Final Sentence: Words Matter

Final Sentence: Words Matter

In the corporate transaction biz, words are everything. And sometimes, commas can make or break you. While we try not to fearmonger too much in this blog, a recent battle royale indie game called “Final Sentence” is about to be released, and that got us thinking. The game’s premise is this: you find yourself at a typewriter, forced to type random sentences before everyone else, while a masked man stands there ready to play Russian roulette every time you make a mistake (i.e., a misplaced comma, missing space, misspelled word). Naturally, Laura is a fan, and while drafting agreements isn’t life or death, it sometimes feels that way. So, in the spirit of spooky season and spooky gaming, let’s talk horror stories, shall we?

$175M Trick or JP Morgan’s Treat

Ouch – we’ve been following the Charlie Javice saga closely, and let’s just say it is a true corporate horror story. By way of background, in 2021, JPMorgan bought her startup, Frank, only to later discover that she had allegedly fabricated millions of user accounts to inflate the company’s value. Javice was ultimately convicted of fraud and sentenced to seven years in prison, but JPMorgan’s nightmare didn’t end there. A Delaware court recently held that, despite her conviction, JPMorgan is still obligated pursuant to the underlying agreement to pay Javice and her co-defendant’s legal fees, which is reportedly approaching two-thirds of the original $175 million purchase price. We’ll all be seeing this case in our nightmares.

The Living Dead Contract

Point blank: a lot of vendor agreements, especially ones that are tech or tech-support focused, will likely have auto-renewal clauses requiring notice of cancellation by a certain date to avoid automatic renewal. I’m looking at you there, with the Peacock subscription you purchased to watch Wicked but never used. Good news! Give your terms of service or client services agreement a closer look, and perhaps you can help yourself avoid unnecessary costs and uncomfortable/costly cancellation negotiations. 

The Law School Case Study

Back in law school, a lot of us read the Lucy v. Zehmer case from 1954. Two buddies (Mr. Zehmer and Mr. Lucy) were having drinks at a bar. After some drinks, the two began talking about the Ferguson Farm, which Lucy had wanted to buy for years. Paraphrasing here but it went something like: “hey, Lucy, you can’t even afford my farm.” Lucy’s response was likely something like “FAFO”. After about 30-40 minutes of back and forth between the two, Zehmer then wrote on the back of the guest check: “I do hereby agree to sell to W. O. Lucy the Ferguson Farm for $50,000 complete.” Zehmer and his wife signed it, but when Lucy showed up ready to take his new farm, Zehmer swore that he was just drunk and joking around. Long story short, Mr. Zehmer got the worst hangover of his life, and Mr. Lucy got a farm.

The Ghost Contract

Let’s talk about the other side of the Lucy v. Zehmer coin: the case of the missing agreement. While the Zehmers may have wished that there wasn’t a contract in the first place, most of the time, you’ll wish you did have one. The “ghost contract” is what happens when people shake hands, trade emails, or start performing without ever formalizing the deal. Everyone assumes they’re on the same page, until something goes sideways and they’re left arguing over what was promised, what was implied, and what was never written down to begin with. Without a clear contract, even honest misunderstandings can turn into expensive disputes.

Let’s all collectively cleanse ourselves of this bad juju and watch a comedy or something. But if you still have the chills, as always, if you’ve got questions, you know we’ve got answers!

~ The W + K Team