The Importance of a Sound Contract

Whether you notice it or not, contracts are in our daily lives. Whether it’s terms and conditions for a video game, signing up for car insurance, or getting hired, we are constantly being presented with contracts and agreements. Many people, including myself sometimes, disregard these contracts and view them as irrelevant. The truth is, every contract is relevant.

In my time in the personal injury field, I’ve seen businesses take this same approach. Some probably think to themselves, rightfully so, “they’ll never read this, it’s fine”. But people like myself take advantage of this. This is an opportunity for me to get what I want.

Small loopholes and ambiguous language are dangerous for companies or any party entering into a contract or agreement. Here’s an example: in personal injury cases, in most cases, health insurance companies have a right to reimbursement for claims they paid in relation to an accident. In these cases, for the most part, the health insurance company must reduce the due amount accounting for attorney fees and costs. This practice is sometimes known as the Common Fund Doctrine or the Made Whole Doctrine, both of which make sure the client receives their fair share of the settlement. Some plans, however, are able to avoid this by including these doctrines in their plan language by contracting around them. For example, they may say “the Plan is not subject to the Made Whole Doctrine, Common Fund Doctrine, or any other equitable defenses”. In one of my many cases, I came across a plan that had this statement but only stated “the Plan is not subject to any equitable defenses”. Most people might look at that and think “okay they don’t have to reduce”; I saw this as an opportunity to strike, being too ambiguous, they didn’t name the exact doctrines. That being said, I fought them on it. Soon enough, their ~$2,500 lien became $250. This little loophole cost them around $2,250 which is no small number even for a multi-billion dollar company.

Leaving your contracts ambiguous creates dangerous situations which may cost your company, or yourself, thousands of dollars, if not more. Take the time and get your contract reviewed.

Not sure if your contract is sound? Request a review now!