Case Histories

1.   A company placed an order for display boxes for a critical new customer. The intention was for the company to display their product in some test markets. If the tests went well, the company stood to receive a very substantial order. The supplier was late in delivering the display boxes and the company was forced to test market in other simpler boxes it kept on hand.      

Needless to say, the customer was not pleased with the display boxes and never placed the order. The supplier sent numerous collection letters to the company. The company responded to each letter indicating that as soon as cash flow allowed, they would tender payment.

Of course, cash flow never improved, the bill remained outstanding and the supplier sued. The company had several good defenses to the lawsuit as well as various claims back against the supplier. However, the responses to the collection letters that indicated payment would be made, would likely be considered admissions by the court that the money was owed, making it unlikely that the company will prevail on its defenses or claims.

2. Company A decides to buy Company B. The President of Company A drafts an asset purchase agreement for the purchase of Company B. The agreement is signed but Company B does not perform all of its obligations according to Company A. Company B says it has performed, as it understood the agreement. The agreement was ambiguous on a couple of points and open to interpretation. As a result, Company A never got all of the assets it thought it purchased, some of which made the purchase of the other assets useless.

3. A homeowner hires a landscaper to perform work on her property. The landscaper is unaware that landscaping services are considered a home improvement. A dispute developed between the homeowner and the landscaper. The landscaper did not have the homeowner sign a contract that complied with the requirements of Connecticut law. As a result, the landscaper was not able to collect from the homeowner for the work he did.

4. Two gentlemen form a business together. They draft a one-page agreement that attempts to spell out their arrangement. The agreement was completely inadequate to address various issues that came up between the two partners. They have now spent thousands of dollars each in litigation, all of which could have been avoided with a proper agreement.

These are but a few of the examples of cases where very capable and competent business people got themselves into trouble by not practicing preventative law. The consequences to their respective businesses ranged from losing thousands of dollars to being forced to close down.

In all of these situations "an ounce of prevention" would have tipped the scales in their favor. Let us be the "ounce of prevention" that tips the scales, and the competitive balance, in your favor.