Good Fences Make Good Neighbors

Good Fences Make Good Neighbors

Robert Frost’s 1914 poem Mending Wall began this proverb.

Good fences do indeed help make good neighbors. A good fence is a line of mutual respect and understanding with minimal ambiguities. A good fence is a mutually-agreed upon boundary, with implied and explicit responsibilities for both sides to maintain and respect those boundaries. A good fence shows no partiality. And building a good fence creates a sanctity marking every human boundary, physical or psychological, of stones and mortar, or simply an invisible line in the sand.

When it comes to investing in a building (whether a kit or constructed) , a good contract makes for a happy outcome for all involved.

Contracts, when done properly, should simply define those relationships between a business and anyone they work with. A contract documents expectations each party has, and how each party sees this transaction playing out. It does protect a business but also protects the party they are contracting with. Here are five primary objectives for every good contract. 

  1. Be clear. Robert Frost used this saying to represent unnatural separation, in his poem Mending Wall, but separation and clarity of parties in contracts are good. Both parties need to recognize they are separate entities and have their own motivations, considerations, and gains in a contract. By ensuring clarity of each party’s wants, there can be no confusion as to who is to do what in a contract. 

2.   Be certain. In contracts, all parties should be certain of an outcome no matter what direction parties take. Should everything go smoothly and both parties perform, both parties should know exactly what they are getting. If there is an issue with one party’s performance, steps to fix or resolve this issue should be laid out in no uncertain terms.

3.   Be complete, a contract should answer all questions about any transaction and stand by itself (meaning there needs to be no clarification). If there is an unresolvable dispute, a court will only consider what a contract says, not what each party verbally understood or agreed to outside of a written contract. 

4.   Be easily understood. A contract should be drafted so laypeople can clearly            understand expectations and will not lead to confusion. Remember, if there is a dispute, a court or arbitrator with no technical background and no knowledge of this transaction is deciding your fate. 

5.   Like any relationship, contracts open each party up to risk. But also, like any          relationship, a party can gain nothing if they are too afraid of taking a risk of getting hurt. Contracts can attempt to reduce this risk, but a party contracting only to reduce their own risk is not one inspiring confidence. Instead, contracts should foster a trusting relationship. Be open about intentions, clear on requests or needs, and do not make assumptions. By fostering trust, a contract is nothing to fear.

Investing in a building without a contract (or with a minimal one) puts both parties at risk. In following articles I will endeavor to reduce risks for both new building owners as well as their providers/contractors.

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