Sunday, April 24, 2011

Landsafe Agreement: Added Perspective

I would like to share the following that was sent to me…. for a more “legal” perspective about agreements such as the Landsafe Agreement…. Hope this helps!

I have added some on my own comments in parentheses and italics….

"This contract taken in totality is likely not enforceable because the effect of its terms is overly oppressive and does not create for even bargaining positions, but rather creates what amounts to servitude. It seems to create a contract of adhesion (take it or leave it terms), for which there is no opportunity to counter, and has terms that attempt to cover for potentially illegal acts as well as some level of unconscionability to it (by its terms it 'shocks the senses').

"A simple solution if you wish to do business with Landsafe is to establish a separate entity from your existing one, for the sole purpose of dbw Landsafe (yeah, but how many appraisers either would know they could do this, think to do it, or want to have to set up a separate operating entity?).

"Assuming the disclosure rule is even enforceable, then all they really could demand info on is what they have in terms of their relationship with you... and that is a specially created entity that merely discloses what they already know. To be able to do otherwise puts them in jeopardy of an employer/employee relationship. Doubtful they'd ever demand on that.

"Section 7.1 is absurd. Any first year law student could tell you that you cannot draft private agreements around your duty to follow laws now or in the future... If the government makes a law, you have to follow it, plain and simple, and no amount of contract law between private parties can speak otherwise. This would be tantamount to saying, for instance, if they insisted you violate a law based on this clause, how then, would they be able to enforce it? Go to court and tell the judge to enforce a contract clause that then has the appraiser breaking the law?

"Sections 8.1/2: Ethically, appraisers more or less imply they are competent in accepting assignments, and really, who can decide? What of someone who appraises resorts, or hotels, or golf courses? Where does 'regional competency' play into that?

"If you become a whistle-blower on Section 13.3 you are usually protected. Attorneys are barred from disclosing what a client says if it is in violation, and they cannot counsel someone to break the law. You cannot be sued for violating an agreement that says you will not disclose the illegal acts of another - see 7.1. (above)

"You have not violated anything you have not signed.

"As for Texas, assuming they seek enforcement on a contract clause they may have a shaky leg to stand on, however, you could always file to seek removal on hardship grounds, that for you to go to Texas in order to enforce on them violates due process. They cannot have a contract enforceable in Texas for which Washington has licensure jurisdiction... Will the Texas appraisal board investigate your bad appraisal? Not hardly. Besides, the property that is the subject of the contract is in Washington, and services performed in connection with this may well dictate where the proper forum is.

"Better yet, make it really dicey: Try filing in federal court and state court simultaneously, having the first court to hear have removal to the other if it is deemed proper. The federal courts would be proper due to diversity of citizenship if they are a Texas corporation doing business in Washington, assuming you can establish minimum contacts here (might be tough but not impossible). But you could also file under violation of some federal banking law, in which case federal courts would have jurisdiction. And if you get this contract entered in, you can be sure the judge will not consider them in an unsympathetic bent. BofA has enough problems already."

Stan Sidor, MAI
Kidder Mathews
Valuation Advisory Services

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