Contracts and agreements between normally rational human beings can become difficult and very expensive when they are poorly handled to begin with. Even straight-forward agreements, such as matters of employment and compensation can create serious problems if and when they are not done with great care and accuracy.

An entire industry, the legal profession, has grown up around the simple fact that memories can fail and understandings not reduced to paper are difficult to litigate when
things go wrong.
Penny Wise – Pound FoolishAll too often, though, parties to an agreement fail to reduce contracts and agreements to writing or, use poorly written templates that do not specifically address the issues. This is perhaps done in an effort to save money and avoid the cost of hiring a legal professional to see to the contract. Sadly, though, these small savings can carry big consequences in the end.

In December of 2014, the Ontario Superior Court of Justice heard two cases:

Court file no. SC-12-5290-00, in which the Plaintiff makes a claim against the Defendant for rent,andSC-13-03992-00, in which the Plaintiff made claim against the defendant for lost sales revenue.

 

The Plaintiff owns a truck stop in Pickering. He hired the defendant to manage that truck stop by way of a verbal contract. The Defendant was promised compensation at an hourly rate of $8, plus free accommodations in an apartment in the basement of the building +5% of sales, not including tobacco. The Defendant’s employment was terminated in a letter dated  July 15, 2012. Subsequently, the Plaintiff brought charges before the court – still without benefit of legal counsel – prompting the Judge to opine as follows:

 

“With the greatest of respect to both parties, had they retained competent representation, I have no doubt that their cases would have been far better enunciated and put forward before this court. Unfortunately, this was not the case as the evidence was poorly presented (quite random at times) leaving many gaps and unanswered questions. I also find that there were many discrepancies in the evidence and contradictions between the parties as to what actually transpired. For this court, credibility became a major factor in assessing the truth of what actually transpired between these litigants.”

The plaintiff did present the court with a one-page letter from an accountant relative to the alleged sales loss and/or shortfalls amounting to $21,000. Had the accountant actually been present as a witness to provide testimony and back-up evidence, the case might have gone differently.  As it turned out, in his eagerness to save the cost of a lawyer, this plaintiff relied upon his own limited knowledge of the law and in so doing, may have suffered a far greater loss  – perhaps more than $21,000, since both claims were dismissed as unproven.

Particular in matters of business, it is prudent to retain counsel when important and potentially costly agreements are at stake. To do less, leaves you and your business at great risk. As we see here, the law demands documentation and logical presentation of the facts. Without proper documentations, a court case can devolve into a “He said,” “She said,” situation in which the court must ultimately rely upon its assessment of the parties’ credibility.

In these two cases, the court found the defendants to be trustworthy, saying; “In my observation of both the defendant and his wife, I felt that they were sincere and believable. I was satisfied with the defendant’s evidence, in denying any wrongdoing on his part with respect to these alleged ($21,000), missing funds.”

The lessons here are crystal clear. 1) Get agreements in writing and, 2) Don’t go to court without an experienced advocate. Vagan’s Legal Service can help you avoid the expensive consequences of being “penny wise and pound foolish.”
Tag: legal services

Menu Title
×