Contracts Aren't Legal

One of the problems with contracts is that people think that contracts are primarily legal documents. That is a mistake. Contracts are primarily a means by which the two parties write down and record what they have agreed.

That function (clarifying and confirming what has been agreed) is senior to the legal function (what happens if one party doesn’t do what they agreed to do).

Setting out what’s been agreed in written form has two particular advantages which have nothing to do with the legal side.

  1. It protects against fading memories (and what in business terms, is often the same thing – the relevant people leaving the company).
  1. It forces clarity – there’s nothing like writing something down to bring out vagueness and ambiguity.

It protects against fading memories (and what in business terms, is often the same thing – the relevant people leaving the company).