Oils ain’t oils

I was working as a solicitor in a large legal firm when one day the senior partner tossed a contract on my desk and said “Myles, we act for this client and need to get them out of this contract!”

He mentioned that other solicitors in the firm had tried but had not been successful in finding a solution.

Challenge accepted!

In simple terms, our client had a contract with an Oil Company… the exclusive rights to truck oil to and from an oil pipeline’s inlet/outlet valves.  The contract was firm and set for a number of years, with rights of renewal.

To our client’s detriment, what it did not contain was an escalation clause. And, over the period of the contract term, the client’s cost of supply had risen to the point where it was costing more than he was making. He needed a re-negotiated contract, and he needed it fast.

Well, I read the law. Nothing I could use there. I considered the facts. Nothing I could use there.

And then began the lateral thinking process. It occurred to me that there is often something in a contract that neither party wish to enforce. So, I went looking and found… nothing!

Then I decided to look for what was not there (often what is not said is more important than what is said). I read and re-read the contract until I saw it, or rather didn’t see it, because it wasn’t there.

There were no ‘quantities’ clauses! None!

Our client had exclusive rights to truck oil from the pipeline, but there were no minimum quantities that had to be trucked.  My client could literally truck zero oil if he wished! 

My thinking was that our client should contact the Oil Company and say that he is going to remove all trucks from the job by three o clock that afternoon.  He would be quite within his rights and what’s more he should advise them that if they attempted to have anyone else truck the oil he would sue them for breach of the exclusivity provisions of the contract.

Subsequent board room negotiations ensued with the Oil Company Solicitors for a new contract.

Escalation clauses were negotiated along with a new base price (based on quantity) and our client was happy (and so was the Oil Company).

Which just goes to prove that sometimes, in complex legal matters, ‘oils ain’t oils’ and it takes thinking outside the square to find solutions.

Worth it in the end

A man unknown to me (let’s call him ‘Mr John Smith’) phoned and proceeded to quiz me as to whether a particular person was employed by me. I said “Yes. Why?

John said “Well, I found their briefcase and it contains some documents and a pay packet full of money.” This was in the days when fortnightly pay packets contained cash. My employee had left her briefcase in a supermarket trolley.

John said he did not want any reward. He was down and out, and more concerned he would be accused of having taken the briefcase and the money. We retrieved the lost articles, and I delivered a Red Cross ‘thank you’ package to him at his basement flat. He was grateful. I mentioned that, if there was anything else we could do, he should feel free to ask. He ushered me out the door with a “She’s right mate.”

Time passed. One day John called down to the office and told me that he was in financial difficulty, didn’t know what to do, and thought I could help. 

Aha! Cynicism got the better of me and I thought “here comes the touch up”. He assured me that was not the case… but he had no education and thought that, as I was the only professional person he knew, I might be able to “sort it.” I said I would see what I could do.

Apparently, 20 odd years before, he and his wife had owned and operated a general store in a small country town, but he had not seen his wife or children since then. 

However, his wife still owned the store and they were still officially married.

What followed was a matrimonial property settlement, sufficient to pay out his debts and allow him to purchase a caravan, which his cousin allowed him to live in on his farm. Mission accomplished. John Smith truly was a good man caught in bad times.

But what he had not remembered was that I had negotiated a larger amount, which his wife said she could not pay right away and so we had left it outstanding.

Some years later I got a phone call from a lady (let’s call her Ms Jones). She said that John Smith was her Uncle and had been diagnosed with cancer with 3 months left to live.  He’d asked her to call me “as I would know what to do.” A totally humbling judgement of me and my ability.

John was scared of being buried in a pauper’s grave, as his Mother had been back in the Great Depression. I remembered the settlement I had done with his wife, and without making promises told Ms Jones I would call her back.

I then negotiated an early One-Lump-Sum-Payout of the balance of the property with his (now ex) wife. I arranged for the funds to be transferred to John’s bank. About a week later the Niece called me to say Uncle John had been in and prepaid for his funeral and he wanted her to tell me how grateful he was.

He passed peacefully. It was worth it in the end.

Question the Answers

My father used to tell me “Myles, it is not enough to answer the questions. You must always question the answers.” The concept has lived with me ever since and is part of my way of working as a solicitor.

One of the more interesting examples of this happened to me when I had a new client, an astronomer, who had ‘invented’ a poster, with original artwork, showing the passing of Halley’s comet through the night sky. He asked me “Can I patent it?”

He also asked “Can I patent this?” holding a small item consisting of two cardboard wheels which could turn to match up the date (printed on one wheel) with some other variable factor (printed on the other wheel) An arrow would point to the quadrant in the sky where the comet was expected to appear. It is called a planisphere.

Neither the poster nor the planisphere, in their basic form, were capable of registration as a patent, so my answer to his question was ”No.”

I then questioned the answer “No” with “Why is it important?”

He said “Because Halley’s comet is in visible orbit for about 9 months and I want to make a lot of money from it. I want to sell the poster and planisphere to schools for student projects and I think I could make about $50,000 over the 9 months.”

But I questioned that answer too. “You cannot patent them, but if there was another way to make money would you be interested?” He said “Yes.”

What followed was exciting!  With some professional assistance, we organised an introduction to Caltex who, at the time, had a logo of a big red star with swish lines and the positioning statement ‘follow the star’.  We sold a 2.5 cm square of the poster space to Caltex for sponsorship rights. They provided distribution through all their petrol stations in Australia and paid for large numbers of posters to be printed and distributed through the school system, free for the children.

What followed was an exponential explosion of the original concept. We obtained introductions to Caltex NZ and repeated the process. 

The concept then went to Asia, followed by exporting the copyright to the USA and, through a series of tax treaties, we were able to make the product viable for the American market.

By thinking outside the square, we enabled the client to make a lot more money than his original expectation

It was questioning the answers that made it possible.

‘Thanks’ means a lot

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