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The Boating Barrister: Slim Down a Contract with The FAAT Approach

By John K. Fulweiler, Jr., Esq.

My birthday is in March. Spring’s promise and the ever-brightening arc of the morning sun makes March an optimistic month to mark passing time. On the other hand, March is a sketchy son-of-a-gun, tempting buds and blooms with warming temperatures and then pulling any promise of prematurity with plunging mercury and cutting winds. Many a childhood birthday was spent holding the handlebars of a new bike in ankle deep snow! Still, statistics favor the sailor this time of season and we’re all about to encounter a contract or two, whether it’s for a new engine installation, dockage, or a yacht policy. 

If you’re like me (and, heck, I’m in the business of parsing this kind of paper!), a contract’s small font size, compressed lettering and multiple pages make you want to shake your pipe and shout, “Millions of blue blistering barnacles!” And we all know the feeling as your pen hovers above a contract’s signature line. “They’re so many words,” we whine. Too much text to care. Can’t be enforceable. I’ll say I never read it.  Umm…Maybe not the best strategies. Instead, consider an approach that helps you quickly spot some important contractual terms.

Most consumer contracts, whether for rental cars, airline tickets, cruise travel or leases, have a lot of terms in a tight space. If you don’t have the time to read the whole thing, consider starting with the last page and working backwards. The corporate counsel who drafted this bloated contract probably stuck some of the bad stuff toward the end, so start there. Working from the transom, keep the acronym FAAT in mind and it’ll help you spot trouble. 

The “F” is for forum term. This language is like a poisonous adder lying in tall grass, as it specifies where the parties will resolve disputes and it’s typically bundled with choice of law language. It’s very easy to read past this language without realizing the problems it can cause you. That is, the contract may specify all disputes must be resolved in some state you’ve probably never visited, applying that state’s law. Many cruise line ticket contracts (and, yeah, the Supreme Court has said their terms are typically enforceable) generally require any suit against them be brought in a certain county in South Florida no matter where you live, where you boarded the ship or where the injury occurred! Corporate consolidation in America keeps creeping ahead, meaning your local marina might be owned by a California entity making the possibility of some “forum term” being included in your annual dockage contract a real possibility. Don’t see the problem? Ask yourself, “Will it be economically feasible for me to pursue an $8,000, $16,000 or even $24,000 claim in a faraway courtroom?”  Sadly, the answer is probably not and you can see why corporate counsel love this language.

The double “AA” stands for arbitration and attorneys’ fees. Arbitration is a binding alternative to litigation. In my opinion, stay away from arbitration because like the promise of a boom furler, it’s not any quicker, cheaper or easier. If a contract calls for the arbitration of disputes, it may likely prevent you from filing a lawsuit. The other provision hanging around arbitration language may explain how a “prevailing party” or one party over the other is entitled to attorneys’ fees. An attorneys’ fees provision can really sting and muss with your optics in picking a path forward.

The “T” signals a time for suit provision. Many contracts have language stating you must commence arbitration or litigation within a set period of time, which is different (and usually sooner) than the applicable statute of limitations. For instance, those pesky cruise ship passenger tickets often require suit be brought within one year. Miss a time for suit provision and you may have lost your claim. Similarly, keep an eye open in these waters for a “notice” provision requiring (as a so-called predicate to bringing suit or filing arbitration) that you give “notice” of the injury or loss within so many days or months after it first arises. These “notice” provisions may or may not be enforceable, but whatever the case, an opposing counsel will beat on a notice violation like a three-year-old with a kitchen pot. 

Prudent mariners read and understand what they’re being asked to sign. For the rest of us, remember the risk you run in signing without reading is being stuck with an enforceable contract. (Don’t believe the hype: courts give tremendous weight to one’s signature and typically presume that if you signed it, you read and understood its terms!) While this is only general information, consider speaking with your attorney to learn more and, if pressed, consider applying the FAAT acronym to spot a few of the problem areas. You might also try negotiating a specific contract term and I’ve heard of (but can’t recommend) people crossing out language in contracts, initialing the edit and returning it with the promise that no one will review it until a dispute arises! 

The Second Amendment and your boat next time. And, yeah, you’ll get to hear my theory of how lifted trucks and high-capacity magazines don’t make the man. Good reading!

Underway and making way. 

John Fulweiler, EsqJohn K. Fulweiler, Esq. is a Proctor-in-Admiralty representing individuals and small businesses in maritime matters including personal injury claims throughout the East and Gulf Coasts and with his office in Newport, Rhode Island. He can be reached at 1-800-383-MAYDAY (6293), or visit his website at saltwaterlaw.com.


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