“It is impossible to unsign a contract, so do all your thinking before you sign.”
-Warren Buffet
The first rule I was taught in Construction Management was to read the contract. The first rule I learned in real estate development was if it’s not part of the contract, it’s not part of the deal. The first rule I learned in customer service was if the client has to pull out the contract, we’ve already lost them.
Contracts…those big, long, fine print PDFs that credit card companies, banks and social media companies get us to sign off in a rush just to keep things moving! But as big and complicated as contracts may be, they really are the critical partnering document to a project. They are the place we can lay out expectations and work through contentious issues. They are where two or more parties can get aligned.
I know, I know – it’s not the most exciting topic. Lawyers make fun of themselves, and each other, for “overcomplicating.” But the truth is, the contract is where risk is identified. After risk is identified, we only have a few options. Mitigate, manage or MOVE. Most of the time, moving the risk means shifting it from one party to another. Sometimes that’s through an insurance policy, or sometimes through a subcontract, but risk rarely runs uphill.
Why am I talking about contracts? Well, this week’s podcast was with Brian Perlberg, an attorney and the primary champion of ConsensusDocs – an alternative to the AIA standard contract that aims to align parties and ensure fairness in the A/E/C contracting space. Listen here!
BJ Kraemer, President