Contracts – are they worth the paper they’re written on?

We’re encouraged to have contracts to protect every aspect of business life – but what are they really worth? In my experience, people will breach them if they are so inclined and, unless you have the appetite and money to take the offender to task, there is very little value to the contract. But let’s look at this more positively. A contract is the detailed, written form of an agreement between two parties and that is all it can ever be. There is however a much stronger and more effective contract that is never written down. It is the contract of trust.

Trust between two parties is the most valuable contract you can ever have. If employees trust their employers they will not be tempted to breach their employment contracts. If employers trust their staff they will have no concern about how and what they communicate outside the business. Trust is a two way contract and it must be earned.

Yesterday I visited a company I first had as a client in 1989, the year they started and the year we started too. They have not given us any work for a while – some years in fact as they manufacture for the construction sector. I was invited to visit by a new marketing manager who was told by his MD that Alpha was the company to call on if he wanted something out of the ordinary. That we would be able to offer a results driven solution rather than just take a brief. Whilst in the meeting I talked about my relationship with the current MD and his father, who now chairs the company. I told the new contact how straightforward and trustworthy I had found them and he agreed – he had talked with the Chairman only the previous day about being able to sleep easily at night because your company “does things properly.” Trust and integrity shines out from that company – from their relationships through to their very excellent, market-leading products. I have many other such examples on our client list and they all tend to be successful. This is no coincidence.

Use legal contracts of course. They provide a record of terms and can be useful on occasion. We were very grateful to a specialist law firm a couple of years ago when they fought a case for us which, without a contract, would have left us vulnerable. But even in that case, it was a breach of honour and trust that let the other party down. The contract was just there to provide the muscle and tools for the lawyer.

When advising clients who are new to business I tell them that “like is attracted by like” – if they are looking for long term business rather than transactional business they will find it by trusting and being trustworthy.

If we can help you with any aspect of growing your business, call Amy or me on 01743 236631 or email

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