What do parties intend to achieve?

A learned judge Brian CJ in an old celebrated case (as far back as 1478) said “the thought of a man is not triable, for the devil knows not the thought of a man”. Centuries later, this statement stands true and deciphering intent is a key part of our legal gamut in so many ways.

The gist is that a man’s intent is a very relevant factor even in commercial transactions where “lawyering” is both an art and a science. Surely there is an element of behavioral sciences in every aspect of being a lawyer: from watching a witness in the box, to listening to a client ramble, to observing parties in a meeting room, even to the nuances or the twists and turns of the people (the parties, their lawyers, and more) you encounter daily. They all lead you to one question: What is their intent?

How is intent relevant? Every business transaction invariably involves people with set objectives and the lawyers’ role is to help them realize their goals and aspirations by first discovering what they “actually” intend to achieve. Not many clients are adept at expressing the desired result in a manner the lawyer fully comprehends. Ironically not many clients understand legal ramifications of their brief.  A lawyer must therefore help the client - however faltering - to find full expression and exactitude with the   expected end result. Therefore, to adequately superintend any deal, one needs to have a clear understanding of: What? When? How?

What?

What do the parties intend to achieve? This is the heart of the brief. One key to success here is to draw a distinction between distributive and integrative intents.

A distributive intent deals with issues where parallel lines are drawn between the parties and extensive negotiation is required in these areas to reach an acceptable “middle ground”. For example, A and B each believe that they should nominate the Chairman of the new company. We can only have one Chairman so a decision may be taken for example to allow each of them nominate the Chairman rotationally on a yearly basis.

The integrative on the other hand deals with areas of congruence – parties agree on these areas and are in a hurry to see their implementation. 

Why is it important to make this distinction? With the distributive areas a lawyer is acting for only one client, whilst with the areas of congruence all the parties and their lawyers seek to achieve a common goal. Some lawyers fail to understand fully the clients’ intent and end up taking a distributive stance with areas of congruence - sometimes to their clients’ dismay.  In one Joint Venture transaction, we asked an “integrative” question to the parties: What is the scope of the Joint Venture? This simple question threw up many spades and spanners. It became clear to them that one had in mind a Joint Venture that covers all engineering type businesses within Nigeria whilst for the other it was simply one definite line of engineering. I heard a brilliant argument from one of the parties when I asked for a delineation of “engineering”. He says to me: that even road sweeping is engineering – as long as the process involves the use of any form of technology. In this scenario, the parties need to integrate their thoughts urgently as a difference in opinion as to the scope of the business is a fundamental issue. Here again we must ask: What do you intend to achieve?

 When?

Time they say is money and most business transactions have a timing element. Time is sometimes a deal breaker! Knowing the speed with which the parties intend to achieve the goal will help your advise on the shortcuts (legally so) to achieve targets. For example if a company needs to be incorporated you may suggest using what the Corporate Affairs Commission call the “same day incorporation” which means you can get your company incorporated same day for an additional N50,000. My personal experience saw the company out the next day, and this saves you 10 to 14 days in the least.

Timing is also important where the business has a lifespan. For example a Joint Venture to execute a project or a fixed term contract. The fundamentals of such transient arrangements are different from indefinite relationships.  

How?

How do we intend to achieve the set objectives? There has to be a Master Plan or Drawing Board for achieving the legal structure required. The hallmark of a good transaction is having a well designed road map that charts a course to achieve the intent of the parties in a timely and cost sensitive manner.

This roadmap must plan tax issues – what will be paid as transaction taxes, to whom and how much? It is at this point that parties can explore creative ways of structuring their deal to reduce the tax burdens. The road map must plan permits and approvals – the Achilles heel of many processes are regulations and regulators.

Ample time spent rehearsing how to proceed and the steps to actualizing goals is time very well spent. It helps the parties to internalize their thoughts, foresee potential pitfalls in the process, and avoid costly mistakes.

The devil they say is in the detail and we should keep an eye open for him at every turn.

Ayuli Jemide, is a partner with Detail Solicitors.