Contracts, Kitchens and Communication

What do drafting a contract and buying a fitted kitchen have in common? More than you might imagine!

When you buy a fitted kitchen this is the process you usually go through:

1. The designer sketches out a plan of the space you have;
2. You determine the overall ‘look’ you want, the important elements, and where you want those to be placed in the finished design;
3. Some standard sized cupboards, drawers etc are fitted around the ‘must-have’ items – to the extent they fit in with the desired scheme;
4. Bespoke units are then designed to fill in the gaps – to exactly match the other units in style, but built in non-standard shapes or sizes
5. The whole plan is reviewed and adjusted as necessary – to achieve both the functionality and the overall ‘look’ you want. (Sometimes, this even means going back to point 2.)
6. When the kitchen is complete, you add the finishing touches – the pictures, flowers etc.

What you do not do, is buy a kitchen – a set number of certain sized units and appliances, - throw out the ones you don’t want, and then try to make the rest fit by chopping lumps off of some of them and joining others together with units you picked up at a car-boot sale and bits of plywood out of your garage!

But what if you did take that tack? What would be the result?

Well, you would find some areas of the kitchen would be quite unstable – a bit ‘rickety’ as my grandmother would have said – giving the impression that they might let you down when you really needed them. In contrast, other units would no doubt be as solid as a rock – but it’s a fair bet that they would be the ones you most wished you’d left out or changed in some way. Then, of course, there are the bits of plywood – I wonder what your visitors would think about those?

So what’s all this got to do with contracts?

Whilst no-one actually adopts the second approach to kitchens, many people do when it comes to contracts or terms and conditions: They obtain a template or ‘standard’ document (bought or ‘borrowed’,) and try to adapt it. However, red-lining the bits you think you might not need (or don’t understand), shoe-horning in a few bits from other people’s documents here and there, and drafting the odd clause yourself, is never going to result in an effective and reliable document.

No two businesses are exactly alike. So, cutting and pasting other documents to create your own involves significant risks. In particular, there is a great danger that those clauses you most need to be able to rely on will be inadequate when applied to your particular situation. Even worse, the ‘rock-solid’ ones could easily turn out to be just those you should have changed, because they actually work against you. Also, the plywood - the bits you drafted yourself – generally stand out like a sore thumb and make the whole document (and you) look unprofessional.

That doesn’t mean, however, that the only alternative is some form of ‘bullet-proof’ document prepared at great expense. Aside from anything else, ‘bullet proof’ is an expensive feature which is only useful when you likely to be shot at!

The simple truth, is that not every word of a document will be unique to you. However, producing it from a blank sheet of paper, and building it up using a similar process to designing a fitted kitchen, is by far the surest way of achieving what you want.

Begin each contract by deciding what you want to achieve and determining the ‘must have’ items and where they need to go in the document. The next step is to insert the standard clauses – but on their merits, rather than by just throwing the whole lot in en masse. The penultimate phase of the document building process is then the most important – and this is the creation of the bespoke items needed to fill in the gaps and tailor the document to your own business needs – the aspect which template documents don’t adequately address.

This ‘bespoking’ process involves considering those situations which could result in misunderstandings, or which might otherwise result in you making less profit on your arrangement than planned – and addressing them. Some of these issues will be similar to the situations faced by other people, but rarely do they involve the same ‘mix’, and so every situation should be considered on its merits. It is occasionally even the case that, whilst considering these possibilities, it becomes apparent that there is a better, safer way to structure the arrangement as a whole – and in those cases, as with the kitchen, this might involve some re-arranging and re-writing of the terms in order to achieve the commercial goal.

Finally, there is what I think of as the ‘finishing touches’.

In the same way that a kitchen communicates something about you, your values and your lifestyle, many businesses work hard at creating a corporate style but then forget all about it when it comes to their contracts. The effect is that ‘approachable’ can suddenly become ‘stroppy’ and ‘professional’ can become ‘sloppy’. Using wording which is sufficiently precise to protect you, but still uses language which reflects your house style, however, will reinforces your branding .

So, the next time you need a contract – think kitchens. A well-built kitchen will last you a long time and help make your home a relaxing place to be. Well drafted contracts do the same for your businesses.

As a former in-house lawyer and member of the senior management team in a multi-national pharmaceutical company, Margaret understands that the role of contracts and contracts advisers is to facilitate business - not hinder it.

With the above in mind, Margaret aims to brings the benefits of an in-house contracts team to SMEs - the ability to create concise, pragmatic documents, written in plain English, within reasonable (and sometimes unreasonable!) timescales. Margaret focuses on the detail that matters. Accordingly, her contracts are designed to prevent costly misunderstandings and scope-creep - and hence increase the profitability of your organisation.

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