Diary of an innocent in-houser

I suppose our non-legal colleagues do find our approach confusing sometimes. Despite our best intentions, our advice sometimes seems contradictory to those not steeped in the way different situations affect how the law applies.

I thought of this last week when I had some discussions with Bob Harding on the meaning of words in contracts. Bob, an enterprising Geordie, is the MD of a smaller, rather old fashioned subsidiary based near Sunderland which does something, I forget what, with concrete.

Bob is of the view that wording in a legal contract takes on an unfathomable meaning that only lawyers could ever understand. Thus, if a contract includes words such as “The Manufacturer shall pay 5% commission to the Distributor on all Sales (as defined) monthly in arrears”, and Bob’s company is the Manufacturer, Bob would have no difficulty in asking: “Surely you lawyers can find a way for us to knock that down to 3.5% and pay quarterly? After all, what does the clause mean in legal-speak?” I have explained to Bob that words in contracts have their usual meanings and mean what they say, all quite simple.

Last week Bob was passing through head office and came in to explain a “neat deal” he had done with the business’s old retainer, Johnnie the janitor. Johnnie was around 67, lived on site in a company house and had been employed by Bob for about 30 years. Bob had asked HR how to make him redundant now that automated security systems could do the job, and HR had advised that this would be with great difficulty and cost given he was fit and well, had long service and had the benefit of a lengthy tenancy.

“Well,” said Bob, “I followed your approach of simple wording in legal contracts. I’ve given Johnnie a bonus of a couple of grand and in return, although it’s not mentioned there, he’s signed an agreement that he works as a contractor for 11 months 3 weeks every year and then resigns and I reappoint him, and also, the clever bit, he’s signed a new tenancy agreement under which he moves out of the house every 31 January and then signs a new agreement starting 1 February. See, no long service, no long tenancy!”

Leaving aside the ethics of such a deal, I pointed out that employment law and English land law would override anything of that nature and any court would throw the agreements straight out. “But Johnnie’s solicitor agreed they were fine!” he responded. “Only because he knows they’re rubbish”, I opined.

“How is it, James,” he went on, “that when the wording suits me you say it needs some special overriding legal interpretation, and when it doesn’t you say it means what it says?” It was a fair point, I suppose, and we entered into a fruitless debate in which Bob accused us lawyers of trying to run a secret cartel. As if.

Reluctantly he agreed to tear up the agreements and leave poor Johnnie in peace to carry on. I phoned him a few weeks later to see that all was back to normal. “Yes,” he said. “Well, nearly. Johnnie says the two grand bonus was separate from the two agreements, and his lawyer agrees, and he won’t pay it back. I give up, James. You lawyers!”