Contract Tripwires – The Smallprint

A  legend from the world of Rock’n’Roll that has an important lesson for modern contracts.

David Lee Roth of Van Halen fame, did indeed include a clause in their contracts rider demanding that brown M&M’s were to be removed from the backstage area.

It’s true.

But while this appears a frivolous and petulant demand buried deep in the contract, the inclusion of clause 126 (The Brown M&M clause) was purposeful. It wasn’t simply a way to wriggle out of playing and get paid although it could have been used in that way. The purpose was deliberate, calculated and brilliant, but above all, simple.

A contract is a tricky thing at the best of times. Two (or more) parties attempt to document up precisely their agreement to ensure nothing is missed.

I’ll let David explain the purpose below in his own words. I think you will agree, simply brilliant.

So for those that can’t (or do not feel comfortable following links).

The cliff notes… The seemingly frivolous clause (and the presence of Brown M&M’s) identified if the contract had been read fully and complied with. The rest of the clauses dealt with key safety issues. The lack of Brown M&M’s was evidence that measures had been taken as requested. The presence of Brown M&M’s flagged up that the band needed to do a full line check before beginning to ensure all could go as planned.

So the next time you come across a clause you do not see the point of, switch shoes, and look for the reason it was included. It is my experience that legally contracts only contain elements that serve purposes, understand those purposes and you understand that contract.

 

June 2014 – UK v’s US Outlook

Just how different are the outlooks for the UK and US economies?

With the minutes of the Bank of England’s Monetary Policy meeting published yesterday it becomes apparent that the UK economic outlook is  looking positive and while the global economic outlook was dimmed, particularly the US and Eurozone,  the general outlook was positive.

The most encouraging note in summary was that “The economy was starting to return to normal“.  The bank has indicated that interest rates will rise sooner than the financial markets expected although the first qtr dampening of mortgage approvals was of concern.

The optimism balances in the CBI survey of consumer, business and professional service companies had risen in May to their highest levels since the survey began in 1998“.

Meanwhile the US Outlook has a number of analysts concerned. Over at US Economic Outlook the view is deeply pessimistic. “Every four to six years, the U.S. experiences an economic slowdown. It happens like clockwork. The current bull market is now in its fourth year.“.

The IMF has cut its projections for the US through to 2017 in their latest annual review.  Some of the early statements paint a bleak picture. “In the early part of this year, as a harsh winter conspired with other factors (including inventory drawdown, a still-struggling housing market, and slower external demand), momentum faded in the U.S economy.”

The IMF outlook for the US is also dampened. “Potential growth is forecast to average around 2 percent for the next several years, below both historic averages and the outlook assessed at the last Article IV consultation”

Has the road just forked between the UK and US economies?  With the Uk increasingly isolated from the Eurozone and its troubles just what road will the UK be on in 5 years time?  There are no solid answers but surely a great subject for a dinner or breakfast debate?