Commercial activities are to be creative. Does that mean contract development and negotiation is also a creative activity? My answer is clearly yes – with some safeguards. However most organizations focus on the safeguards and forget the creative part, with sometimes dire consequences.
Safeguards need to be implemented to protect the organization – the legalese that is often boring, sometimes useful and never to be forgotten for your piece of mind. I am talking about limits of liabilities, mutual indemnities and all these clauses that you must have in your contract to protect yourself in case things go really awry.
Still beyond this we should not forget that a Contract is there to reflect a commercial deal; and that a commercial deal is fundamentally the result of a creative process; therefore, for the contract to be successful, it needs to reflect the creative result of the negotiation (which hopefully will make the safeguard clauses superfluous).
Contract Managers in the industry are too focused on establishing compliance to a set of norms. They do not understand enough that a Contract needs to reflect the outcome of a highly creative process whereby we have developed a commercial approach tailored to the situation. The contracting process (including compliance) and format needs to be flexible enough to accommodate this creativity – without certain bounds.
Let’s transform our contracting processes to account better for the creative nature of this endeavor!
