Mar 18, 2018

Contracts are Relationships

By Evan Schneyer •

We tend to view contracts as documents rather than what they really are: representations of a common intention and understanding between people who want to work together.

In other words, relationships.

When you sign a contract, you aren’t just putting your name on a piece of paper full of big, confusing words; you are entering into a relationship defined by rights and responsibilities.

Commitment Issues

Of course, contractual relationships are different from other kinds of relationships because they are legally enforceable. Breaches of trust and accountability in the personal sphere are not like breaches of contract. When friends and loved ones disappoint us, we have no choice but to charge it to the game because there is nowhere else to send the bill. In business relationships, on the hand, we count on the courts to get in the middle and play referee.

This explains why contracts are so wordy and confusing. While the terms of most relationships are implied and can change organically over time, legal agreements strive for just the opposite. We want our deals to be well-defined precisely because they are enforceable, and misunderstandings can lead not just to embarrassment and hurt feelings but to protracted court battles and significant expense. Considering the unpredictability of interactions between people, it’s easy to see the appeal of explicitly stating all of the terms of a relationship up-front (maybe that’s why romantic relationship contracts became a thing for a minute). Reading “the fine print” may be a pain, but ultimately legal jargon is there to help new business relationships succeed by thinking through situations that could threaten them in the future.

Trust is Earned

Of course, the super-specificity of legal language is a double edged sword. It’s there for our protection, but if we’re not careful it can cut us, too. This is why we should be wary of those who seem eager to use legalese as a weapon. Many of us have encountered people who bank on the fact that their customers, clients or business partners don’t understand legal jargon in order to achieve some kind of advantage during the negotiation process. While it’s true that people getting into business together aren’t required to help each other understand what they are signing, people who don’t want us to fully understand our agreement should raise our bad business relationship red flags.

Honestly, why would you want to legally bind yourself to someone who is threatened by the idea that you may actually understand what you’re signing? People routinely brush off that kind of sleaziness by saying “Oh, well, that’s just business”—but if we stop thinking about contracts solely as documents and start thinking of them as meaningful associations between people, it’s clear we need to raise expectations for the deal-making process.

We should be as good at picking up on the warning signs of a bad business relationship as we are for bad personal relationships. Think about it. The things that feel good in personal relationships are pretty much the same as in business and professional life: mutual respect and good communication, at a minimum, and ideally a sense that each side truly values the other.

Ain’t Nothing Like the Real Thing, Baby

No matter how much ink lawyers spill trying to get every clause just right, no one can boil down all of the complexity of an association between real people in the real, messy world, into one airtight document. If they could, partnerships would always go smoothly and no one would ever end up in court. In other words, contracts really would just be pieces of paper.

Obviously, this is far from the case. Once a partnership turns sour, it may be too late for words on a page to be of any help. It’s at this point that a contract is revealed to be what it always was: a stand-in for a relationship between people—one that can go great, but also one that can fail. Broken relationships lead to broken deals, so make sure yours are built to last.

Written by Evan Schneyer
Co-Founder & CEO of Outlaw

More about Outlaw

Voted G2’s #1 Momentum Leader for contract management, Outlaw provides pioneering end-to-end contracting solutions for the fastest growing companies such as Intrado, BeyondPricing, and Democracy International. From dynamic template-based generation through in-app negotiation, lifecycle management and reporting, Outlaw automates and customizes contract workflows helping companies reach agreement faster. Outlaw has been recognized as a legal technology leader in 2020 by the National Law Journal.

In 2021, Outlaw joined Filevine’s legal tech platform to radically improve the future of legal work. Together, Filevine and Outlaw become the first and only end-to-end solution to dynamically link documents, contracts, and databases with their surrounding business processes, resulting in easier workflow customizations, instant automations, and better collaboration.

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