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Ten tips to ensure your contract fails

November 20, 2017

Over the years, I have had the good fortune to witness multiple instances of contracts failing to achieve their desired results. Organizations use many different techniques to ensure failure, but I have observed several that seem to be especially popular. I thought I would share them, in case you’d like to try them out. Alternatively, perhaps you would like to contribute additions, or highlight your personal favorite.

The top ten are divided into ‘do’s and don’ts’. We will start with the ‘don’ts’.

DO NOT

  • Gather and assess complete requirements: it’s best to surpise the counter-party with your true needs or capabilities after the contract is signed.
  • Take account of stakeholder views or interests: they will only create obstacles and cause delay.
  • Test supplier capabilities to deliver: it’s price and savings that really matter, so forget those people in the business who demand quality and performance.
  • Address uncertainty or volatility when you draft contract terms: it is often obvious that things will change, but that will be someone else’s problem.
  • Try to make your contract intelligible: we all know that contracts must be structured and written in a way that no one will readily understand or be able to use.

So what are the ‘must do’ techniques?

DO

  • Use power to impose maximum risk on the counter-party: negative incentives and unfair terms will ensure limited collaboration and are useful in creating an environment of blame.
  • Use legal terminology which makes your contract threatening and didactic in tone: research has shown that this approach is effective in demotivating your counter-party.
  • Specify as precisely as possible how work is to be performed: it is best to ensure that there is no chance of innovation or improvement in how services are delivered.
  • Pass the signed agreement to someone with little or no training to oversee performance: not only will this hasten failure, but it also offers someone else to blame.
  • Ensure that the counter-party is rapidly held accountable for anything that goes wrong: after all, it is always someone else’s fault.

 

 

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