Untrained Monkey Standard
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I think this month has seen the fewest number of entries since this thread began. My hair has been on fire at work and home all month.
I am involved in trying to close a land purchase in Mexico and we are doing a joint venture with the land owner, where we give some cash upfront and then give him a percentage of revenues as the residential units we plan to build are sold.
Buried deep in the official legal document that describes this relationship, I found a provision that requires our entity to act "at all times as a good father of the family."
I thought maybe someone just did a flowery translation from the Spanish, but the Spanish actually says the same thing. The rest of the 30-page document is in the standard legalese you would expect. At first I thought it was joke, but given the context, I think the attorney for the other side put in this language seriously.
All this reminds me of a 400-page bond indenture I worked on as a young banker, and in the covenants section, an attorney had slipped in the Ten Commandments to see if anyone was reading.
Examples of this abound...a classic is people slipping in a provision on how the "muskrat pelt income" is to be divided (e.g., in a real estate deal having nothing to do with muskrats).
Finally, I am a member of an LLC that was formed in the go-go days of the dot-com boom. Some people at my work created it to invest small amounts of our personal capital in early stage companies..."pass the hat" deals, if you will. It was only open to a few folks in the office...we wanted to risk our own money only.
The people who formed it knew nothing about high-tech or biotech, and so they wisely had us agree, in the official legal formation docs, to hold them only to the "untrained monkey standard" of investment expertise. We didn't lose quite 100% of every investment in that LLC, but we sure gave it the old college try.
And separately, as it turned out, some of the "best and brightest" on Wall Street had the same "untrained monkey standard" of investment expertise when buying a pool of home loans where the borrowers were making $20K per year (if they even had a job) but were loaned $700K on a $690K home purchase. What could possibly go wrong with that plan?
I am involved in trying to close a land purchase in Mexico and we are doing a joint venture with the land owner, where we give some cash upfront and then give him a percentage of revenues as the residential units we plan to build are sold.
Buried deep in the official legal document that describes this relationship, I found a provision that requires our entity to act "at all times as a good father of the family."
I thought maybe someone just did a flowery translation from the Spanish, but the Spanish actually says the same thing. The rest of the 30-page document is in the standard legalese you would expect. At first I thought it was joke, but given the context, I think the attorney for the other side put in this language seriously.
All this reminds me of a 400-page bond indenture I worked on as a young banker, and in the covenants section, an attorney had slipped in the Ten Commandments to see if anyone was reading.
Examples of this abound...a classic is people slipping in a provision on how the "muskrat pelt income" is to be divided (e.g., in a real estate deal having nothing to do with muskrats).
Finally, I am a member of an LLC that was formed in the go-go days of the dot-com boom. Some people at my work created it to invest small amounts of our personal capital in early stage companies..."pass the hat" deals, if you will. It was only open to a few folks in the office...we wanted to risk our own money only.
The people who formed it knew nothing about high-tech or biotech, and so they wisely had us agree, in the official legal formation docs, to hold them only to the "untrained monkey standard" of investment expertise. We didn't lose quite 100% of every investment in that LLC, but we sure gave it the old college try.
And separately, as it turned out, some of the "best and brightest" on Wall Street had the same "untrained monkey standard" of investment expertise when buying a pool of home loans where the borrowers were making $20K per year (if they even had a job) but were loaned $700K on a $690K home purchase. What could possibly go wrong with that plan?
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