Duty to Client in Business Deals Murky, Attorneys Say
A New Jersey appeals court's September 2014 holding that lawyers must thoroughly counsel even sophisticated clients on deal-making will remain the law going forward since the state Supreme Court declined last month to hear the case—and transactional attorneys say they've taken heed.
January 12, 2015 at 11:15 AM
8 minute read
A New Jersey appeals court's September 2014 holding that lawyers must thoroughly counsel even sophisticated clients on deal-making will remain the law going forward since the state Supreme Court declined last month to hear the case—and transactional attorneys say they've taken heed.
The case is Cottone v. Fox Rothschild, in which the Appellate Division found a duty, as a matter of law, to explain contract terms, even if they're unambiguous and the client personally negotiated them. In the process, the court reinstated a legal malpractice suit against Fox Rothschild, which is now on remand.
“It is a concern for transactional attorneys,” said Philip Forlenza, a partner in the corporate and business practice at Giordano, Halleran & Ciesla in Red Bank, N.J., and chair of the New Jersey State Bar Association's business law section. “Are they now required to explain even the most fundamental aspect of it?
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