At the International Association for Contract and Commercial Management (IACCM) conference last week a speaker mentioned that the contracting community needs to rethink standard contract Terms and Conditions—or Ts and Cs. He challenged the group think about “squaring” them to include Trust and Collaboration, as in T2 and C2.
Why? Because contracting remains stuck in the old-school pattern of rigid terms and conditions that strictly describe limits of liability, risk allocation and avoidance and indemnification provisions. Those items still are important in contract negotiations of course, but somehow along the way , or not taken seriously enough.
The book Getting to We: Negotiating Agreements for Highly Collaborative Relationships notes that it is time for a new approach and mindset for contract negotiations—time to move beyond a “me-first, I-win-you-lose” strategy and replace it with highly collaborative partnerships. This new approach would embed a set of ethical social norms based on mutual trust as the foundation of the deal.
Getting to We and more recently, the white paper “Unpacking Relational Contracting: The Practitioner’s Go-To Guide for Understanding Relational Contracts” assert that companies can establish highly collaborative relationships based on a foundation of six common social norms or guiding principles (reciprocity, autonomy, honesty, equity, loyalty and integrity). The guiding principles tell the parties both how to act within their relationship, and architect relational contracts. The principles flow into the basic decision to trust and collaborate, and the necessary steps needed to build and maintain trust.
Image: Change on Terms by Michael Simmons via Flickr CC