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Agreements…If They Are Worth Having They Are Worth Documenting

By VHMA Admin posted 04-22-2017 09:41

  

Agreements – they are a part of our everyday life. Whether casual or formal, business or personal, implied or expressed, there is just simply no avoiding them. As we all know, in practice operations there is a constant churn of agreements being executed, fulfilled, and sometimes broken. Often when terms within an agreement are compromised or outright broken, so too can the relationships they once served to benefit. To uphold relationships and outcomes, consider the level of detail and delineation of terms used in building the framework of agreements that you enter.

Things just don’t always work out. It happens. Accepting this reality places most of us ahead of the disappointment curve. While we can’t predict the future, within any agreement, we can set clear expectations ahead of time on what should happen; as well as what to do when it doesn’t happen; and even address the unforeseen which may happen. So why do we, in our business and personal lives, consider skipping the documentation and move forward without it? The reasons vary by party and circumstance; the consideration at risk, profile of agreement, the relationship between parties, reluctance to insult the other party, and so on. Some of the aforementioned rationalizations may have merit in the moment, but when evaluated on a long enough time line, something will go wrong or need to be placed back on track. Maybe neither party has been “burned” or has lost a relationship to a broken agreement, but it does happen. And, the likelihood is much greater without clearly delineated terms in place to guide away from a potential fallout. Simply put – if it’s worth having terms, it’s worth clearly putting them in writing and assuring that all parties clearly understand the terms.

Imagine having an agreement with a close, longtime colleague or friend. Maybe this agreement is employment related, investment related, etc. Now due to the depth of the relationship, there is no specific documentation in place (the parties feel comfortable “talking it through”), just the trust and history between you both to stand upon. If the agreement is tested without documented terms and conditions to support an unforeseen situation, despite you or your counterpart’s best intentions, the agreement and the associated relationship could fall into a tail-spin. Albeit depending on the consideration, some people might care less about the bones of a failed agreement, as ultimately losing a valued friend/colleague would be a greater loss. All things considered, its far more prudent to have delineated terms within an agreement; as those terms could guide your resolution and valued relationships out of deep water and towards positive resolution.

So, using hindsight and based on the outcome, how many times do you think you would “go back” and put something in writing? I presume we all have a handful of regrets related to failed agreements, and potentially even more related to those faltered without clearly documented terms to support the outcomes and relationships between parties. Consider that outlining and developing mutually understood terms of an agreement is not only prudent to guiding outcomes if something goes awry, but it might assist in protecting a valued relationship in the process.

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