Linda Alvarez discussed “Discovering Agreement,” a powerful alternative to the old-style adversarial model of contract law. Whether you’re buying a cellphone, selling a business, starting a job, or hiring an employee, contracts are a fundamental part of our personal and professional lives. Traditional practices pit contracting parties against one another, laying a foundation of mistrust. Discovering Agreement is a new paradigm that places shared vision and values first and foremost in the negotiation. The result is a stronger, more sustainable, and enjoyable venture that can endure and prosper—even in the face of disagreement or unexpected change.
1. Traditional contracts are usually structured to try to predict everything that could go wrong and determine the outcome if one of those unfortunate events occurs. One of the problems with traditional contracts is that they sit in a drawer until something goes wrong and then are used in an adversarial manner. That approach provides little incentive for either party to “fix” or address what went wrong, as they instead focus on trying to “win” the dispute. This can increase the chance that both parties will lose sight of why they entered into the contract in the first place.
2. The Discovering Agreement approach works within the framework of traditional contracts. It differs, though, by capturing additional information. Contracts structured under this approach provide for each party: (i) their vision, or higher purpose; (ii) their mission, or what they are joining forces to accomplish; (iii) their values, which will be key drivers under which they will operate; and (iv) their constraints and imperatives, which are what they must avoid and must accomplish with the contract. These serve as touch points if anything goes wrong, to bring both parties back to why they entered into the agreement and what they were trying to achieve. These can either be in a preamble or in an exhibit, as an addition to the deal points and actions that a traditional contract captures.
3. The other key difference in the Discovering Agreement approach is the inclusion of an additional provision for addressing change and engaging conflict. This clause calls for the parties to first try to resolve any dispute through direct conversation. And that discussion will hinge on considering the vision, mission, values, and constraints and imperatives they set out at the start of their relationship. This requirement for dialogue can allow both parties to alter the terms of the agreement and get to a point where both “win” and achieve what they want from the venture. To be practical, this provision will include a time limit. So, for example, if the parties are unable to come to agreement after a certain number of hours of discussion, then they agree to call in a mediator before resorting to litigation or other proceedings.
Founder, Discovering Agreement, Attorney, Integrative Law Practitioner
This summary provided by PricewaterhouseCoopers.