In the heat of business, the importance of contracts can often get lost. We make side deals on handshakes and “our word,” and we can forget the benefits of having everything in writing.
Jeanette Nyden and Lawrence Kane have written a new book called The Contract Professional’s Playbook. I spoke with Jeanette and Lawrence on a recent episode of Negotiations Ninja about some ways in which contracts are crucial in maintaining relationships through the years and generations.
Contracts should be the holders of all relevant and binding information regarding any deal, relationship, or transaction. When a contract includes the minute details, it makes it easier to transfer to colleagues and new employees. Things like limitations of liability, insurance, and indemnification, are often dwelled upon and argued over in a negotiation, which could often be avoided if the initial contract held the correct information.
“What I need to do is make sure that the team I’m working with fully understands what the situation is and what the ramifications might be,” says Lawrence.
Contracts can also help take the personal out of the process. If it exists in the agreement, then it isn’t up to the individual.
When you have on the top of your mind, at all times, “What is right for the business?” as opposed to, “I have to win,” then there is nothing you can take personally. Take your ego out of the process and focus on the company. The contract exists to protect the company and take away the potential for egos to get in the way.
The primary purpose of Jeanette and Lawrence’s new book is to pass the procurement profession to the next generation with a set of guidelines to ensure the framework that has been built over the last couple of decades be maintained and built upon. An adequately produced contract will do that same thing.
“What the document does is then provide the guidelines for people who are new to the relationship a year or three or even five years after the agreement’s been executed,” says Jeanette.
Define and outline your business relationships into a contract so they can span years and generations.