Quote of the Day: Contracts

 

“A contract has two main parts that should be spelled out: exactly what you are getting and exactly what you are giving for it. Those two elements are the purpose of the contract. There may be other parts of the contract to set jurisdiction and take care of other legal formalities, but those two parts should be absolutely clear. If they are not clear, if you do not understand these aspects of the contract, it is not yet time to sign.” — H. Sherman Rundles

Sherm Rundles has been one of my Mentors. He is from a generation before mine, just eight months younger than my mother. He “retired” twenty-some years ago from his corporate job and devoted himself to running the side businesses he and his wife had. When I talked to him about a month ago, he was happy to report that in his retirement and nearing eighty, he has finally gotten his workload almost down to sixty hours per week. I learned a lot from him, not only when we were working together, but later as I would visit him at his small business locations where he still holds court. Sherm is a no-nonsense guy. He thinks most things are simple, and the truth is that he’s right.

As I had my own businesses over the last twenty years, I found that his advice was sound, so much so that I am always amazed when I run into someone who doesn’t think that way. For instance, for a time, I was back with a major mega-corp as a consultant. The fellow who was the principal consultant that I was working with didn’t really know what he was talking about at least half the time. He loved using buzz-words, but couldn’t really define them. I was a little reluctant to get involved in yet another engagement with this guy, but then I saw the contract. It was a beautiful contract. It was a gorgeous contract. It spelled everything out perfectly. It said just what we would do and how we would do it. I went into my first meeting with the client with a spring in my step. We were going to do what was really needed, and we were going to do it right.

One of the first things the client said was, “We don’t really want to do that.”

“What? Then why did you sign that contract?” I asked in a severe state of stupefaction.

“Well, we know we want to do business with you, we just don’t want to do this.”

Now, the contract terms, length, and consulting resources gathered for the project had been based on the contract, but why should that bother them? We wound up serving them well, although we did not give them the answers they wanted and expected. We also out-and-out told them they were doing the wrong things for their continued viability. Still, they were happy to do business with us.

Have any tales of contracts and broken hearts to tell? This is the conversation in which to do it.

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  1. TBA Coolidge
    TBA
    @RobtGilsdorf

    Franco (View Comment):

    One contract I know of that wasn’t signed by some friends included a clause regarding polyamory. 

    At risk of thread-hijackery, I am intrigued that not-consorting with, or being, a woman of loose morals was once something we mitigated against with culture and criminal law, but in their absence we can still use contract law. 

    And that what before was a phrase for immoral behavior is now a word for a shiny-new lifestyle choice. 

     

    • #31
  2. TBA Coolidge
    TBA
    @RobtGilsdorf

    Arahant (View Comment):

    Franco (View Comment):
    I wonder if this is generally true in other fields.

    Other art fields, yes.

    I believe they see value in misbehavior until it starts costing them money. OTOH, that idea is so popular in cinema that it may well be utter nonsense, not to mention wish-fulfillment by coked-out screenwriters. 

    • #32
  3. dnewlander Coolidge
    dnewlander
    @dnewlander

    When you’re consulting or contracting, the most valuable things you bring to the relationship are the words “Why?” and “NO.”.

    If the client/partner can’t adequately answer the first, then they definitely deserve to hear the second.

    • #33
  4. Arahant Member
    Arahant
    @Arahant

    dnewlander (View Comment):

    When you’re consulting or contracting, the most valuable things you bring to the relationship are the words “Why?” and “NO.”.

    If the client/partner can’t adequately answer the first, then they definitely deserve to hear the second.

    I can give that an. “Amen!”

    • #34
  5. dnewlander Coolidge
    dnewlander
    @dnewlander

    Arahant (View Comment):

    dnewlander (View Comment):

    When you’re consulting or contracting, the most valuable things you bring to the relationship are the words “Why?” and “NO.”.

    If the client/partner can’t adequately answer the first, then they definitely deserve to hear the second.

    I can give that an. “Amen!”

    1999: “We want a real-time data warehouse.”

    Me: “Why? What decisions are you going to drive from it that can’t wait until the next day? If you can answer that, I’ll build it, but it’s going to cost $20 million.”

    “Daily batch will be fine.”

    • #35
  6. Randy Webster Member
    Randy Webster
    @RandyWebster

    Arahant (View Comment):
    Yeah, that is a slightly different situation. But as long as both sides know how to decode it, it still works out the same.

    One thing I learned in my years as a project manager (thank God they’re over) is that the two parties engaged in the negotiations could walk away being absolutely sure what was agreed on, but have totally different ideas of what that was.

    • #36
  7. Randy Webster Member
    Randy Webster
    @RandyWebster

    Arahant (View Comment):
    Mr. Customer, You vill have to conform to how ve do business.

