The other day, I finished the contract for an interesting project. There are half-a-dozen people involved in the project. Each of them has something to put in and is getting something out, but there is no direct relationship between one thing in and one thing out. In other words, I couldn’t say, “Mrs. Schwartz pays $100 and Mrs. Goldfarb treats her sciatica.” We were working with a pool of things being exchanged. It was more like, “Mrs. Schwartz pays $50 and provides physiotherapy equipment. Mr. Rosenblum takes $20 and provides a physiotherapy space. Mrs. Goldfarb treats Mrs. Schwartz, takes $30, and tells her other clients that she has space and equipment for physiotherapy.”
In Genesis, Chapter 9, we have the Covenant between G-d and Noah and with all of his descendants, being humankind; it also includes obligations between people. It is not set out as an item-by-item exchange, such as you pay your fare and the bus takes you along its route. It is a pool of obligations, promises and considerations among several parties, being G-d, Noah and each of the people who will descend from him.
This concept of a collection of promises was the structure I needed to put that project to paper the other day. It reinforced a basic technique in writing contracts that makes it possible to write a contract on a napkin.
A binding agreement is made by answering the questions, “Who’s doing what, and when are they doing it?”
The Torah distinguishes between the agreement (brit) and the token – or evidence – of the agreement (ot-habrit).
The agreement itself is the exchange of obligations: humankind will multiply and replenish the earth, will not murder (directly or indirectly) and will not eat meat that is still alive; G-d will provide to humankind the right and ability to hunt and eat meat, will establish the foundation of a justice system and will not flood the earth again.
The token of the agreement is the rainbow. This serves as a reminder both to G-d (verses 14 and 15) and to humankind and all creatures of the earth who can see it.
Today, we make this distinction by using a signed, written contract. The signed, written contract is evidence of the agreement between the parties. This brings us back to the napkin.
You’ll notice that, in my description of the arrangement between Mrs. Schwartz, Mrs. Goldfarb and Mr. Rosenblum, I state what each person does and expects to receive. Nothing happens without someone doing it. The only critical statement missing is the “when.” There are also a few details that would be quite helpful, such as where the money is being exchanged, what equipment is involved, the location of the therapy space, and the length of the therapy session.
In the questions “Who’s doing what, and when are they doing it?” the “what” also includes the “how” and the “where.” In this example, we could say:
“On the 15th day of Kislev, 5780, Mrs. Schwartz will put $50 in the old pickle jar behind the desk at Mr. Rosenblum’s office, which is at 12345 Oak St. She will also deliver, at the same time, an electric stimulation machine and the gel and pads needed for it. She won’t pick it up until the end of Chanukah.
“Mr. Rosenblum will take $20 of the $50 now in the pickle jar and let Mrs. Goldfarb use the therapy cubicle in his office for physiotherapy until the end of Chanukah.
“Mrs. Goldfarb will take the remaining $30 from the pickle jar and will treat Mrs. Schwartz’s sciatica for an hour on the 19th of Kislev and an hour on the 21st of Kislev.
“Mr. Rosenblum and Mrs. Schwartz will let Mrs. Goldfarb use the equipment and space for her other clients until the end of Chanukah.”
In this example, we now know who is responsible for what, when they’re going to do it, and how they’re going to do it.
There are far more details that we could put in, but this would be enough to move forward on its own if Mrs. Schwartz, Mrs. Goldfarb and Mr. Rosenblum don’t get around to writing out something more complicated.
If they expanded from a napkin to a couple of pieces of paper, they could also add in the kinds of details that lawyers argue over: what happens when things go wrong?
The first part of dealing with things going wrong is having everyone promise that it won’t. These are called, in Legalese, the representations and warranties.
Mr. Rosenblum will promise that he has an appropriate space for the therapy, including whatever licences and permits are needed. He also might promise certain details about what is an appropriate space, such as size, privacy, therapy bed, etc.
Mrs. Goldfarb will promise that she has the training, skills, certification and the valid licence required to carry out her obligations. She will also promise to do the therapy in a professional manner to the standards expected by her profession.
Mr. Rosenblum and Mrs. Goldfarb will both promise that they have the appropriate insurance.
Mrs. Schwartz will promise that she has the equipment needed for her therapy and that it works properly.
Now that we know who is going to do what, when and how they’re going to do it, and that they’ve all promised that everything is above board, we can discuss what happens if something goes wrong. Here we get into things like limitations of liability and indemnities. We also might have dispute resolution tools built right into the agreement.
If something goes wrong, no one wants to pay for someone else’s mistakes.
If Mrs. Schwartz trips on the doorstep, Mrs. Goldfarb doesn’t want to be responsible for Mr. Rosenblum not having a smooth entrance to his office.
If Mrs. Goldfarb injures Mrs. Schwartz during treatment, just because it happened in his office, Mr. Rosenblum doesn’t think he should be responsible.
If the electrical equipment causes a fire, neither Mr. Rosenblum nor Mrs. Goldfarb wants to be responsible for the damage caused by Mrs. Schwartz’s faulty machine.
Each will indemnify the others for liability arising from his or her own actions or negligence. In other words, each person promises to pay for the others’ damages for anything that is his or her own fault, whether or not it was intentional.
Dispute resolution is often overlooked because, when people are excited to enter a project together, they tend to think fights aren’t going to happen. But thinking about how to deal with an argument not only makes it easier should an argument arise, it also reduces the likelihood of the argument getting serious.
There are many flavours of dispute resolution tools, but here’s an easy one: the people involved pick an outside person whom they all trust, perhaps their rabbi, and they write in the agreement that, if they can’t resolve an argument between themselves, they’ll ask Rabbi Fogel to help them resolve it.
Remember that a good contract is a clear, written statement of a shared vision.
Jeremy Costin is a business and estates lawyer practising in Vancouver. He sits on the board of directors and the governance committee of the Vancouver Holocaust Education Centre, is a founding director of the Jewish Lawyers Association of British Columbia and is a frequent guest instructor at the Law Society of British Columbia.