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Written Agreements Create Winning Relationships

Mature relationships between individuals or groups can seem challenging to newcomers entering the scene. Familiarity with the context of conversations, anticipated behaviors and historical lore of the group plays a huge role in the communications style of the members. The more experience the group has together, the more the members can presume in conversations and the less needs to be said. How little can be said on a topic that communicates volumes of intent and logic is truly fascinating. Complicating matters further, gestures and body language are added into the conversations and will convey as much meaning as a spoken word.

Around the holiday dinner table with close family, or in any cohesive unit that has trained and worked together over as long period of time this works well. A business with a well-established and consistent organization culture experiences extremely high efficiency in communication that is achieved from a common understanding between the members. To an outsider, the learning curve might be steep, as everyone appears to speak in some sort of code or react meaningfully to unspoken words, yet they comprehend each other very well.

When we take that familiar understanding outside of the family, group or business unit, things can start to go awry quickly. The presumptions made by either party to a business agreement can lead to confusion, missed expectations and in the worst case may even lead to disputes resulting in expensive legal action. In the absence of clear, open and complete communication documenting all agreements and expectations between the parties, we are left with presumptions to clarify our understanding.

No agreement can fully encompass all of the assumptions that can be made on both sides of a business deal, but diligence and time dedicated to capturing the intentions, desired outcomes and obligations of the parties during the initial phases of discovery and before establishing an agreement will go a long way to developing a greater understanding and building trust. The parties must, essentially, learn from each other not only the terms of the deal but also the potentially unspoken presumptions made by each side.

Many legal agreements include rich language covering issues such as liability, assumption of risk, indemnification and assignment of rights. This language is designed to protect the parties from all of the presumptions they might make and that often have little to do with the actual subject matter of the agreement. Unfortunately, it is often the presumptions made on the precise terms of the agreement that give rise to the need for these clauses.

If you are contemplating a contractual business relationship with another organization or independent party, don’t let the honeymoon cloud your judgment by rushing into an agreement that feel right. If the agreement benefits both parties, then you will have much to agree on and the conversations will be easy. Conduct a thorough discovery process up front to clarify precisely the purpose of the agreement, desired outcomes, roles and responsibilities, communication methods and schedules, deliverables and milestones, compensation and timing and confidentiality and ownership of work products.

Write these agreements on paper and agree on them in the form of a letter of understanding between the parties. Get to know as much about your new business associate as you can and keep the communication channels open. The contrary suppositions will emerge; don’t let them derail your relationships by failing to initially develop a strong relationship and understanding.

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