Contracts for Success: Seek Win-Win

One of the issues I have grappled with is whether a contract can result in project success. Can your terms encourage the project team to meet its objectives (the carrot approach) or do they merely provide remedies in the event that those objectives are not met (the stick approach)?

If your contract is intended to change your or your contract partner’s behaviour, or to reinforce existing good behaviour, then it needs to set this out clearly. A good example of this sort of approach is found in the Weagree Model Joint Development Agreement.

Win-Win

The Guiding Principles to their model Agreement include:

Each Party shall benefit from the Project, both in the short term and in the longer term future.

This is ground-breaking because the recognition that a contract should benefit both sides, for immediate profit and a continuing relationship, is rarely expressed.

Often users, lawyers and commentators are deeply cynical about the role of contracts in achieving success.

David Mosey, author of PPC2000 (a collaborative working contract) says

The creation and negotiation of many building contacts is based on the premise that the other party is the opposition and cannot be trusted, and that consequently there is little or no room for allowing flexibility or achieving harmonised interest.

What should you do?

As your contract is a tool to help you do business, then you need to make sure its terms benefit both partners. You need to aim for win-win!

Refs: WeAgree is a company producing contract automation services and model agreements, largely for use on the European Continent. It aims to “change an industry”.  As time goes on, it produces model agreements free to access. The Development Agreement is available to download from their website. Quote from p43 Mosey (2009) Early contractor involvement in building procurement: contracts, partnering and project management.

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