The simplified diagram below illustrates
some of the elements which are necessary to achieve a binding contract.
The increasing trend towards email and
talking, instead of round the table negotiations, makes it much more likely
that contracts are formed without ceremony and without a clear hierarchy of
steps. Often there will not
be one single document capturing the deal or even no paperwork at all, with
everything sorted in discussion.
To reduce the chance of you waking to a fishy
green nightmare, here are 7 suggestions for things to be mindful of when you
are doing (or not planning on doing) a contract deal:
- Until you are sure that you do want to be in a business relationship with another business, make it clear that discussions are preliminary and for the purpose of deciding if both businesses want to work together.
- If you are not sure you want a particular deal, signal this by using phrases like “subject to contract” in written correspondence or in speech.
- Do not assume that “subject to contract” will guarantee to mean just that if the behaviour of everyone demonstrates something else.
- Do not perform the contract in any way, until the deal is done. Being helpful by just providing… etc. could leave you committed before you have decided.
- Do not believe that there is no deal because there is nothing in writing.
- If offers and counter-offers are flying around in emails, on the phone or in meetings it is worth taking the time to repeat or refer to the whole offered deal package in writing, in case acceptance happens with a lack of certainty as to what the deal is.
- Do not rely on a belief that the law will save you because of past legal decisions and well-known principles. Life changes fast, so does the law.
To finish up, here are my two favourite
fishing quotes:
“There’s a fine line between fishing and
just standing on the shore like an idiot.” - Steven Wright
“My biggest worry
is that my wife (when I’m dead) will sell my fishing gear for what I said I
paid for it.” - Koos Brandt
Your choice; contract like an idiot or get
the price you deserve!
By Jennie Vickers
Jennie Vickers has 20+ years as a lawyer and general manager thinking in a truly innovative and creative way, delivering great results. She is a passionate advocate for the need for advisors to be attuned with their clients using Thought Leadership, particularly in professionals services firms. An advanced instructor of Buzan Learning Techniques including Mind Mapping, Jennie is skilled in applying these tools to deliver value and creative efficiency in a wide range of disparate organisations.