A big problem – and a way forwards

Thanks!
December 31, 2013
Reviewing dull agreements
May 29, 2014

A big problem – and a way forwards

Providing a legal compass

I took a panicked call from a client this week: the supplier of one of his biggest selling products was threatening to pull the plug on his distribution agreement – could I advise on his rights? He emailed the contract as we spoke. Yes, I said, but was he sure that was what he wanted? Admittedly, he was a bit non-plussed by my reply. I asked him what his objective was: he wanted to avoid the contract from being terminated, he said. His tone indicated that he had articulated the blindingly obvious. Then that, I said, is what I want to help you with.

I did review the contract, of course. But, I also asked him about a whole heap of other stuff before giving my advice. In the conversations that followed, we pieced together an overall picture that enabled him to strategise, look at possible outcomes and decide on next steps.  I looked at:

  • The relationship history
  • The reliance of his business on this particular product
  • The financial position and resources of both businesses
  • The supplier’s access to legal advice
  • The commercial attitude and culture of the supplier

Funnily enough, when you also took these factors on board, things began to look a little different. When lawyers look at things this way, I think we give the most constructive advice. A ten page letter of advice on his contractual position would have been as helpful as a chocolate tea pot. What he really needed help with was knowing how to manage the risk effectively – with the benefit of a legal compass.

So, yes, I do tend to ask a lot of questions – but there are good reasons behind it.