Contractually Bound, Litigation of Business | Business of Litigation

Jùdà de chénggōng–巨大的成功

Great Success

I closed the sale of a Chinese restaurant today. It was a typical seller-financed, small business sale. Actually, it even went a little smoother than usual. Just like every single transaction I have ever done, there is always something (usually plural) that complicates things. If you’re lucky, it is no more than a few minor misunderstandings that are easily repaired with a little extra time, patience and understanding.  But for this deal, there was just one. Kinda big one.

Always Something(s)

The buyer and seller only spoke Chinese. My savior (a/k/a my translator) was a Laotian-American woman who had been in Minnesota for a long time. You could hardly tell English was her third language. Problem was, she’d never dealt with legal lingo before and did not have any related business experience. I spent a little extra time when we first met so I could get all the terms and conditions thoroughly explained to me. It all went from Chinese through the lay translator person and then to me. I was more attuned to the increased possibility for misunderstanding so I double/triple checked everything and made sure I understood. Drawing pictures and hand signals seemed to help. Or maybe they were just being kind and polite? Or maybe it’s funny watching a lawyer do hand signals at a conference table? Or maybe all the above?

Meeting of the Minds

At the end of the meeting, I felt confident I understood how the buyer and seller wanted everything structured. Nonetheless, I set it up so there was plenty of time for the buyer and seller to check and question the documents before the closing with the ability to make changes and with hope it would go off as uneventful as possible. I was a little leery when I got the call to set up the closing because I hadn’t edited anything major in the documents. My first drafts are usually pretty good but there is always something that needs tweaking. Or there is something that wasn’t fully explained, understood or written clearly enough. But everything seemed fine and that made me nervous. Nonetheless, the buyer and seller said they were satisfied. They both had it all translated for themselves. They it all reviewed and thought everything was understood.  I was apprehensive, but set up the closing anyway.

ABC–Always Be Clear

As usual, I explained all the big points in each document to make sure everyone understood everything and agreed before anything was signed. The numbers were the easiest. I didn’t have to say much after passing out the amortization schedule, except pointing out where the payments, interest, maturity date, etc. were located on the page. “If there’s no payment made, then . . .”–seemed like a universal phrase. To answer the question if anything could be changed after today, I shook my head and the translator said no.  I explained (with awesome hand gestures) they call it a “closing” (clasped hands together with finality) because once it’s signed, the deal is shut tight and complete (smack open palm on table top). I seemed understood and was proud of my clarity, with the right touch of drama. But then came the hardest part. The most difficult clause.  Whether I have to explain it to a seller or buyer, a high school drop out or summa cum laude graduate, a doctor or dishwasher, a janitor or engineer I never seem to make it clear.  It’s tough enough when the client speaks English, let alone having it translated into Chinese. It was the dreaded  Indemnification provisions.

Unintelligibly Inarticulate

Because I was so nervous and had built up anticipation to a great degree, I struggled and couldn’t pronounce anything clearly: IN-DEMNE-FACI-ATION. IN-DEMN-ICTA. IN-DEM-NE-FI-CA-TION! Yes! (maybe no one will even noticed if I look stone-faced enough) I took a deep breath and slowed down.  I tried to explain it in plain English that could be translated. Once again, I stumbled and mumbled and was incomprehensible. I got frustrated.  Why words all ran togetherintoone. The frustration made me lose patience. As I was reaching for my pen and yellow pad, to draw something brilliant that would clear everything up–it felt like something snapped in my neck. I felt a spark and it all came clear in my head. I am going to always use this in every sale from here on out. I will use this no matter what the folks at the table speak as a first, second, third or fourth language. This I promise myself.

Recompensations for Indemnification

I will never, ever use the words “indemnification” or “compensate” or “reimbursement.” I will never again say “subsequent” or “consequential.” I will never speak of “preceding” or “antecedent.” I will never use these words again when explaining indemnity clauses to anyone as long as I shall live. In their stead, I will only explain indemnification by using these simple, defined key words:

Preceding means before.

So say before.

Subsequent means after.

So say after.

And indemnification?


It means protect and take care of.

So say Protect and Take Care Of. Using these terms everything went well. My words were easily translated with just one phrase apiece. So in the end, today’s closing was a Great Success (巨大的成功). I will use my new terminology from now on since today they Shǐ wǒ shòuyì fěi qiǎn (使我受益匪浅). MKT


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