I admit I probably shouldn’t be posting this because I’m not an attorney, so I don’t give legal advice. This is just anecdotal, based on what I’ve seen in my business experience. Consult your attorney. I worked for years with a smart, honest business lawyer who — well, let me get to that later in this post.
First, however, here’s what I’ve seen in several decades of running a business.
- Your should always get the specifics of a deal down in writing. They should be discussed, negotiated, agreed, and and signed. But that doesn’t often mean “a contract” negotiated with and by lawyers. A simple letter, and in many cases an email, is sufficient.
- The real purpose is getting an agreement defined well. Contracts are for special cases. In my opinion.
- I’ve never seen a contract end up with some judge or legal authority reading its details and deciding what gets done.
- I’ve spent excruciating hours, several times, working through the details in a contract full of formulas and hypothetical situations, none of which made any difference when the business relationships fell apart.
- In every one of those cases, we ended up in mediation. It all came down to negotiation at the end. The detailed contracts were just framing.
- I’ve several times failed to get a contract enforced when a big company was on the other side. “We don’t agree with your interpretation,” I was told in once instance. The unspoken challenge was “so sue us.”
- The real value of the vast majority of contracts is only the same as in a simple non-legalese written agreement in email or as a letter. It gets both sides clear on what they’ve agreed, and serves as a reminder later. And for that, you can get as much utility in a well-written non-legalese short letter as you do in an excruciatingly detailed contract. Do get it in writing. Do agree and sign. But call that a letter, not a contract.
- I’m not knocking contracts where they’re needed: employee-employer relationships, confidentiality, non-disclosure, consultant, programmer, author and publisher … these are usually boilerplate. They aren’t worked to death for each case.
This is just my opinion, and I’m a business owner, not a lawyer. Regarding the smart business lawyer I mentioned, he warned me more than once that spreadsheet and-of-contract formulas would be hard to enforce and would probably be moot anyhow, since disputes would most likely end up in mediation.
(Image: Mircea RUBA/Shutterstock)
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