Legal Agreements are key to every business for the simple reason that relationships are how we relate and connect to do business, and agreements are what define, support and protect those relationships.
This free legal information is made available courtesy of Counsel to Creativity.
Often it is in the relationships that we feel the rubber meet the road in our business. Why? Because relationships are living, breathing—and dynamic—things, and our business is designed to provide value to another (whether another person or another business) which means it can’t exist without relationships. Whether between two people or two businesses, relationship is human. And so, I dare say, as challenging as it is exciting.
That is what makes business agreements so important.
You can think of your business as having 3 key types of Relationships:
- Relationships in which you provide;
- Relationships in which you receive; and
- Relationships in which you partner.
Forgive me. This is a bit of a simplification. In all relationships, you are both providing and receiving; that exchange of value is what creates a contract. What I mean here is the position your business holds when it does what it does to carry out its purpose. Ask:
Is it providing the value for which it was established?
Is it receiving something in order to enable it to provide the value for which it was established?
Or is it partnering in order to enable it to provide the value for which it was established?
For each of these key types of Relationships, there are then two main groups with whom your business interacts.
You provide value to (1) your target market and (2) your clients.
You receive from (1) your team and (2) your vendors, including independent service providers, in order to deliver value to your target market and clients.
You partner with (1) other owners of your business and (2) other businesses (in joint ventures) to provide value to your target market and clients.
Each of these relationships is best supported with a written agreement.
Why? Because, as we all know, relationships are living, breathing, dynamic things. Things change. The conditions of business change. The needs of business owners and clients change. And misunderstanding happens. Or simply different understandings happen because what was intended for the relationship by each person involved was a little different and, human as we are, each thought the other thought and intended like she did.
Agreements get that all out in the open. And you get to see—and really talk about—what is it we’re really agreeing to and how are we going to work together?