Agreements are a Necessary Evil

October 26, 2010 — 1 Comment

Boundary stones have been used since the beginning of time as a way to identify property, whether private or when dealing with borders between countries and other local administrations.  Made of stone and often marked by owners, they stand as a reminder of past purchases, conquered land, and other formal agreements.  The old adage, “Remove not the ancient landmark” stands as a warning to those who would change the boundaries set up by constituents.

While most of us are not going to spend the money on lawsuits when dealing with smaller projects, formal agreements, like these boundary stones, must be put in place regardless company and deal size.  They should be placed in easy to see (read) locations, and agreed to by all parties involved, as pictured in this ancient land marker above.

More clients are lost over poor communication on agreements than I will ever be able to count; usually with regard to scope or price.  When deals are done without an agreement, two excuses are often raised:

1. The sales team fears putting it into writing, thinking it will slow down the sale or draw attention to elements of the agreement that may not sit well with management (on either side).

2. The client refuses to sign anything binding, usually because they don’t have the authority to do so, or don’t want to be locked into anything long term.

There may be other reasons, but these two pop up often, and as you can see, both spell trouble down the road.  It is definitely faster and easier to agree on a hand-shake and get started, vs. draw up a formal agreement and getting a signature.  But what happens after the project or service begins:

  • The client thought they were also getting ____________
  • The client expected the price to be _________

And notice, it is always in the client’s favor!  I can’t remember too many clients coming back and saying, “Oh, I think we owe you another $10,000.  We’ll send it over right away.”

So, if you’ve been reading the last several posts, proposals may be landfill, but agreements are boundary stones.  Without them, there is no proof of what you’ve agreed to and the client is always right.  Push the issue, and you are likely to be out of a client.

 

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One response to Agreements are a Necessary Evil

  1. 

    Metes and Bounds:!: If it’s good enough for Real Estate, it should be good enough for sales agreements! Would one consider purchasing real-property without a signed agreement? They shouldn’t!

    Good Blog!

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