November 10, 2014

The Importance of Documentation


By Russ Garrett

Fall 2014

There you are, diligently working.  Your assistant walks in, hands you a short, tidy stack of papers, and says, "You’re not going to like this" and walks out, lightning fast.  As you scan the papers you see “court summons,” and a complaint.  You’re going to have to respond to the complaint, and hire an attorney. How long do you have to respond? What’s the next step?  Where did this complaint even come from?  


Here’s another scenario.  A sizeable amount of goods were shipped to your customer.  Everything was confirmed and acknowledged by e-mail.  When the invoice isn’t paid, you follow up to find out why.  You find there were problems with some of the product’s condition upon arrival.  The buyer says they spoke with Joe in your office, and Joe told them another set of product would be shipped.  You check with Joe, and Joe recalls having a conversation, but kept no record of it.  Joe tells you he didn’t promise any new product, but thought he asked them to pay for the product that was acceptable and return the unacceptable product. Nothing else was shipped, returned, or paid.  Joe retained no notes of the conversation.  However, the buyer documented the exact day, time, and even the words used in the conversation.  The buyer confirmed, in writing to Joe, the agreement to ship new product and can quickly produce a copy of that email. You track it all back to Joe, who sheepishly tells you that the email probably got lost in his inbox. 


What do you do? How is this case resolved?  The documents your buyer created and retained demonstrate the nature of the discussion.  They stored the documents in an accessible location and produced them when needed.  You, on the other hand, have nothing in writing to substantiate Joe’s recollections.


These stories are more typical than you might imagine and demonstrate the first line of defense in litigation (or of resolution with your customer before litigation)—creating, retaining, recalling and reviewing your documentation, and understanding the response time.  The plaintiff has been thinking about this for some time, but you have only 20-30 days to respond.  What documentation will quickly get your lawyer up to speed, and support what happened? 


When I receive a phone call from a client concerning these types of issues, I start the twenty questions game.  I ask to look at e-mails, invoices, checks, bills, notes in electronic systems, handwritten notes, and anything else in the hard copy file documenting the account. 


Often stalemates occur because there is a disconnect in communication.  It's important to document what was said and agreed upon and to be able to recall any communication and confirmations that occurred between the parties.  This seems simple, but often isn’t.  Jumping from project to project can result in failure to document agreements or confirmed deals.  Rushing through e-mails can create problems as well, such as errors, missing words that alter the meaning of deals, and missing confirmations.  No matter how hurried you are, always pay attention to numbers, quantities, prices, and check important points to make sure you’re communicating clearly.  Read things thoroughly, document all agreements, and keep everything organized.  


So there you are with that short, tidy stack of papers, but it’s okay, because you know you have everything documented. 


Back to Top