THE DEVIL IN THOSE FAMOUS DETAILS

Everybody has heard how the devil is in the details. Having litigated a few contractual disputes after something went wrong, I can vouch that it is absolutely true. The problem is that, when writing a contract, no-one can anticipate every future contingency. Even two big corporations can mess it up.

Take the case where the owner of an oil tanker leased it for two years to a big oil company. As it happened, at the very time that the oil company defaulted and the owner demanded possession, the tanker was fully loaded with black gold.  It took two days to unload it.  The contract did not say who was to pay for those two days’ worth of a supertanker’s time – a hefty sum. And there the devil (and years of litigation) lurked.

The Courts in this case ultimately reasoned that because the decision to load the tanker was the oil company’s, it had to pay for the two days it took to unload it.  But it could have easily gone the other way.  And in such cases, you may expect that the losing party will appeal every time.  In fact, that particular case went to its jurisdiction’s Supreme Court.

There are several lessons to be drawn from this case.  The first is to work assiduously with your attorney to draft a contract that makes sense, and is broad enough to address most contingencies without trying to pre-litigate every little detail.  That last method is all but sure to leave forked-tailed legal trouble lurking somewhere. Better to rely on common and business sense along with sharp legal eyes to write the best possible contract.

The second lesson is that, if litigation happens on a contract claim, one must always be prepared for appeal. In other areas of law, appellate courts are sometimes limited by standards that dictate how Appeals Judges must give deference to findings by the trial court.  That leaves little room for overturning the trial’s results.  But in most (though not all) contract cases, the Court of Appeals are allowed to take a fresh look, free from the interpretation the judge or jury in the trial court gave the contract.  It makes contractual cases some of the most susceptible to appeals.