This friend lives in DC and was looking to buy a small condo (which takes a small fortune in that market). After reaching an agreement on price (what one might think to be the main sticking point in a negotiation), he ran into a roadblock with some of the terms of the purchase contract. The seller--a corporation that had built these new-construction units--insisted upon a term in which, should the buyer die before the closing date, the sale would be required to continue through the estate of the deceased buyer. In essence, the seller was going to force the sale upon the grieving family of a deceased son or brother or husband if death should happen before closing. The burden upon the corporation simply to put the unit back up for sale would be small. The emotional and financial burden upon the grieving family of the buyer would be enormous.
I cannot fathom the selfishness and greediness that would have prompted a party to put this clause into a contract in the first place. I have even less understanding why a party would continue to insist upon enforcement of such a clause if the unfortunate death were to occur. In my friend's case, it would have saddled his widowed mother with the emotional and financial burden of traveling to DC from Arkansas and, in addition to handling whatever probate issues he might have had, find some way to continue with this significant purchase (certainly in Arkansas or Tulsa property terms) and/or try to work out some kind of a sale.
No doubt many people enter into such agreements because they feel it is the only way to obtain that which they seek--a house, a loan, a business proposition--and many don't consider the effect of such clauses, which is what the corporation counts on. Luckily for my friend in the above-scenario, he, being an attorney and well-versed in our profession to imagine the worst possible scenario happening, walked away from the deal. He didn't have to have the condo, though he would have liked to own it.
In many others' cases, though, the option of walking away may not be there, nor do they have the bargaining power to negotiate a clause out of the agreement because of the financial disparity of power. One would think that such a time might be the perfect opportunity to be more fair; I think most see it, however, as simply one more business opportunity.
It is one thing to negotiate fairly and even-handedly to a deal's resolution, and to hold a party to that deal. It is quite another to negotiate a deal to take advantage of another's weakened position simply for financial gain, or, alternatively, to hold a party to an unfair position when one has no need for the term for which one has bargained and it is clearly a term that is a hardship on the other party.
And it remains my opinion that exercising such greed is harmful not only to the unfortunate party to the deal. In the condo scenario, it would have financially ruined possibly three families--my friend's estate, his mother, and his sister--and that financial burden would have trickled into other financial obligations, and so forth. In other circumstances, exercising continued greed can mean the difference between an employee bonus in a small corporation and barely staying afloat. It doesn't just affect you.
2 comments:
Here I go, beating the same old drum again, but I think it's pretty simple. Shit like this happens because the board of directors of the McMansion Corporation (or whomever your friend was going to purchase his condo from) have one obligation and ONE OBLIGATION ONLY: to maximize profits for the sake of their shareholders. They literally can get sued if they make any decisions which their shareholders deem not to be in their own best interests.
So a company culture gets born around this idea - that nothing matters except profit maximization - and the guy who dreamed up putting this little clause into their standard contract probably got a bonus (and, per his company's culture, he probably didn't think of this innovation as any different from, say, re-designing the toothpaste tube so that the mouth is bigger and people use up their toothpaste faster and buy more toothpaste and colgate makes more money. Or whatever.) And if you doubt the potential power of a fuzzy term like "company culture," go watch "Enron: The Smartest Guys in the Room." The tapes of the dishonest energy traders laughing at their own "genius" while California is experiencing rolling blackouts are pretty telling. They were clearly in an environment in which that behavior was not only tolerated but valued.
But I'm digressing. My point is this: when you position only one set of considerations and only one set of stakeholders at the top of the heap, BS like this is what comes out of it. The same would be true if you positioned some OTHER set of stakeholders always at the top. It's an out-of-balance system, but my guess is that it will have to get much worse before it gets better. (i.e., we still have the perception that the benefits of having a society full of successful corporations outweigh the drawbacks.)
But I am bitching and moaning about this pretty much ALL THE TIME, so I'll spare you the full rant.
I will say this, though, Audra. I am a little behind the times and just read your posts about John Adams, and the one thing that has been at the forefront of my mind lately where government is concerned is the issue of campaign finance. Like, when John Edwards got asked what he would make his #1 priority as president, his modern-day equivalent of the mission to the moon, he said campaign finance reform. At which point, a whole world of people turned their glassy-eyed attention to Clinton and Obama. But my heart leapt! I don't think campaign finance reform is the cure-all for what ails us, but I do think it could go a long way. And I've finally been made aware of a potential, partial solution that is within our grasp: publicly financed elections.
Did you know that in order to stay in office, the average US senator has to raise $20,000 a day for his entire 6-year term? That's bananas. Who on earth is going to do a good job at legislating if he's got THAT hanging over his head?
I won't waste your time with my full rant on this subject (maybe I'll get off my ass and write a full post about it at some point). But there have been some REALLY interesting cases in the two states that have instituted publicly financed elections (Maine & Arizona). And here are some places you can look for more info on money in politics...
(And certainly, looking into this stuff has made me more hopeful than I have been in a VERY long time about the possibility to put the Margaret Mead idea into action.)
opensecrets.org (raw data on money in politics, and a whole lot of other stuff...)
publicampaign.org
www.lessig.org/blog (the free culture guy is shifting his attention to looking at corruption in our system of government - note that his ideas of systemic corruption are different from, say, the idea of an individual taking a bribe.)
Here's another angle to consider.
Mind you, this is coming from my perspective (in my head) and I'm tired.
But I think it's possible that, since there is a set rule of how businesses function and what is important to them (i.e profit maximization), people walk into businesses and expect that, and in turn they behave a certain way.
I think that makes it a lot harder to run a quality business. NOT CARING about quality is the path of least resistance. And the path to wealth (creating time to do something beyond putting bread on the table) - serving shit to the multitude who don't know any better and couldn't give a fuck.
But I'm tired, so maybe my perspective is skewed.
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