THE Enforceable Contract

Image of business contract on background of business partners handshaking

The days of the so-called gentlemen’s/gentlewoman’s handshake agreement are over if they ever truly existed.

One of the most famous handshake deals was the 1983 acquisition of Getty Oil by Pennzoil.  Texaco sought to sweeten the deal with a superior offer that Getty accepted.  The original deal made in New York was later upheld in the state of Texas and Pennzoil prevailed.  As with much litigation, it appeared jurisdiction the trial was held mattered a lot.  One wonders even in Texas if that type agreement would be upheld today.

Agreements are broken all the time and the soc-called ‘he said–she said’ defense is frequent.  Moreover, loose interpretation of poor or deliberately cloudy language gives the unscrupulous an upper hand.

For example, early in this writer’s sales career my team closed a (single) deal that represented over 10% of a public company’s division yearly sales.  The company reneged on the commission deal citing its ability to renegotiate commissions for ‘unique’ situations.  Needless to say, I resigned and no one else ever tried to go for the ‘brass ring’ deal again.  Guess they won.  Maybe not as my personal sales throughout my career were enormous dwarfing this first multi-million dollar sale.

In another case, a technology deal fell apart when (after a handshake) the buyer refused to pay.  You can imagine what happened next.  Finally, how many of us have been lied to about opportunities?  Happens every day.

Recently, I secured an online offer for an artmobile I wanted to sell.  Upon “inspection” I was told blank, blank were issues and the price was reduced by 2/3.  I left and will offer the name of the national firm to anyone who wants it.  What goes around comes around.

Caveat Emptor (Buyer Beware) has been replace with the due diligence both parties are now required to perform.  And this assumes both parties are engaged in a legal transaction.  All bets are off if you succumb to dead relatives in Africa leaving you millions, huge lines of bank credit offered and thousands of nefarious thieves scamming (too weak a word–should be just be out right criminals)

Trust But Verify

Sage wisdom from an actor turned president.  Oh wait, he was too old and unqualified, so it must not mean anything!

We all have to do business with a wide variety of individuals and even organizations with questionable ethics.  We must get our so-called ‘ducks in a row’  and maintain a high level of situational awareness.

What steps do you take to make sure you and your firm enter into strong enforceable contracts?

For More Information

Please note, RRI does not endorse or advocate the links to any third-party materials herein.  They are provided for education and entertainment only.

See our Economic Value Proposition Matrix® (EVPM) for additional information and a free version to build your own EVPM.

The author’s credentials in this field are available on his LinkedIn page.  Moreover, Dr. Shemwell is a coauthor of the just published book, “Smart Manufacturing: Integrating Transformational Technologies for Competitiveness and Sustainability.”  His focus is on Operational Technologies.

“People fail to get along because they fear each other; they fear each other because they don’t know each other; they don’t know each other because they have not communicated with each other.” (Martin Luther King speech at Cornell College, 1962).  For more information on Cross Cultural Engagement, check out our Cross Cultural Serious Game.  You can contact this author as well.

For more details regarding climate change models, check out Bjorn Lomborg ands his latest book, False Alarm: How Climate Change Panic Costs Us Trillions, Hurts the Poor, and Fails to Fix the Planet.

Regarding the economics of Climate Change, check out our blog, Crippling Green.

For those start-up firms addressing energy (including renewables) challenges, the author can put you in touch with Global Energy Mentors which provide no-cost mentoring services from energy experts.  If interested, check it out and give me a shout.

Scroll to Top