A few weeks ago, as part of my Ask the No Nonsense Lawyer program, I had the privilege of interviewing Ms. Carol Emory, the founder of Emory Law, a firm that specializes in international business legal issues. In talking about the many legal pitfalls that businesses, and especially entrepreneurs with limited resources, can encounter when sending their goods across international borders she told me about the case of the crispy Christmas trees.
It all started in the U.S., in the great Pacific Northwest. A contract for the sale of goods was negotiated and signed. An Oregon Company had just sold a truckload of freshly harvested fir trees to a customer in Mexico just in time for the holiday season. It was their first foray into the Mexican market and they were justifiably excited. (They might have even hung their stocking by the chimney with care. Who knows?)
What the seller didn’t know, however, as they watched the truck roll out of sight was that when the goods reached the Mexican border they would be reloaded onto another truck for the final leg of their journey into the land of Mariachis. That might not have been so bad but for the fact that while the trees were waiting to be offloaded and reloaded they baked in the hot sun for hours. ?Ay, ay, ay!
You guessed it — by the time the trees reached their final destination they were DOA — dead on arrival. That scrawny Charlie Brown Christmas tree looked lush and full in comparison. As you might imagine, the problem blew up into an ugly dispute that quickly turned into a lawsuit.
To keep your business transactions (not just the international ones) from turning into crispy critters it pays to think through and anticipate where things might go wrong. That might sound like a lot of work up front that you don’t have time for. But the old adage about a stitch in time saves nine certainly holds true here. Otherwise you may just have to make time for a lawsuit later.
Assumptions about shipping logistics led to unarticulated expectations. It is precisely because they were assumptions that the expectations were not set forth in the written contract. Unfortunately, all it took was a few hours in the sun to create the transparency necessary to surface the assumption and the ensuing misunderstanding resulted in a disappointed customer instead of a delighted customer.
If the disappointment is slight and your relationship with the customer is good you can usually recover the fumble. If not, you can find yourself on the receiving end of a lawsuit. That’s why it makes sense to periodically review your assumptions. The other option is the school of hard knocks.
Sure you could roll the dice and count on good luck to keep you out of trouble. But if you’re serious about good business practices in your operation you’ll want to ask yourself what assumptions you make in your business transactions. How badly would your business be hurt if any of those assumptions were to backfire?