Business 2.0 has an interesting collection of wisdom from some of the business community's biggest names in this month's issue. My favorites? Penn Jillette and Eliot Spitzer (though this man is so full of himself that it's hard to take him seriously...until he files charges against you :-).
This was one of the few things I learned at Stanford Law School: you never want to have to enforce a contract, because the clear interpretation of a contract becomes much less clear the minute both sides stop agreeing on that interpretation.Make Deals With People, Not Paper
PENN JILLETTE, magician, author, and producerThis was the hardest thing to learn when I was 19. When we first started doing Penn & Teller shows, I thought that if you had a contract, it was enforced. I thought there were the contract police -- so you'd sign a contract that says you're going to give me a million dollars, and if you don't have a million dollars, someone will step in and give me my million anyway. Right.
That's one of the hardest lessons for a guy like me who has no interest in business but now runs a multimillion-dollar enterprise. A contract is not much of a legal document. It's just an agreement that two people who trust each other have made. You can't enter into a contract with anyone that you wouldn't make a handshake deal with, because everything comes down to a handshake deal.
The more experience I got in showbiz, the less I read the contracts. Now I don't bother. If I can't make the deal in a phone call, and have them understand it, then it's not a worthwhile deal. You're making a deal with the people, not with the contract. That's a mistake that people make a lot: "We've got it in writing now." The contract is clarification, but it's not enforcement.
Which brings us to Mr. Spitzer's counsel:
Never write when you can talk. Never talk when you can nod. And never put anything in an e-mail.I need help with this last one. I write waaaaaaaaaayyyy too much.
Posted by Matt Asay on November 29, 2005 09:46 PM
