4 ms·

Ultimately, this is a consequence of out-of-control complexity in the legal system in America (and, I think, in many other countries). The current status quo i

Ultimately, this is a consequence of out-of-control complexity in the legal system in America (and, I think, in many other countries). The current status quo is that in order to do many commonplace things, you will be required to sign long, arcane legal documents that are difficult or impossible for people without specialist knowledge to understand, and which in most cases you have no real negotiating power to argue against. And so people don't read them. You can't. When my wife and I sat down to buy our first house, we planned to read every document before signing it. The mobile notary they sent to our house was aghast. He was like, "Uh, I guess if you want to try, I can leave these here and try to come back in 8 hours or so, but obviously I will not stay here while you read everything you sign." Even if we had read it, what are the odds that we could've found some gotcha clause dressed up in weird language in that mound of documents? When the status quo is for people to sign documents that they have not fully read or understood, things like this are going to happen. There are a couple of solutions, neither of them perfect: 1. We need lawyers-in-a-box that can protect us from the most outrageous abuses. You should be able to point your smartphone at a Confession of Judgment and your phone should make a big red X and say, "WARNING! This kind of document is considered predatory! Exercise extreme caution before you sign it!" (You should also be able to get one that would tell you that the non-compete they want you to sign in California is not binding, that this contract contains a mandatory arbitration clause, and other things like that). 2. But that would only help a little bit. Ultimately, we would need to really rework the legal code in ways that I think everyone is more than a little uncomfortable with.

petermcneeley 8y ago
I really like your sentiments but I think the full underlying issue is simply power. These contracts are simply a catalyses for the total power of the state and the legal system to be used as a weapon by those who seek to exploit others. Fundamentally it is the enforcement of exploitative (either by knowlege or position) contracts that needs to end. This is likely what you were hinting at in " Ultimately, we would need to really rework the legal code in ways that I think everyone is more than a little uncomfortable with."
IronWolve 8y ago
A Lawyer in a box would be great, an android app. But the problem is these companies are pushing a loan as a cover to take assets. They are setup to force a failure, so they can collect. The subprime loan fiasco, a good portion of people could make normal interest rates on mortgages, but most had arms with big baloons. Many people re-finance their homes thru the government, with normal interest rates. If you are making your payments, why would you think the loan would be called in all at once? Its a scam, thats why.
imh 8y ago
>And so people don't read them. You can't. It's even worse than you say. Standard english words have secondary meanings as legalese. You might read "The cat sat it the box" and think "Ok, I know what this means" or maybe look up the bits you don't know in a dictionary, only later to learn that "sat" has a special legal meaning in your jurisdiction. You literally can't read these yourself because everything has special hidden meanings that you won't even know exist without special training.
- Riseed 8y ago
  To offer a real life example, in Hurst v. W.J. Lake & Co., the court ruled that 49.5% was not "less than 50%" because of "the peculiar meaning attached to the words" by the trade in question. tldr casebrief: https://www.casebriefs.com/blog/law/contracts/outline-contracts-law/interpreting-contracts/case-overviews-13/49/ https://www.casebriefs.com/blog/law/contracts/outline-contra... More details & quotes: https://h2o.law.harvard.edu/collages/2981 https://h2o.law.harvard.edu/collages/2981
Twirrim 8y ago
Interesting. We read through all the legal documents when we bought our house (in Washington State). The notary sat there as we did it, and it certainly didn't take multiple hours to do so.
endorphone 8y ago
In this case the documents weren't particularly complex or difficult to understand, though. And I think most of the parties fully understood the meaning and intent of the text they signed. But this company takes advantage of people in vulnerable situations (as most predatory lenders do) and circumvents all of the normal checks and balances in a way that should be absolutely illegal. If this sort of activity is what they need to do to stay in business, they shouldn't be in business (and I say this for both sides of this case, as an aside. Massive interest loans to temporarily prop up failing businesses just costs everyone). While I might understand a lender needing agility to act quick if they think a borrower is failing, a rubber-stamp immediate default judgment is outrageous. More so is the notion that a form-filled template is worth a $9,900 legal fee (which is likely why they chose this route -- retrieving the capital to lend to someone else and filling a bit of business for their bottom-feeder in-house lawyer made it a net win)
retromario 8y ago
In Germany, the notary is actually required to read out loud the entire contract and make sure each clause is clear, valid and understood by all parties. I always thought this was a stupid, overly expensive and bureaucratic process when incorporating a company. However, for a house purchase contract it was surprisingly useful (but still ridiculously expensive...notary costs here are more or less a fixed percentage of the transaction worth).
- pjc50 8y ago
  I think this is one of those things where the Anglospheric absence of notaries and generally simpler bureaucracy is a good thing - company formation cost me £25 and there's even an API for it now. For small companies the duties are simple and the required accounts basic. Real estate purchases in England still have a number of surprises for which you have to retain a solicitor, but in Scotland the system is almost entirely standardised. (Real estate involves not only surprises in or below the building but in feudal or other attached liabilities or easements (e.g. "chancel repair liability") - and don't get me started on the US weak title system)
- kaiwen1 8y ago
  In the Philippines the notary is the scam. Only lawyers can be notaries. The lawyers association (the Bar) for each jurisdiction sets the fee. Any lawyer caught charging lower than the standard fee is subject to sanctions. And what's the fee? It's a percent of the value of the contract. For land sales it's typically 2-3% in most jurisdictions. And of course, this scam hits the poor the hardest. They get stuck paying these preposterous fees while the rich just cut deals with the attorneys.
- mjevans 8y ago
  It should have the effect of discouraging bad behavior by any party in the contract as well as encouraging a more succinct and simple contract. I am constantly amazed at how much 'boiler plate' stuff needs to be re-defined in each and every contract (at least in America). It's as if the concepts of a standard contract, where one thing is exchanged for another or payments are made on a term, doesn't exist.
dv_dt 8y ago
You can read those docs, it just requires that you insist on it delivery of documents ahead of time, which may require your real estate agent to actually schedule an extra day or two for the timeline of closing.

