Of contracts

We live and die by Contracts in Business. The amount of time wasted on preparing contracts is phenomenal. It seems half the time of a successful manager is spent on either preparing contracts or making powerpoint presentations. Both hardly serve any purpose.

Incidentally, on powerpoint presentations, one of my friend who is a CEO was telling me that every organization should employ a professional powerpoint creator whose only job will be to create presentations. A novel idea but quite relevant in today's corporate world.

Coming back to contracts. I have held the belief that if the other guy is a crook, there is no need for a contract anyway as he is bound to break it and find out some loopholes in it to make you run around for donkey's years, especially if you are under the Indian court's jurisdiction. If the other guy is a honest person, then there is no need for a contract, as he is not at all likely to break a gentleman's word or an oral agreement.

Either way, a contract is redundant. I remember when I went to sign the contract to become a NIIT Franchisee in 1994, I was asked to sit in a conference room, dumped an agreement running into hundreds of pages and asked to review it in one hour. I didn't touch it but pressed the buzzer for the guys to come back in less than 2 minutes. There they were, couple of managers, a lawyer, the PRO etc etc., all armed with large dossiers and asked me officiously "Mr.Rajan, you can ask any doubts. We are here to clarify them"

I just looked at them and asked "Where do I sign?"

They were flabbergasted and went into a huddle. It was almost comical to watch. "Do you mean to say you have no queries? But you MUST HAVE queries"

Poker faced I told them " I have no intention of breaking any agreement signed by me. I know you would have taken utmost care to protect your interests and if I really want to break the agreement, I can find a smart lawyer who will pick a hole in any agreement. So be good and tell me where I should sign".

A frenetic discussion took place and they left the room. After a while, I was called to meet the CEO, Vijay Tadani, who thought I was not serious as I had not bothered to ask any clarifications on the agreement. They would not have signed the franchise with me but for the fact that I had established my credentials by bringing to the table a DD for Rs 3.5 lakhs.