Karma in contracts

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The Ford/Navistar thread in particular got me thinking about contracts in general (and maybe their application to the "real" world).

I've run some reasonably big contracts over the last 15 years, and have decided that in general, the further the contract document is away from the relationship (excepting particulars of works), and provided the relationship is built honestly from both parties, the better the result for all.

Yep, every so often, you have to pull out a commercial clause, but provided the relationship is sound, the project will proceed amicably, and to both parties benefits.

Seen too many people start playing tennis with clauses and definitions, then you get the absolute least that can be provided under the specification, and everyone walks out with a bad taste, vowing never again.

Got me thinking about relationships in contracting...and then on to Karma and Contracting...more precisely, the more negativity you pump into a process, the less likely you are to get a decent outcome.

I was fortunate (experientially) recently to see negotiations where the Principal was so set on an outcome, that the entire negotiation phase was focuses on the reparations if the project ultimately failed. The principal scraped out every possible failure, and put in a penalty for each.

Risk to the supplier grew with every remedy, so their guarantees grew less at every discussion...until finally they could guarantee next to nothing, the Principal felt slighted, and the negotiations dissolved.

Left me wondering if they could have invested equal effort into the positive aspects of the project, and pulled it off, or devoted themselves entirely to the positive aspects and resulted in a stellar performance.

Interesting process to observe...


led on to random wanderings about pre-nups etc. and the return on investment of positive or negative effort.
 
You should see the movie 24-hour Party People. Factory Records' contract was in (real) blood..."we owe the label nothing and they owe us nothing" or something like that.
 
Hahaha. Our head of environmental affairs wrote the contract for one of our lagoon closures. For those not familiar with it - a "closure" of an on site impoundment requires that you submit a plan to the DEP and stabilize the contents so it won't leak ..migrate ..whatever. A messy deal.

Anyway ..the contractor ran into a snag with an unprecedented amount of rain (it was a warm winter - 19" out of season) and wanted to pump the remaining liquid liquor to an active lagoon to speed up the process. Our head of environmental affairs ..who appeared to thrive on contractors screwing up ...said NO. So, for added months the contractor stabilized ..effectively ..rain water. Now, instead if xx number of tons of lime and fly ash ..it was 2X xx tons of lime and fly ash (they paid for it in time & material) ..but the basin that we were placing the stabilized material in was supposed to be a bowl (they were reconditioning the lagoon that they were stabilizing the liquor in) ..was now a mountain. Eventually ..when rain continued to occur...we ended up pumping the remaining liquor to the active lagoon anyway ..and now our heat exchangers got a nice dose of the agents calc'ing out in the evaporative process.

So ..6 months more to clean out the lagoon ...a shortened future for the plant..lots of operational problems ...and one contractor that lost $250k in profits that would never take on a project with our company.

I hope the thrill of victory was enough for him to justify the side effects.
 
Gary,
once had a highly respected "contract administrator" state that he'd done his job if the contractor goes broke in the process. Naturally, he got a lot of less than satisfactory outcomes...they all complied to the absolute letter of teh contract, but missed a little on the intent.
 
Quote:


Gary,
once had a highly respected "contract administrator" state that he'd done his job if the contractor goes broke in the process. Naturally, he got a lot of less than satisfactory outcomes...they all complied to the absolute letter of teh contract, but missed a little on the intent.




Ah ..snatching defeat from the jaws of victory!! "Ah-ha!! Now I have them EXACTLY where they want me!!"

I can see the post contract completion meeting now "Oh
blush.gif
You actually wanted them to do this, huh?? Sorry, my bad
frown.gif


Sometimes you wonder if a few too many Monty Python skits were used as templates for someone who thought they might work as normal behavior.
 
Shannow - One of my goals in life is to make philosophical/religious tenets more understandable as they relate to everyday situations. Your post does an excellent job of that.
 
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