petermcneeley 8y ago

I really like your sentiments but I think the full underlying issue is simply power. These contracts are simply a catalyses for the total power of the state and the legal system to be used as a weapon by those who seek to exploit others. Fundamentally it is the enforcement of exploitative (either by knowlege or position) contracts that needs to end. This is likely what you were hinting at in " Ultimately, we would need to really rework the legal code in ways that I think everyone is more than a little uncomfortable with."

IronWolve 8y ago

A Lawyer in a box would be great, an android app. But the problem is these companies are pushing a loan as a cover to take assets. They are setup to force a failure, so they can collect. The subprime loan fiasco, a good portion of people could make normal interest rates on mortgages, but most had arms with big baloons. Many people re-finance their homes thru the government, with normal interest rates. If you are making your payments, why would you think the loan would be called in all at once? Its a scam, thats why.

imh 8y ago

>And so people don't read them. You can't. It's even worse than you say. Standard english words have secondary meanings as legalese. You might read "The cat sat it the box" and think "Ok, I know what this means" or maybe look up the bits you don't know in a dictionary, only later to learn that "sat" has a special legal meaning in your jurisdiction. You literally can't read these yourself because everything has special hidden meanings that you won't even know exist without special training.

Riseed 8y ago
To offer a real life example, in Hurst v. W.J. Lake & Co., the court ruled that 49.5% was not "less than 50%" because of "the peculiar meaning attached to the words" by the trade in question. tldr casebrief: https://www.casebriefs.com/blog/law/contracts/outline-contracts-law/interpreting-contracts/case-overviews-13/49/ https://www.casebriefs.com/blog/law/contracts/outline-contra... More details & quotes: https://h2o.law.harvard.edu/collages/2981 https://h2o.law.harvard.edu/collages/2981

Twirrim 8y ago

Interesting. We read through all the legal documents when we bought our house (in Washington State). The notary sat there as we did it, and it certainly didn't take multiple hours to do so.

endorphone 8y ago

In this case the documents weren't particularly complex or difficult to understand, though. And I think most of the parties fully understood the meaning and intent of the text they signed. But this company takes advantage of people in vulnerable situations (as most predatory lenders do) and circumvents all of the normal checks and balances in a way that should be absolutely illegal. If this sort of activity is what they need to do to stay in business, they shouldn't be in business (and I say this for both sides of this case, as an aside. Massive interest loans to temporarily prop up failing businesses just costs everyone). While I might understand a lender needing agility to act quick if they think a borrower is failing, a rubber-stamp immediate default judgment is outrageous. More so is the notion that a form-filled template is worth a $9,900 legal fee (which is likely why they chose this route -- retrieving the capital to lend to someone else and filling a bit of business for their bottom-feeder in-house lawyer made it a net win)

retromario 8y ago

In Germany, the notary is actually required to read out loud the entire contract and make sure each clause is clear, valid and understood by all parties. I always thought this was a stupid, overly expensive and bureaucratic process when incorporating a company. However, for a house purchase contract it was surprisingly useful (but still ridiculously expensive...notary costs here are more or less a fixed percentage of the transaction worth).

pjc50 8y ago
I think this is one of those things where the Anglospheric absence of notaries and generally simpler bureaucracy is a good thing - company formation cost me £25 and there's even an API for it now. For small companies the duties are simple and the required accounts basic. Real estate purchases in England still have a number of surprises for which you have to retain a solicitor, but in Scotland the system is almost entirely standardised. (Real estate involves not only surprises in or below the building but in feudal or other attached liabilities or easements (e.g. "chancel repair liability") - and don't get me started on the US weak title system)
kaiwen1 8y ago
In the Philippines the notary is the scam. Only lawyers can be notaries. The lawyers association (the Bar) for each jurisdiction sets the fee. Any lawyer caught charging lower than the standard fee is subject to sanctions. And what's the fee? It's a percent of the value of the contract. For land sales it's typically 2-3% in most jurisdictions. And of course, this scam hits the poor the hardest. They get stuck paying these preposterous fees while the rich just cut deals with the attorneys.
mjevans 8y ago
It should have the effect of discouraging bad behavior by any party in the contract as well as encouraging a more succinct and simple contract. I am constantly amazed at how much 'boiler plate' stuff needs to be re-defined in each and every contract (at least in America). It's as if the concepts of a standard contract, where one thing is exchanged for another or payments are made on a term, doesn't exist.

dv_dt 8y ago

You can read those docs, it just requires that you insist on it delivery of documents ahead of time, which may require your real estate agent to actually schedule an extra day or two for the timeline of closing.