Why do we have contracts?

Taken from 'Sign Here: The enterprise guide to closing contracts quickly' by Alex Hamilton.

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Why do we have contracts?

Contracts don't look very attractive on your shelf, they don't taste nice, and they won't give you shelter - so what value do they add? The answer is that businesses need to work with others through commercial relationships. And the purpose of the contract is to help get those relationships going.

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In other words, the objective of the contracting process is not to create contracts; it's to create and grow relationships. Contracts help us along the way by building confidence. They do this by giving the parties certainty about what the mutual promises are and that those promises will be kept (because there will, at least in theory, be some recourse if they aren't).

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But if we're trying to create relationships, why are we so darn'd difficult with each other in negotiations? Why do we keep trying to start abusive relationships? And why are we so focused on what could go wrong rather than on how to make things go right?

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We've looked at the answers to those questions in our article "On being reasonable". If you're struggling to connect your contracting process with the real value in client relationships, we'd love to have a chat about why our 'short, clear, reasonable and relevant' approach can make a difference to your business.