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New Rules of Court and Dispute Resolution ProcessesNovember 22, 2010
“A Short Pencil is Better than a Long Memory”
This is something my father used to always say, and I, in turn, say it to others now. What he meant, of course, is write it down so you don’t forget. But to me, being a lawyer, it means more than that.
As a Solicitor, the importance of a written agreement is paramount. A written agreement is so important because it provides certainty. A written agreement clarifies what promises were or were not made.
How many readers have a different recollection of an event from every other person who witnessed the same event? The same thing occurs with agreements, so whether it has to do with the terms of your employment, or agreements among shareholders, or as between a landlord and tenant, a written agreement provides certainty as to what those terms and promises are to be.
A written agreement can also dictate how problems are to be resolved. This includes outlining the forum for resolution (i.e. Court, mediation, arbitration), and how a particular issue which may arise can be resolved (i.e. a commercial building is partly damaged by fire – does the lease continue and, if so, for how long? What happens if it cannot be repaired within a specific period of time?)
In most situations, there are common issues that can be anticipated to arise. Whether or not they do arise at the time of drafting is, of course, unknown but it is important to prepare for as many different situations that may reasonably arise. I have seen many situations where a written agreement has saved clients a lot of time, stress and money, as the agreement outlined the forum and process for resolution. I have also seen clients spend a lot of money to resolve issues where there was no written agreement.
Written agreements can also assist parties in their dealings with third parties. The Canada Revenue Agency is always interested in any enterprise between people and, in order to avoid unnecessary tax consequences, CRA looks for particular phrases in a written agreement. Written agreements can not only assist parties in their dealings with third parties, but they can also protect.
As lawyers, we are trained to write contracts, whether for the supply of services, employment, landlord and tenant, shareholder agreements, sale of goods, or any other agreements people could enter into with the traditional handshake. Having such agreements in writing is of extreme importance for future dealings.
“A short pencil is better than a long memory” may also be phrased “Your lawyer is better than a handshake”.