Contracts that Work - So Sue Me!
By Tom Hall While music to a lawyers ears, at least to his wallet, this phrase should make every business person cringe. Litigation absorbs time and money, often astonishing amounts of both. Worse, it signals a major breach in what is presumably a valuable relationship. Worst of all, it means the business problem the contract was meant to address has not been solved. Instead of one problem and a plan to resolve it, you now have two, neither of which will add to your bottom line. Avoiding such a situation requires time, thought and some effort, but all are a worthwhile investment if they produce a transaction that moves forward smoothly and efficiently. Lets explore some of the common causes of deal failure: The vendor is dishonest. (Customers may also be dishonest, but that raises issues outside the scope of this essay.) In some ways, this situation is the easiest to deal with. The more blatant the vendors misconduct, the easier it is to pull the plug and look for an alternative vendor. Time and money will still be lost, but the customer who acts promptly will at least limit his or her losses. If the vendor is dishonest, but conceals it well, is incompetent yet earnest, customer may attempt to nurse the project along, allowing losses to mount. (Of course, a vendor who is honest but in over his head may eventually admit the fact and negotiate a buy out, thereby avoiding the need for either side to proclaim So Sue Me.) Happily, genuine vendor dishonesty is relatively rare. More frequently the parties have almost complete power to avoid contractual disputes simply by negotiating and documenting their agreements thoroughly. That requires time and effort, and it requires each side to leave their comfort zone and ask What will happen if things go wrong. That question is contrary to the mindset deemed necessary to do the deal. Negotiators are trained to be positive, to get to yes and NOT to rock the boat. But really making sure that the deal will work requires recognition that things can, and probably will, go wrong. Problems fall into two general categories: the unforeseen and the unforeseeable. A good contract goes to great lengths to eliminate the unforeseen, and provides mechanisms to deal with the unforeseeable. The unforeseen is simply a polite name for the overlooked. Overlooking a key condition or a vital contingency is not a career enhancing exercise. While there are no sure and certain guarantees against oversights, there are safeguards that can substantially reduce the exposure: Take your time. Easier said than done in a world in which everything is needed yesterday. But which is more damaging a delay to get the project right or damage control when the project comes apart? Consider what a commitment to first at all costs did for General Custer. Do your homework. o What needs to be done? o When? o By whom? o What contingencies must be addressed? o HOW will they be addressed (and by whom)? o Which project/product features are must haves? o Are there key personnel who need to be identified? o Are there target dates? o Which of the targets are guideposts and which are central to successful completion? o If there are no target dates, why not? After all, time is money. o What is the business problem you are attempting to solve? o What are your standards for success? If you are not solving a specific and defined business problem, or meeting a specific need, why are you spending time and money on the project? If you cannot identify what will constitute success, why are you spending time and money on the project? This brings us back to take your time. If the project is so rushed that its fundamental goals have not been defined, trouble may not be far off. Play Devils advocate. o WILL this project solve the specified business problem? o What CAN go wrong? o How will you respond when things do go wrong? It is tempting to cut corners at this time. Planning to respond to problems is hard work. But failing to put in the necessary effort will simply invite one side or the other to proclaim, at the worst possible time: So sue me! Even the most thorough and searching project plan cannot anticipate all problems. Key personnel may leave abruptly. A third partys product may not arrive on time, or may not work as promised. Management may cut the budget. Business changes may render the project unnecessary, or may require substantial revisions. Enter the change control provisions, which can serve a number of useful purposes: Eliminate time wasted on finger-pointing Eliminate (or at least reduce) the possibility of one side taking undue advantage of the other Keeping the deal alive. But did you include change control provisions in the contract? Did you specify: Who will respond when problems arise? Who is authorized to amend the agreement? A problem escalation procedure? A dispute resolution procedure? Cost controls? Specific buy-out or exit mechanisms? Hard work? Yes. Boring work? Sometimes. Valuable work? Would you rather manage a portfolio of projects that run more or less smoothly and contribute to the bottom line or would you rather spend your days putting out fires? Copyright 2006, Thomas J. Hall. All rights reserved tom@tomhalllaw.com Article Source: http://EzineArticles.com/?expert=Tom_Hall http://EzineArticles.com/?Contracts-that-Work—So-Sue-Me!&id=345748 overnight delivery of prescription drug valium vicodin valium oxycodone online canadian online pharmacy valium order valium overnight
