“Why are you asking for a contract?”
It is something I ask clients. I want to know what is it that is motivating them to do so. I want to know the real reason behind it. The effectiveness of a contract depends on its very purpose, which could affect the wording and phrasing.
You see, contracts aren’t just documents that you ask your lawyers to prepare, then sign, and then forget about it.
Contracts are meant to protect something you value.
Take these for example.
If you value your relationships, you protect it with a contract.
In life, someone close to you will likely ask something from you that could affect your relationship with that person.
Usually, it is a family member or a childhood friend asking for a loan or for you to invest in his business. Whatever that may be, you are setting up yourself and your relationships for an emotional roller coaster if you think documentation is not necessary in these cases. After all, there is no way they’d go back on their word with you, right?
Think again. Tell that to the numerous cases of family members or close friends whose relationships dissolved because of one side making denials. Worse, they have a very different recollection of their agreement. Unless you put it on paper, you cannot be certain that what you are thinking is the same as the other person.
Maybe it was an honest-to-goodness misunderstanding, or may be it wasn’t. Who knows. I have yet to encounter someone who can actually read other people’s minds. The only way I know to check whether we have the same understanding of things is to put it on paper, right bruh?
If you value your lifestyle, you protect it with a contract.
You’ve worked hard and it is finally paying off. You are comfortable. You have what you want and what you need. The future looks bright and you are happy where you are now.
To cap it off, you decide to get married. I mean, happiness isn’t complete until you find “the one” right? So here you are wanting to give everything of yourself to that person you want to spend the rest of your life with. Then someone asks you: “Are you sure your significant other is not in debt? I mean, once you say I-dos, what’s yours is mine include those debts.”
Face it, it’s a strange phenomena, couples madly in-love with each other cannot seem to ask each other about finances. No, seriously, they are willing to sacrifice a lot for the one they love even with some to the point of dying for the one they love, yet they cannot bring themselves to ask the other, “so how much debt are you in?”
If your love replies “Does it matter? Our love will keep us alive”, that’s a sure sign of what to expect from that person. Your table will have love for breakfast, lunch, and dinner. Your bills will be paid by love, including your Netflix subscription.
Lovers often lie to each other, a fact that even a Supreme Court justice wrote in a case. “Statistics never lie, but lovers often do.”
If you can’t get an honest-to-goodness and deep-down conversation with your partner on finances, a prenuptial agreement is highly recommended. If you intend to sink with your debts, do it yourself. Don’t drag your spouse or children to a life of poverty.
If you value your business, you protect it with a contract.
A business is not built overnight. It is a result of years of hardwork, and the occasional blood, sweat, and tears. So you can understand why seasoned entrepreneurs will not take your word as it is when making a deal.
For those who know how to manage their business, especially those who’ve had their share of bad experiences, hand-shake deals are just gestures. The true litmus test of a deal is whether everyone is willing to sign a written agreement. After all, aren’t we all simply documenting what we’ve agreed on?
Hence, it is strange to refuse to sign a contract when it reflects what someone has agreed on after discussions. If there are some clauses that they are not amenable, they could simply have it revised or deleted. Otherwise, the refusal is a big red flag waving at you reminding you of what you are about to lose if you proceed, that thing you’ve been working on all these years, your business.
You are actually buying a solution, a very personal one at that.
So you see, you’re not buying a contract. You’re buying a solution. Not just a run of the mill kind from some archive of templates, mind you. You’re looking for one that can specifically address your concerns and ensure that your objectives will be met. On this note, you have to communicate all these to your lawyer and make sure he is getting you right.
In the end, you are doing all these to protect something that you hold consider valuable.