#102 Why Words Matter, Legally
Crystal clear clarity is a personal value of mine. For me, clarity comes when I speak and I believe that words are so important. Words help us gain an understanding on what it is we need to do and where we need to focus. They are also extremely important when it comes to your legal documents so today I’m talking about why words matter, legally.
Words can mean different things to different people, which is why it’s vital that your legal documents are clear, concise and represent your business and your offerings accurately. In this episode, I outline some of the important aspects to consider when it comes to the words you use in your legal documents and how a poor choice of words, or words that are too vague, can potentially wind you up in an expensive legal battle.
I share some examples of how unclear wording in legal documents can cause a dispute, particularly when it comes to payment terms. As a business owner, one of the last things you want to do is end up in court because the wording in your legal documents wasn’t quite right. There is no substitute for preparation, so make sure you set yourself up for success by building your business on solid foundations.
I hope this episode gives you some insight as to why words really do matter from a legal perspective and what you can do to ensure you are meeting your legal obligations, protecting your business and managing your client’s expectations from the get go.
Full Transcript:
-
[00:00:00] Tracey: Welcome back, everyone to the Rise Up in Business podcast. Thank you for joining me for another episode. Today, I wanna talk to you about a topic that I love, and I could talk about this for days, and if you know me well, you'll know this to be true.
[00:00:34] Today, I wanna talk to you about words and why words matter legally. I love words. I love to talk, and if my husband was listening to this, he would chuckle I'm so famous in my household for saying I get clarity when I speak. Things become clear to me or they crystallize for me so that I know what it is that I need to focus on, or I know what it is that I need to do. So personally, crystal clear clarity is a value of mine, and that obviously comes through the use of words. Why do words matter legally?
[00:01:09] And the reason I wanted to share this on a podcast episode is because clients ask me this a lot when I'm drafting documents and then I have a session with a client, I'm not the lawyer that simply sends you a document and says, there you go, change the names. Good luck. See you later. That's not me at all. Working with me is very much a collaborative process. We dive into documents together, we talk about the approach I've taken with the drafting. So you walk away with crystal clear clarity on why it is I've taken an approach I've taken and what your documents mean and what they do.
[00:01:42] And we get to that point through the use of words. Clients say to me sometimes in those sessions, "why are we using this word? This word feels a bit formal. I don't like this word. To me, this is stuffy," or whatever it might be. And of course we change it. We [00:02:00] always change it because the words that are used in your legal documents are a reflection of you and your business.
[00:02:08] So they need to sound like you. It needs to be on brand, and you need to feel not only confident, but really super comfortable with the words that we choose to use. Words can mean different things to different people. This is why the discussions that I have throughout the drafting process are so important, so that I can really capture through the use of words how it is you provide your services to clients, what it is you're proposing in your documents, what are you going to do, what are you not going to do?
[00:02:42] What is your client's responsibilities in the relationship? All of those things need to be an accurate reflection of you. Words really matter, legally and professionally from a business perspective. I first developed an appreciation for the use and the importance of words legally earlier on in my legal career when I spent the first 12 years of my career in litigation and dispute resolution.
[00:03:07] I can't count the days and weeks that I've spent in court with really top-notch barristers arguing over contract matters or similar business matters, where things turned on the use of a word. And of course, in those complex legal cases, we would then go to explore the intention of the parties and the conversations that the parties had leading up to entering into a document, leading up to the choice of the words.
[00:03:35] So I really started to get an appreciation of the importance of words way back then. And since then I have been very mindful and very intentional when working with clients and drafting documents that we use words that accurately reflect what the client wishes to convey and wishes to do so that the documents can be clearly and easily [00:04:00] enforced without having to get into those complex, expensive, time consuming legal cases that I just mentioned.
[00:04:08] I'm gonna give you some examples of how this comes up mostly in my business these days with my clients. Payment terms is very common.
[00:04:16] My creative clients in particular like to include provisions in their documents to say, you need to pay a deposit before I get started. But that's not clear enough because before I get started can mean different things to different people.
[00:04:32] So if a creative is looking to get a client's matter locked in and confirmed in the workflow. And let's say it's to start on the 1st of February, completion is gonna be six weeks from commencement unless otherwise agreed you need to pay your deposit before we get started.
[00:04:49] Now the client reading that might think well, I need to pay the deposit by the first. So I'll pay it on the 31st of January and I'm good to go. But of course, that's not the intention of my client, the creative, because receiving payment on the 31st, or even payment being made on the 31st doesn't mean it's gonna be cleared in the creatives account, but even if it was being paid on the 31st for a commencement date of the 1st of February is not gonna be helpful because there's not enough time.
[00:05:18] There's not enough time to know that the payment's going to be made, and now you're in the workflow.
[00:05:22] Some creatives say, " but when we had discussions, they knew that they need to pay the deposit as soon as possible to lock in that date." But of course, that's not what the document said.
[00:05:32] Prior to the 1st of February, they're not in breach, and so they'll become very disappointed and disgruntled if on the 1st of February works don't commence. But of course, the creative who's running the business can't operate that way because if the payment's not made by the first, there's a gap in their workflow where they're not generating revenue, and that's not good for business either from a cash flow perspective or a professionalism perspective. You just can't operate that way. So payment term clauses need to be really clear.
