We learnt a few business lessons the hard way from one or two peculiar clients, lessons learnt are worth sharing…
“Mr. I don’t sign contracts” is that “legal responsibility evading” client, who never wants to sign a contract, MOU, minutes of a meeting or any form of legal documentation for a $200,000.00 deal.
“Mr. I don’t sign contracts” would typically assert that his word is his bond and that he values his integrity more than contracts. Ironically, he has come to your office to brief you to draft a “water tight” agreement for his “colourful” business partners.
“Mr. I don’t sign contracts” usually replies business communication with a WhatsApp call (for a gsm call, you can get a court order to compel the service providers to provide the voice+ text log of a particular time frame).
In some instances, you can send “Mr. I don’t sign contracts” a joint venture agreement via email, only for “Mr. I don’t sign contracts” to send you the “text” of his own version of the joint venture agreement via a WhatsApp chat. (You now have to copy out the text of his WhatsApp chat into a word document before you forward to your lawyer for his kind review!)
For a contract to be valid there must be an offer, acceptance, legal consideration and an intention to into legal relations.
“Mr. I don’t sign contracts”, is quick to stretch your “scope of work” like a rubber band to accommodate his every whim and caprice. You will hear statements like, “that was not my understanding”, “that is not what we discussed”, “But you agreed” or “you must have forgotten”.
To stretch our analogy further, at this point you have executed over 80% of the project scope when “Mr. I don’t sign contracts” threatens to withhold further funding if you do not accommodate his next “never ending addition” to the “scope of work” Scope creep right? Wrong! You only have “scope creep”, when you initially had a “scope of work”.
Be wary of people and organizations who say “I don’t sign contracts“. Oral agreements are valid but difficult to enforce, and the lack of a “written contract”, can trigger off a legal dispute! There is a good reason, the law requires some contracts to be in writing in order for such contracts to be enforceable.
Benefits of a written contract:
1. Parties don’t have a dispute as regards the content of their contract, as it is in writing.
2. Parties know clearly what their “scope of work” is.
3. Parties know clearly what their “payment terms” are.
4. Parties know what the “duration of the agreement” is.
Way forward, brief your lawyers to help you carry out proper transaction documentation, reduce your oral agreements into written contracts! ???
In case you missed this: Madam “I am helping you” 14 types of clients you meet in the market place