Common Sense Contracts

Common Sense ContractsIt used to be that business was conducted by a handshake and a written agreement to make sure both parties knew what the handshake was all about. Austin’s standard agreements for a range of applications run anywhere from 1-7 pages – not that they are used much anymore. 

Recent contracts for a variety of projects have agreements in the 100+ pages category to accomplish the same thing that was once done in 5 or 6 pages. What gives?

Now, some of this added verbiage is helpful as it covers topics that used to be addressed outside the old agreements, but there is also a lot of it that borders on the absurd. For example, a recent agreement that crossed my desk stated that the Architect retains ownership of the documents (a rarity these days), but cannot use “any documents, drawings or specifications that are substantially similar for any other project.”

Literally, this can mean that a door detail used on this project cannot be reused on another project. Does the writer of this clause really expect the Architect to use it for this project and then throw it away and reinvent all details, drawings and specifications? If so, the next project we do for them becomes much more expensive, because we have to redesign every detail, throw away the specs we wrote and rewrite them.

Common sense and a rational approach to business agreements seems to be dying a slow and painful death inflicted by those who sit around and invent new ways of trapping the contractor, architect or engineer. In response, we spend countless hours negotiating around the clauses and verbiage to protect each other from events that will not occur 98% of the time, because we have lost the trust that we would be able to resolve the issues at hand the other 2% of the time. 

In reality, there is a side of me that accepts the idea that these extensive agreements are a necessity these days and that we can work through them and develop successful business relationships in spite of it. But it is a sad state of affairs when being realistic is in direct conflict with using common sense.

“Nothing astonishes men so much as common sense and plain dealing.”

Ralph Waldo Emerson

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