Remember when you were in school and you got an assignment, but the teacher left the due date relatively open? They either said something like, “the end of March” or forgot to give you one all together? As children and teenagers, those open deadlines were glimmers of freedom. We’d take all the time in the world and use this vague due date as a way to postpone completing the assignment until absolutely necessary. As professionals, we certainly would never be caught procrastinating on deadlines either. Right? Right. We’d never be caught procrastinating. But, as we all know, give anyone an open deadline and they’ll keep placing it lower and lower on the priority list.
Unstructured deadlines in a transaction will allow one or both parties to procrastinate, causing precious time to be wasted. A lack of firm timeframes also can impact the enforceability of an agreement down the line if one party is dissatisfied with another’s performance.
Take, for example, a simple lease. If the agreement does not include a specific rent payment date, and, instead, says something like “each month the lessee will pay $200,” you know the lessee will avoid paying until the end of the month. Or, lessee may elect to make payments at different times of the month, as is most convenient for the lessee. Similarly, if someone is fronting money for the opening of a business, the promissory note should make sure that the borrower has a concrete deadline for when they must pay the money back. A concrete deadline should have the exact day, month, and year.
To some this will sound like an obvious requirement of any agreement. However, often when small business owners draft their own agreements, these details are overlooked or thoughtlessly thrown in at the tail end of the negotiation. It is this kind of oversight and procrastination on what seems like small details that can cause important deadlines to be left out of agreements. Don’t fall into that trap. Set clear deadlines so that you won’t have to worry about the other party to the agreement procrastinating on payment or something more important.