Legal Principles to Remember

Legal Principles to Remember

Nine Legal Principles to Remember
By John G Pfeiffer, Attorney And Counselor At Law

1. Never sign a document when you feel pressured to do so.

Wait until

1) You get home;

2) You sleep on it; and

3) You discuss it with your lawyer and/or the Association.

The reason you are being pressured to sign now is because the other party believes that you would not sign if given enough time to think about it. Most agreements that must be signed today could have, and should have, been given to you last week or last month to review.

This rule applies not only to new agency contracts but to documents such as a meeting summary given to you at the end of a meeting.

2. Always memorialize any oral statement, promise or guaranty given to you.

Take careful notes of the Company's oral statements, promises or guarantees and then send a letter memorializing all important matters. You need not memorialize everything said -- only those statements that help you and are important to you. Your letter should be clear and firm but, of course, can also be cordial.

3. When you memorialize evidence of an oral agreement, you must also collect

evidence showing receipt by the entity against whom you wish to enforce it.

You can do this many ways:

Deliver the document in person and have this delivery witnessed by a disinterested person willing to testify to the delivery.

Send the document by certified delivery. If you need to show receipt by a particular person, not merely the Company, you can send it "restricted delivery." Certified letters, of course, are sometimes perceived as adversarial.

Send multiple copies of the document. For example, send a copy by fax and mail or send copies to multiple persons (in authority) at the Company. Keep your fax transmission records showing that the fax was transmitted without problems. Multiple delivery of non-certified copies is very useful when attempting to destroy the credibility of any claim that the document never arrived. This method has the advantage of being low-key and non-adversarial.

Get a written acknowledgment of receipt from the addressee. This can be done discretely. For example, if addressee sends a return letter referencing your letter and answering a question contained in your letter.

4. When you receive a letter memorializing a meeting or oral statement, read it very carefully. Object promptly, in writing, to any inaccuracies.

The reason anyone sends you such a letter soon after a meeting is to memorialize evidence to use against you, if necessary. Read these letters very carefully. Memorialize your objections to any inaccuracies and give a correct account of the statement or event.

5. Urge your association to keep an evidence file for the agents' use.

Evidence collected by one agent can be used by another agent. The Association is an ideal clearing-house for this evidence and information. For example, if you are trying to prove wrongful termination of an agency contract that can be terminated only for good cause, evidence provided to the Association by other members may show that the Company told other agents that the

Legal Principles continued:

Company would only terminate the contract for good cause.

6. Consider which company employee is making a statement, promise or guaranty to you.

The Company is only bound by the statements and promises of its employees who are in positions of some authority. Which Company employees are in such positions depends on job function as well as title and usually includes a company's managers as well as officers. By contrast, the vice president's secretary does not have this authority no matter how much influence that secretary has with her/his boss. A person who has authority to deliver a document to you, may not have authority to modify it.

When in doubt about the power of a particular Company representative to bind the Company, consult your attorney.

7. Start today to prepare a file of evidence, notes and allegations to use if you ever need to do so.

This file should show that:

You are a model agent -- successful, well liked, hard working, etc. This evidence can be Company comments, client "thank you" letters, etc.

Keep a file of all company statements about your performance -- even negative comments. The Company keeps all negative comments about you and it helps for you to keep them as well. Keeping all Company comments about you helps you determine whether your performance is evaluated consistently. It may be helpful to compare the Company's past statements with its future ones.

Keep important agency documents even after they expire. For example, keep your past agency agreements even after you sign a new one. Keep your old commission schedules and performance evaluations.

Collect and keep detailed evidence or wrongs done to you. For example, if you are treated unfairly, snubbed, treated differently than similar agents, note this and describe dates, circumstances, witnesses, etc. This evidence and your memorialization of the evidence should be contemporaneous with the injury, if possible. Keep such evidence even after circumstances change. For example, keep the evidence even if it pertains to a particular district manager who was subsequently transferred.

Collect and keep this evidence even if you are not angry or unhappy with the Company. You may be subject to cumulative wrongs and later be very glad that you preserved evidence of early problems.

8. When meeting with the company, you have a right to bring your lawyer.

There is no basis for the Company to claim that your lawyer should be excluded because the meeting is confidential. Lawyers have sworn to keep all client confidences secret and not even a judge can force your lawyer to reveal your confidences.

In some cases, the Company has the right to choose not to meet you if you do bring your lawyer with you. However, it may be better to handle the matter in writing anyway.

As explained below, you may memorialize that the Company refused to meet with you solely because you exercised your right to seek the assistance of legal counsel.

9. Contact an attorney promptly when faced with a big decision or suffering significant harm.

Often a little good advice beforehand can save a lot of money and prevent a lot of headaches later. Some of your rights may be lost forever if not protected in time.

John Pfeiffer is an attorney practicing insurance and insurance agency law throughout the US. His clients include captive agents as well as independent agents. He can be reached at:

Insurance Exchange Building
175 W Jackson Blvd.
Suite 1262
Chicago, IL 60604
(312) 986-8121.