Get contract revisions in writing to save on litigation costs
By AdvocateDaily.com Staff
A simple email or text message could net huge savings for companies or individuals following revisions to construction contracts, says Toronto senior litigation lawyer Jeffrey C. Silver.
Silver, principal of Jeffrey C. Silver Barrister, says the unpredictable nature of construction projects means revisions to original agreements are inevitable as parties react to changing circumstances on the ground.
But in an environment where verbal or handshake agreements proliferate, he says all parties expose themselves to legal risk when they fail to get a written record of the key terms of the new deal — and in the modern age, it’s easier than ever to do just that.
“If there is time pressure, a short email or text message exchange can do the job,” Silver tells AdvocateDaily.com. “Once you believe an agreement has been reached, all you need to do is send a message summarizing the key and essential points, and then ask the other party to confirm, and it’s etched in stone.
“By taking a few extra minutes, you can confirm the changes that were ultimately agreed to after lengthy discussions and exchanges of emails, or in a worst-case scenario, save the enormous cost of days and weeks in trial for a judge to determine what, if anything, was agreed,” he says.
In addition, Silver says the technique applies to deals well beyond the construction sector.
“If you’re negotiating the purchase or lease of a new car through email or over the phone with a salesperson or manager, you can send an email to make sure all the terms, such as equipment to be added, the length of the lease, the payment amounts, and interest rates, are set out and confirmed,” he says. “It doesn’t take much effort to circumvent what can be a lot of frustration and irritating problems down the road, which may otherwise end up costing you money and time.”
Even when a revised agreement is committed to paper in construction matters, Silver knows from experience that the results can be rushed and ambiguous.
In one of his cases, Silver’s client had a contract for $2.5 million as part of a broader $125-million construction project. He says a “lengthy written contract” befitting the size of the deal governed the initial agreement between the parties.
But when it became clear that the job was more complicated than it initially appeared, a price change became necessary, says Silver. The parties wrote their "agreement" in different coloured ink on a small piece of scrap paper, which purported to show the deal that was reached. It was signed by all parties.
He says his client was "very candid" at trial and testified that he understood what the document said on its face, but that it did not represent what had been discussed and agreed to regarding the price change. The judge sided with Silver’s client, placing no weight on the document after finding that the opposing party’s evidence lacked credibility.
“Although my client was completely successful at trial and in resisting a subsequent appeal, he was fortunate in that the judge believed him, and that he was able to produce other documentation that supported his position,” Silver says. “But the issue still took up much of his time at trial, and a great deal of expense — ultimately paid for by the other side.”