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Legals Side: Exploring Contracts etc.

The bottom line is that it’s important to make sure whenever possible to enter a written contract that is clear and complete. But, you'll be surprised to hear, it's not always the end of the world when a contract isn't in place, in certain circumstances.

Eric Greenberg, contributor
Eric Greenberg, contributor

Today, I will try to convince you that complete, clear, written contracts are a good idea, even though there’s more to contractual relationships than the contracts themselves. To illustrate that latter concept, I have a story.

Back in law school, a professor of mine held a contest to judge which student had the “worst” apartment lease. He meant “worst” from the student tenant’s point of view, so he looked for the most restrictive rules, fewest expenses covered by the landlord, prohibitions against pets, toughest conditions for getting your security deposit back, stuff like that.

At the next class, the “winner” with the absolute worst lease was announced, and, unexpectedly, the professor asked the winner how they liked their landlord though the lease was so unfair to the tenant.

“I love my landlord,” I replied. (I like to brag about any contest I win, even this one.) I explained to the professor, “The lease prohibits pets but I don’t want any so I don’t care, the landlord lives right nearby and comes over immediately when anything needs fixing, they are flexible about making small changes in our agreement, and is just a generally nice person.”

And that, the professor assured us, was the lesson. The written agreement is important, but so is the relationship between the parties.

Of course, many experienced packagers know this because they have a lot of contracts with suppliers, customers, contract manufacturers, and service providers, and they have learned that negotiation rather than litigation is usually the better part of valor. Also, they know that most contracts contain provisions that simply never come into play at all.

So, am I saying it’s not necessary to have clear, complete, written contracts when you do business? No I am not, absolutely no. A clear and complete written agreement is best.

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