buyer is acquiring only assets or assets and liabilities.
In a real estate sale, often, what the purchaser is buying is more nuanced than the real estate with a particular address. Questions about what is being purchased and sold might include
What appliances and trade fixtures are being sold along with the house
Whether the mortgage loan is being assumed or must be paid at closing
Any mandatory repairs the seller must make (the condition of the home is part of what is being purchased)
If the real estate is leased to a tenant, whether the buyer will acquire the right to collect any past-due rent
For all real estate transactions, how much is being paid would include not just the stated purchase price but also
Who is paying for the real estate broker commission(s) for seller’s and buyer’s brokers
How the parties will allocate closing costs
Who is paying to prepare and record the deed
How the parties will allocate any recordation or transfer taxes
Whether the buyer must reimburse the seller for prepaid real estate taxes
On the other hand, in a contract for services, what the purchaser is buying would include different information, such as
Any deliverable work product the contractor is to produce
Ownership of the intellectual property associated with the work product
Any specialized expertise or licensure required of the person performing services
Any warranty or guaranty on the services
And in the contract for services, how much is being paid might include
Whether the fee for services is a fixed rate or based on hours worked
Who pays for supplies and expenses associated with performing the services
Who pays for taxes related to the services
Everything Else
These minimum essential terms provide only the framework for the contract. Some parties only pay attention to the essential terms and consider “everything else” unimportant boilerplate.
When sorting music, I realized that “everything else” had played a central role in defining my family’s musical interests and education. Our “everything else” wove our relationships and bound us together.
For contracting parties, “Everything else” also defines their relationship. Parties who overlook “everything else” may find they never reached a meeting of the minds, which can result in misunderstandings and disputes.
Although “everything else” should be unique to the parties and their relationship, “everything else” might include
How the contract can be modified or amended
Whether a contract is assignable or services are delegable
The extent to which one party can bind the other to a contract
Confidentiality or privacy requirements
Whether the contract is exclusive or whether the parties may contract with others for the same product or services
Insurance requirements
Indemnification provisions
How the parties will communicate formal notices (e.g., verbally, in writing, email, FedEx, etc.)
How the parties will resolve disputes (e.g., mediation, arbitration, litigation) and the city or county where any dispute resolution will take place
Conclusion
“Everything else” forced me to approach the violin from different perspectives. Playing a wind instrument helped me learn to breathe when playing the violin to create phrasing. Although I wouldn't say I liked piano lessons, they taught me to think of music vertically (as chords) as well as horizontally (as melody). Everything else made me a better violinist.
In a contract, “everything else” doesn’t just help parties define their relationship. Examining “everything else” forces the parties to look at their relationship differently and improve it. And improved relationships lead to smoother transactions and fewer disputes.
© 2024 by Elizabeth A. Whitman
Any references clients and their legal situations have been modified to protect client confidentiality
DISCLAIMER: The content of this blog is for informational purposes only and does not provide legal advice. No one should take any action regarding the information in this blog without first seeking the advice of an attorney. Neither reading this blog nor communication with Whitman Legal Solutions, LLC or Elizabeth A. Whitman creates an attorney-client relationship. No attorney-client relationship will exist with Whitman Legal Solutions, LLC, or any attorney affiliated with it unless a written contract is signed by all parties.