Transactional Services

Contract performance support

Transactional engagements aren’t truly complete at the close; rather, the closing constitutes the beginning of the formal contractual relationship.  And, unfortunately, many clients do not fully understand how critical their actual performance under the contract can be to resolving disputes later down the road.

As an example, if a contractual provision is somewhat ambiguous (e.g., “Progress reports will be tendered shortly after the end of each month.”), and the parties, in performing the agreement, appear to adopt a consistent interpretation of that provision (e.g., the reporting party tendering progress reports consistently, over time, on the fifth day after the end of each month), then the courts will frequently look to the actual course of performance of the parties in interpreting the meaning of the agreement.

Thus, after the closing, the contract really shouldn’t be put in the file and forgotten.  Rather, the client should review the agreement with some regularity as the parties perform the agreement, so that opportunities to establish a favorable course of performance are put to use.