Contract with Solicitor

[Elvisbarney]

A quick question please.

Does a solicitor, entrusted by a client in time-honoured fashion to securely retain property deeds, actually enter into an enforceable contract by so doing, even though there is no monetary cost to either party or formal written document in existence?

I note the SRA advises the relationship with "the client is a contractual one, which carries with it legal, as well as conduct obligations."

By extension, can a lawyer in agreeing such an undertaking and who subsequently fails to protect an essential legal document be pursued through the courts for any consequential losses as a result of breaching of such a contract?

I thank you.

[Clitheroekid]

Does a solicitor, entrusted by a client in time-honoured fashion to securely retain property deeds, actually enter into an enforceable contract by so doing, even though there is no monetary cost to either party or formal written document in existence?

In simple terms, yes. The contract is known as a `retainer' and is an ongoing obligation until either party terminates it.

Although the solicitor may choose not to charge for the storage there is nonetheless a value to them, as there's a good chance that if the client wants to take any action involving the documents they will instruct the solicitor to deal with it simply because they're already holding the documents.

By extension, can a lawyer in agreeing such an undertaking and who subsequently fails to protect an essential legal document be pursued through the courts for any consequential losses as a result of breaching of such a contract?

Again, yes, in principle. So if a client loses a Will that they were holding they could be expected to stand the additional costs of obtaining probate. If they lose title deeds they would be expected to stand the cost of reconstructing the title to a marketable state.

[Elvisbarney]

Thankyou once again Clitheroekid.

As you may just recall this is an ongoing saga I am experiencing...won't bore you with the details, but my first port of call in seeking redress was the Legal Ombudsman. Never again, fortunately by not accepting the decision the adjudication is not binding.
Onwards and upwards to the small-claims....

[Charlottesquare]

Does a solicitor, entrusted by a client in time-honoured fashion to securely retain property deeds, actually enter into an enforceable contract by so doing, even though there is no monetary cost to either party or formal written document in existence?

In simple terms, yes. The contract is known as a `retainer' and is an ongoing obligation until either party terminates it.

Although the solicitor may choose not to charge for the storage there is nonetheless a value to them, as there's a good chance that if the client wants to take any action involving the documents they will instruct the solicitor to deal with it simply because they're already holding the documents.

By extension, can a lawyer in agreeing such an undertaking and who subsequently fails to protect an essential legal document be pursued through the courts for any consequential losses as a result of breaching of such a contract?

Again, yes, in principle. So if a client loses a Will that they were holding they could be expected to stand the additional costs of obtaining probate. If they lose title deeds they would be expected to stand the cost of reconstructing the title to a marketable state.

Do you not down South need consideration?

I know up her we may have a contract without consideration but is that possible if in E & W?
(Offer/acceptance/consensus/consideration)

[Clitheroekid]

Do you not down South need consideration?

I know up her we may have a contract without consideration but is that possible if in E & W?
(Offer/acceptance/consensus/consideration)

Although it could be argued that there is consideration - the likelihood of further instructions arising out of storage of the documents - it's not a necessary element of the arrangement. This is because of the concept of `bailment' (I don't know if it exists in Scotland) whereby a `bailee' who accepts possession of goods incurs a duty of care to the owner of the goods (the `bailor').

Such liability exists even where there is no consideration, i.e. where the goods are being stored free of charge (known as `gratuitous bailment').

[Charlottesquare]

Do you not down South need consideration?

I know up her we may have a contract without consideration but is that possible if in E & W?
(Offer/acceptance/consensus/consideration)

Although it could be argued that there is consideration - the likelihood of further instructions arising out of storage of the documents - it's not a necessary element of the arrangement. This is because of the concept of `bailment' (I don't know if it exists in Scotland) whereby a `bailee' who accepts possession of goods incurs a duty of care to the owner of the goods (the `bailor').

Such liability exists even where there is no consideration, i.e. where the goods are being stored free of charge (known as `gratuitous bailment').

No idea if we have similar, I only ever studied idiots law for accountants which covered contract plus some other bits and bobs, mostly now forgotten, though for some reason the contract part stuck a little better than the rest.

So if I am understanding correctly in effect the obligation does not arise from a contract per se but instead from the bailment obligation.

[patrickmacqueen]

So if I am understanding correctly in effect the obligation does not arise from a contract per se but instead from the bailment obligation.

Alternatively the solicitor continues to be subject to the contract under which they originally acted for the client. The client will have provided consideration in the past in the form of legal fees.

[Elvisbarney]

Thanks for the clarification.
I also like the interpretation of a contract as outlined by the Marx brothers:-

Chico: "This contract is no good. It's got no loopholes."
Groucho: "Just sign it and we'll put the loopholes in later."

[Clitheroekid]

So if I am understanding correctly in effect the obligation does not arise from a contract per se but instead from the bailment obligation.

It could very well be both. The vast majority of solicitors now have written terms of business with clients that will cover storage of documents, so that there's a specific contractual obligation.

But the bailment obligation is independent of that, and exists irrespective of any contract.

[Charlottesquare]

Thanks for the clarification.
I also like the interpretation of a contract as outlined by the Marx brothers:-

Chico: "This contract is no good. It's got no loopholes."
Groucho: "Just sign it and we'll put the loopholes in later."

Akin to my one attempt at levity in a piece of university work, for accounts, where I wrote :

"A verbal contract isn't worth the paper it's written on." Samuel Goldwyn

And then got thoroughly castigated as humour had no place in accountancy.

[dionaeamuscipula]

No idea if we have similar, I only ever studied idiots law for accountants which covered contract plus some other bits and bobs, mostly now forgotten, though for some reason the contract part stuck a little better than the rest.

The estimable Professor Flint? Me too. I always wondered what happened to his son, young Douglas, who preceded me through the hallowed halls of Kelvingrove.

DM

[chas49]

Thanks for the clarification.
I also like the interpretation of a contract as outlined by the Marx brothers:-

Chico: "This contract is no good. It's got no loopholes."
Groucho: "Just sign it and we'll put the loopholes in later."

Akin to my one attempt at levity in a piece of university work, for accounts, where I wrote :

"A verbal contract isn't worth the paper it's written on." Samuel Goldwyn

And then got thoroughly castigated as humour had no place in accountancy.

Off-topic but (according to Wikipedia):

A verbal contract isn't worth the paper it's written on.
A misreporting of an actual quote praising the trustworthiness of a colleague: "His verbal contract is worth more than the paper it's written on". The identity of the colleague is variously reported as Joseph M. Schenk in Paul F. Boller, John George, They Never Said It (1990), p. 42, or as Joseph L. Mankiewicz in Carol Easton, The Search for Sam Goldwyn (1976). Goldwyn himself was reportedly aware of - and pleased by - the misattribution.

[Charlottesquare]

No idea if we have similar, I only ever studied idiots law for accountants which covered contract plus some other bits and bobs, mostly now forgotten, though for some reason the contract part stuck a little better than the rest.

The estimable Professor Flint? Me too. I always wondered what happened to his son, young Douglas, who preceded me through the hallowed halls of Kelvingrove.

DM

I was at Aberdeen on the conversion course (CAS) for graduates with non accountancy first degrees who wanted to proceed into ICAS.