Before you look for expensive legal remedies there are 5 steps you should take if you want to enforce an agreement.
Several years ago I entered into an agreement with another person. He was interested in buying a business and asked me to do some due diligence. I fulfilled all the requirements. The situation required that we take action quickly so we didn’t have time to formalize the contract with an attorney or use a service like LegalZoom. But we did agree on all the terms.
Shortly before we signed the contract (but after I did a great deal of work on the deal), the other person decided he wanted to change the terms. The business situation had changed and as such the deal wasn’t as attractive as he thought it would be. From my stand point, I fulfilled all the requirements and I was not responsible for the changes that had taken place. I felt that I was owed what we had agreed upon. How do you deal with a problem like this?
Here are five tips to help you solve this kind of dilemma:
1. Determine if there was an agreement.
First, go through your records and determine if you and the other party really did come to terms. You are going to be in a much better position if you have emails to prove that you did indeed have a mutual agreement. This is why I strongly recommend that you negotiate via email or letter. Never rely on people to remember what you spoke about. Everyone has selective memory. After every conversation, send an email to the other person summarizing what was agreed upon and ask for other person to acknowledge if your summation is correct or not.
In our case, this was easy. We had emails that dated back several months that not only spelled out the terms of the contract but we also had everyone’s agreement to these terms in black and white – including the person who wanted to change everything.
2. Is there an enforceable contract?
In order to have an enforceable contract, you need to have 6 elements:
- Offer and acceptance
- Intention to create a legal contract
- Consideration – an exchange of value
- Legal capacity
- The contract must cover a legal transaction
Entire text books have been written about each of these elements of a contract. I’m not going to go into detail here. Suffice it to say that all the elements of the contract were in place with respect to the situation I had to deal with above. Nobody disagreed with this fact.
How about in your situation? Are all the elements of a contract in place? It doesn’t matter if you are dealing with an employment agreement or a real estate deal. If you lack even one of these 6 items, you don’t have agreement and you don’t have a contract. But notice that you can have a binding agreement even if it isn’t written. Of course the laws on this are highly dependent on where you live. This is why you should consult a local expert.
At this point, you could stop reading and simply call a lawyer if you have an agreement and the other person is being a jerk. But I wouldn’t be so fast to pick up the phone. In my situation, the last thing I wanted was to force the other guy to do something he didn’t want to do if I could find a better solution. I believe you too will be better off if you continue the process of trying to find a compromise if you can. Again, just because you can force someone to do something doesn’t mean you should.
You must ask yourself this very important question. I was able to answer this question once I asked myself if I would live up to the original terms of the agreement if I were in the other person’s shoes. The answer was “yes”. When I was clear about that, I knew it was worth moving ahead.
Ask yourself if you would feel you were treated fairly if you were in the other person’s place and was forced to live up to the original terms. If you can’t say yes, you can’t really go forward in good conscious.
4. Is there still a way to find a compromise?
Once you become convinced that you are not going to simply acquiesce you should still seek a compromise. What can you give up that will make the other person feel more comfortable? What can the other person give up to help you? Compromise isn’t always possible in every situation and sadly, it wasn’t with the conflict I experienced. But if you can give up something to help the other party you should do so as long as the other party is willing to reciprocate.
5. Don’t take it personal.
The key to enforcing a contract is to not take things personally. The other person (hopefully) isn’t trying to hose you. He or she is just doing what they feel is right – even if you think it’s wrong. Try to see this from the other person’s viewpoint. The other person simply sees things differently. It’s got nothing to do with you.
At the same time, and this is super important, don’t cave in just to make the other person happy. Be fair to the other person. But be fair to yourself as well. If you were in the other person’s shoes, would you pull what the other person is trying to do? If not, there is no reason to try to please this person.
You are not trying to defend yourself as a person and you not trying to get someone else to feel a certain way about you. You are trying to be fair.
Once you have gone through this process, sit down with the other person and listen to his or her grievances. Find out why the other person feels a change is fair. Ask him to clarify what terms of the agreement you failed to fulfill. If he makes good points, be willing to modify the agreement.
If all you hear is a bunch of thoughtless excuses, don’t sweat it. Simply and slowly walk through the terms of the agreement. Ask the other person to acknowledge these terms. Then explain how you complied with each of the terms. Make your position very clear.
When push comes to shove, try not to force people to do anything. Give them an out if you can. In my case, I suggested that the other party could change the terms – but that he’d be on his own. I told him that he could indeed go back on his word but that I wouldn’t do business with him. The downside of losing the entire deal was worse for him than accepting the terms we originally agreed on. As a result, he made the choice to live up the agreement – I didn’t force him to do anything.
In your situation, you may be forced to call in an attorney but do so as a last resort. First, determine if there was agreement on all the terms. Then, be clear if you had all the elements of a contract. Next, decide if the contract is worth enforcing and whether or not compromise is possible. Share all these steps with your adversary. If he is still being unreasonable, remember not to take things personally. Remember this isn’t a personality contest and that you have to treat yourself as well as others fair.
Make your position crystal clear and then let the other party decide which route he wants to take.
By doing a little homework and really thinking through this process you’ll show a great deal of strength and justification for your actions. As a result, more people will honor the agreements they enter with you.
Have you ever had to enforce a contract? How did you do it? What was it like?