    I’m bidding a job for which the construction manager has a pretty detailed scope of work.  One of the things they have included in our scope is installation of a couple of flagpoles.  We have absolutely no expertise in setting flagpoles.  So I’m going to exclude setting them from my bid.  If they don’t like it, they can refuse our bid.  As one of my old bosses used to say, “We control the pencil.”

    • #37
  8. Randy Webster Member
    Randy Webster
    @RandyWebster

    Franco (View Comment):
    One contract I know of that wasn’t signed by some friends included a clause regarding polyamory. I’m not kidding. Apparently a cast member ( female) created so many problems having relations with other cast members, the next year management felt it necessary to include this prohibition. Of course it’s ridiculous, how would they enforce this? However this person felt like it was a dealbreaker and wouldn’t sign. (Although she had a great act and got hired elsewhere with no problem)

    Ruby Tuesday used to include in the fine print of their contracts that the contractor building its restaurant would supply a six-pack of beer at some specified time during the performance of the contract.

    • #38
  9. Judge Mental Member
    Judge Mental
    @JudgeMental

    Randy Webster (View Comment):

    Franco (View Comment):
    One contract I know of that wasn’t signed by some friends included a clause regarding polyamory. I’m not kidding. Apparently a cast member ( female) created so many problems having relations with other cast members, the next year management felt it necessary to include this prohibition. Of course it’s ridiculous, how would they enforce this? However this person felt like it was a dealbreaker and wouldn’t sign. (Although she had a great act and got hired elsewhere with no problem)

    Ruby Tuesday used to include in the fine print of their contracts that the contractor building its restaurant would supply a six-pack of beer at some specified time during the performance of the contract.

    Ah, like Van Halen demanding green M&Ms as a ruse to force them to pay attention to details.

    • #39
  10. Boss Mongo Member
    Boss Mongo
    @BossMongo

    Judge Mental (View Comment):
    Ah, like Van Halen demanding green M&Ms as a ruse to force them to pay attention to details.

    Heh.

    • #40
  11. dnewlander Coolidge
    dnewlander
    @dnewlander

    Boss Mongo (View Comment):

    Judge Mental (View Comment):
    Ah, like Van Halen demanding green M&Ms as a ruse to force them to pay attention to details.

    Heh.

    But it was brown M&Ms.

    • #41
  12. Judge Mental Member
    Judge Mental
    @JudgeMental

    dnewlander (View Comment):

    Boss Mongo (View Comment):

    Judge Mental (View Comment):
    Ah, like Van Halen demanding green M&Ms as a ruse to force them to pay attention to details.

    Heh.

    But it was brown M&Ms.

     

    • #42
  13. Arahant Member
    Arahant
    @Arahant

    dnewlander (View Comment):
    But it was brown M&Ms.

    Obviously someone didn’t pay attention to the details.

    • #43
  14. Percival Thatcher
    Percival
    @Percival

    Arahant (View Comment):

    dnewlander (View Comment):
    But it was brown M&Ms.

    Obviously someone didn’t pay attention to the details.

    The bowl of M&Ms was at the beginning of the contract.

    The “no br0wn M&Ms” was down in the safety riders. If they found brown M&Ms, they would do a safety check on the electrical hookups, because they knew that no one working at the venue had read that far.

    • #44
  15. The Reticulator Member
    The Reticulator
    @TheReticulator

    This reminds me of when I would write up up bid specs for putting ethernet cabling in a building. I would specify Belden DataTwist cable (or one of the other Belden “Twist” cables) which contractors were known to dislike because it is extra work to separate the wire pairs before making connections. And I specified Hubbell jacks, plates, and panels, because I had parts on hand for doing my own repairs and changes later. During the walkthrough I would explain to the potential bidders that I meant what I had put in the specs, and that they should figure the extra work in their prices. They’d assure me that they understood.

    So naturally, after the bid was awarded I’d get a call from the guys actually doing the work, asking if they could substitute some other cable, which they thought was just as good. Or on one of my daily visits to the work site I’d catch them installing some other, cheaper panels than Hubbell. I had learned during the first such building installation that I should go on site to check the work at least daily. It made for fewer unpleasantries if they didn’t have to redo so much work in order to comply with my specs.

    And that reminds me of when I was writing up bid specs for my first fiber optic and copper wire installations, in the late 1990s. I had no previous experience in writing such things, but I found a lot of examples of bid specs for military installations and other government projects online. My projects were not nearly as complicated as those, but I was able to pick up a few points here and there that I deemed useful in writing up my own.  But as I found them, I thought to myself, “You know, this could be useful information for a bad guy. Just knowing the color code scheme in use at a military installation might come in handy for nefarious purposes. This isn’t really a good idea, putting these documents online.”

    So I printed them out, just in case I would want to refer to them again. And sure enough, after 9/11 such things were no longer to be found on the internet. 

    • #45
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