[00:05:59] [00:06:00] Either things like the deposit needs to be paid within seven days from the date of issue, the deposit needs to be paid at least 14 days before the commencement date or the deposit needs to be paid within 24 hours of receipt to secure your commencement date. So there's lots of different ways we can frame it to make it work. But you can see here why the choice of words is really important, because the words we choose can mean different things to different people. We need to strive for that crystal clear clarity. Another example that comes up a lot with my interior design clients is what is it that you're going to be doing?
[00:06:39] Are you project managing? Are you facilitating? Are you coordinating? Each of those words have different meanings to different people, so we need to be sure that the language we choose is consistent right from your initial consultation phase to your proposal, making it into your documents, to your invoices, and to the language you use whilst delivering your services.
[00:07:02] It's no good saying one thing in the documents, but you are using a different word in your everyday language. It causes confusion and that's where legal disputes and legal issues can arise. So if you are facilitating a project, we need to define in your agreements what that means. If you are in fact planning to project manage something, we need to be crystal clear as to whether you're entitled to and what that means, what your liability then means, what your liability is, and whether you are covered from an insurance perspective for the service that you're offering. If you're coordinating, again, we need to be clear about what that means because to you, facilitating might mean coordinating trades, coordinating calendars, coordinating deliveries, but to you, it may not mean you're responsible to give trades access, or you are responsible to receive deliveries and do a quality control.
[00:07:55] So those are the sorts of things that we need to be mindful of when we are choosing the words to using those [00:08:00] types of agreements. And we need to really flesh out what that means, and in some cases, what it doesn't mean. Something else that comes up a lot for my interior stylists and designers is a custom purchase.
[00:08:10] So what is a custom purchase? To some clients a custom purchase means quite literally a custom sofa being made specifically for this particular client. For other clients, for other of my creative clients, it means making a custom purchase. So purchasing goods and products for you that you've selected. So long as we're clear about what it is, we mean when we're choosing to use a particular word and we follow through, we're setting ourselves up for success and we're setting our clients up for success because we're managing their expectations.
[00:08:42] Some of my clients will use the word procurer or simply purchase. Others feel more comfortable and aligned with custom purchase because that's the language they use throughout their business. So we need to be really mindful when we're choosing words, what we understand it means, what conversations we've had with our clients, make sure we're defining words and phrases really clearly in our documents and make sure we're following through. If we don't get this right, you can end up like clients then who are paying significant sums of money to argue in court or in other dispute resolution platforms such as mediation or arbitration, but you can end up spending significant time and money arguing about what that actually meant, what it was intended to mean, and what the outcome is. Because if two people have a different understanding of the same word, the consequences can, not always, but can be significant.
[00:09:41] So the point is we wanna avoid that. We wanna set ourselves up for success, and like I've said in previous episodes on this podcast, we wanna make sure that our legal documents are doing what it is they need to. We're meeting our legal obligations under the consumer law. We are making sure our business is legally protected [00:10:00] and we are managing the expectations with our clients.
[00:10:03] Our documents are professional and we are setting ourselves up for success to have long-term sustainable positive relationships with our clients because our documents are professional and because we conduct our business consistent with our document. So that's what I wanted to share with you.
[00:10:19] I hope that's given you some context into why it is that I take words so seriously, why it is that I love words so much and why it is that words can be so powerful. You can't afford to get this wrong. Honestly, you've heard me say time and time again on the podcast and in all other platforms on my business, prevention is better than cure, and that is so true.
[00:10:40] You wanna make sure you're setting yourself up for success and that you are building your business on solid foundations, which are your legal documents. You want to protect what you're building. I know you do, and there's no substitute to preparation and there's no shortcuts. So you need to spend the time to get it right, but the good thing is you only need to do it once.
[00:11:02] This is not something that you need to do year in and year out and go through a grueling process. You set yourself up properly the first time, and from there it's a breeze.
[00:11:12] I hope you have found that helpful. I hope that you have enjoyed hearing my thoughts and my reasoning as to why words really do matter legally.
[00:11:21] I'd be keen to know. Is this new to you or are you all over this and you're already completely respectful of the importance that words have? Reach out and let me know. I would love to hear from you. As always, if you know anybody in your business circles or in your friendship circles that you think would benefit from listening to this episode, please share this podcast because that's how we get the podcast into the ease of even more business owners.
[00:11:49] Thanks so much for listening. I'll catch you next time. [00:12:00]
Join Me on Social:
Rate, Review and Follow me on Apple Podcasts
If you are loved this episode, please consider rating and reviewing my show! This supports me in helping to empower more coaches, creatives and consultants - just like you - protect what they're building, and move forward with confidence in their business. It's quick and easy - click here, scroll down to the bottom, tap to rate with 5 stars and select 'write a review'. As always, I'd love to know what you think, and what you loved most about this episode. Also, don't forget to follow the podcast to stay up to date with the latest episodes.
