• December 15, 2017

Communication is the foundation of all agreements. Miscommunication lurks at the foundation of most contract disputes.

When a person or a business (say, a business owner) hires intermediaries to help negotiate a complex agreement (say, a commercial lease) and, in the end, a material term failed to make its way into the final agreement, who’s to blame? Who should bear (or share in) the loss?

One argument that we have heard in many cases come from the intermediary accused of dropping the ball who argues, “Well, you, the client, signed the final deal. It’s on you if you signed it when it lacked a material term….”

The argument is somewhat attractive because of that signature, that final step; it has such importance and finality. Further, the client, more than any other person, should have the clearest sense of what is material in the agreement, what really matters.

On the other hand, clients come to professionals (whether real estate professionals or lawyers) not only to explain particular clauses, not only to negotiate details, but also to shepherd the clients through the process to the conclusion.

On balance, in many cases an intermediary (whether a lawyer, a real estate professional, or a broker of some other kind) abdicates responsibility by blaming the client for signing the final agreement.

Consistent with the point of view, the Minnesota Court of Appeals revived the Tap House Restaurant’s lawsuit against Cushman & Wakefield this week, which the trial court had thrown out of court. Cushman & Wakefield had been hired to negotiate the deal, had been assigned the task of negotiating lower HVAC fees under the contract, appears to have reached a deal or come close to a deal on lower fees but, in the end, that negotiation was not reflected in the final lease.

The Court of Appeals remanded the case for further proceedings at the trial court, holding that the mere fact that the Tap House signed on the dotted line (and had its own lawyer involved in the deal as well) did not necessarily take Cushman & Wakefield off the hook…

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