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Contracts, Intent, Integrity, And The Road To Hell

ContractsContracts, by their very nature, put people on opposite sides of the table. Friendships and long established relationships of all kinds have been destroyed by bitter contract disputes. But this also happens when there is no contract where there should have been one.

The intent of the person or company you’re doing business with is just as important as the paper sitting on the table between you. Someone who wants to do shady business and take advantage of you will try to do so whether there is a contract or not. In fact, they might use the contract to back you into a corner.

The road to hell is paved with good intentions.
~ Samuel Johnson

Sometimes people start out with good intentions and then they lose themselves along the way. So, even better than good intention is integrity. At the end of the day, good people do good business. That’s what they intend to do from the beginning. It’s what they do in the end. And they’re always the best people to do business with.

A Little Story About Agreeing To Disagree

A supplier I have done a lot of business with decided to buy a machine I was selling for one of his other clients. We had a verbal agreement that the machine was to be paid for in full before it left my door. I had no problem with this because we had an ongoing business relationship, and a very good one.

His client took forever to make the final purchase and I missed several other opportunities to sell this machine. He assured me that his guy was going to buy it and so I waited. And waited. He even sent me a purchase order which I accepted. And then I waited some more.

A few months later his client was ready to take the machine. He said he was going to send over a check for 10% of the price and pick it up. I told him no — we agreed on full payment up front (because it was used equipment, I was selling it as-is, and I didn’t know anything about his client).

Then he tried to pull a snafu on me.

The purchase order (which I trusted was in order and hadn’t really looked at) stated that he would indeed pay 10% and follow up with the rest 30 days later. He was adamant that this was the agreement. I was a little ticked off at his disregard for our verbal agreement. I felt like he was backing me into a corner.

Luckily, there’s usually something you can find wrong with most contracts or agreements.

He had not put a delivery date on the purchase order, probably knowing full well that this deal could have taken a fair amount of time to complete.

I called him back. It was November and his client really needed to get this machine quickly by this point. I said “There’s no date on the PO, so if you don’t want to give me full payment up front, I’ll release it to you … in March.”

The next day he came by with a check for the full amount.

This was a little hiccup in our business relationship. I’m glad it didn’t sour it completely because we’ve done a lot of good business together since.

Clarity Is What Makes Intent and Integrity Happen

I’m not sure why he tried to get away with not paying the full amount up front. Maybe he forgot what we had discussed. Maybe his cash flow was a little weak at the time.

Regardless, whenever there’s a dispute with a contract or agreement, written or verbal, it’s usually because one or both parties are not clear on what they are agreeing to do. Verbal sticking points are easily forgotten. Written clauses that are unclear become ambiguous or prone to multiple interpretations.

Everybody involved needs to have absolute clarity about what is being agreed to. Clarity makes it easy to preserve both intent and integrity. Clarity makes it easy to work together to make a deal go smoothly from start to finish.

Denouement
 

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2 Comments

  1. [...] Business deals take a long time to put together when there is a wide gap between what each party wants and what they’re willing to give. There’s an inherent opposition and a lack of clarity in the deal. [...]

  2. [...] contract is no substitute for doing business with good people, but contracts are a way of life in business. Even if you have a lawyer or a whole legal team, take [...]


 

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