As a client of mine, you should be using simple effective contracts or terms. But do my contracts live up to their promises? I need your views on whether you now have trust-enhancing, loveable contracts.
Trust, according to the Speed of Trust by Stephen MR Covey, is a function of two things: character and competence. Character includes your integrity, your motive, your intent with people. Competence includes your capabilities, your skills, your results, your track record.
When I read that book, I was struck by how much of it applied to contracts. Covey cites evidence that mistrust is a direct business cost because of its impact on their relationships with clients or suppliers. His trust audit scores key behaviours such as: talking straight, demonstrating respect, creating transparency, clarifying expectations, keeping commitments, and extending trust. In my view, you could only get full marks if you company is using simple contracts!
As it says in Chapter 4 of my book on Small Works, the aim of your contract should be to record your agreement, safeguard your business and avoid disputes… all without annoying your client. A simple contract is easier to read and highlights where the document is inaccurate, incomplete, or ambiguous.
In my 2014 Survey into Construction Contracts, a surprising 30% said they loved their contracts because they help them do business. Recently, I created a quiz (available until 15 August) to help businesses to understand if their contracts were loveable. But no-one wants to find out how unloveable their contracts are. Perhaps they are with the 10% in that survey who thought them a necessary evil!
A loveable contract needs to start with a positive process, include terms which enhance trust, and then must perform in practice. To reduce friction, its payments terms must be understood by everyone who uses them. To respond to current conditions, it needs a flexible change process. Your contracts should safeguard your business without annoying your clients/suppliers. Do they? Tell me here.
I’d love to know your experiences so please complete my 1-minute survey (6 Yes/No questions).