If I could count the amount of times that I’ve dealt with someone that has gotten caught signing something that they didn’t agree to/didn’t understand, well….I’d have a big number (It’s happened to all of us, so don’t be embarrassed). Then, when that person realizes that they get less/own less/have to wait longer or they have to pay more/do more/move faster the line you hear most often is, “Well, in the spirit of the original agreement…” Look, just because you negotiated something verbally doesn’t mean that’s what the contract will say. And likewise it may mean that there is no reason (other than maybe to maintain the relationship) for the party who you’re expecting to live up to ‘the spirit of the original agreement’ to actually live up to the spirit of the original agreement.
Disclaimer: I am not a lawyer! So obviously don’t take my blog post as the gospel on legal advise. Please seek qualified legal counsel on all legal matters.
Read the contract!
Far too often, we (and all of us do this) get either complacent or lazy and we don’t do what we know that we should do. Well, if you were going to pick an area to not get complacent or lazy on, then this is it. As procurement and sales professionals we’re often so eager to get the negotiation done that we lose track of writing down the details of the deal in the agreement. What ultimately ends up happening (9 times out of 10 in my experience) is that someone leaves and a whole new person, who has a different interpretation of the agreement, comes in and says, “We didn’t agree to that!” And then what ensues is a stack of wasted time and back and forth discussions about what’s in scope, what gets paid for, what’s included in the price, etc.
All of this wasted time and energy (and sometimes mediation/arbitration) could be solved if we all just read the contract and asked what we think may be stupid questions but are not. The devil is in the details, as they say. And unless we come to terms with having to do the required digging, we’ll always end up stuck.
“Ok Mark, I get it, but that doesn’t help me now with the contract that I have to deal with.”
Ok, fair point.
So what should you do if you run into a situation where you need to explain something that was ‘in the spirit of the original agreement’? Well much of this comes down to relationships in my mind and in my experience it’s going to be easier and cheaper in the long run to have it solved as a business-to-business discussion than a legal-to-legal discussion (no offence to the lawyers that read this).
Hear me. I’m not saying you shouldn’t be seeking legal counsel and getting their advice. By all means, get that input and seriously consider their advice (it’s what you pay them for). But, in my experience, most of the time it comes down to the strength of the relationship and the future opportunity for both businesses. Hopefully you have provisions in the agreement for process around dispute resolution and hopefully the business relationship is strong enough that you can come to a fair agreement between the two parties. But if you can’t then the both sides of table are likely to dig in their heels a bit and protect their positions.
At this point, it’s important to reflect on the situation. Don’t get so caught up in the moment that you don’t stop to think about it. And the first question you should be asking yourself is:
“Is this dispute even worth it?”
What is the total cost of going down this route? And this reflection is so important because it helps frame your decisions moving forward. What I’ve found is that most of the time, is that running a dispute to the end is not worth ruining a relationship or incurring the legal fees.
I’ve gotten a bit off track here from the original intended post and I could write a stack more on stalemate and deadlock negotiation strategies (I’ll save that for another time), but the point is, READ (AND SEEK TO UNDERSTAND) THE CONTRACT.