ExtraEagle

One of the biggest mistakes people make about contracts are that they are documents. It is an easy mistake to make. After all large parts of the legal profession have been feeding us this story for at least a century even though they all learn otherwise in their first class of Contract Law 101 in law school.

A contract is an agreement between 2 or more parties. “Between” is the keyword here and indicates a relationship.

For this reason we encourage the use of the word “agreement” instead of “contract” in Agree2. They are pretty much equivalent in legal language but the contract tends to fill people with fear and images of 20 page documents filled with tightly printed upper case legalese. I will continue using “Agreement” instead of “Contract” for the rest of this post.

What makes an agreement special though is that the relationship has strings attached. Each party to the contract promises to do something in exchange of the other parties fulfilling their duty. Understanding this is key to understanding contract law.

Thus a promise from me to pay you $100 is not an agreement and is generally speaking not legally enforceable. However if I promise to pay you $20 in return for you putting lunch on your credit card and you accept that is a legally binding agreement.

This is based on tradition that goes back to the middle ages ( see Law Merchant) and is part of both common law and most countries law codes.

An agreement does not have to be written down, but is pretty difficult to enforce by a court without some kind of documentation.

The contract document you have with a client or supplier complete with your and their signatures is a typical example of this documentation. However records in a database complete with server logs are now equally common. In either case they are only documentation or evidence of the agreement and not the agreement itself.

Thus the agreement you have with your client is a relationship between the two of you, albeit documented by the contract document.

To understand this better think about this try to think about other various legal agreements you might have with other people.

For example if you are married you have a relationship with your partner known as a Marriage. While there may be a marriage contract or the specific set of vows spoken out during the marriage ceremony, no one would confuse their marriage to a piece of paper or the exact words spoken several years back.

The same goes for business partnerships or even one click buying something on Amazon. All parties should understand clearly what the relationship entails.

For many types of agreements there are so many customs and traditions governing the relationship that leave little reason for you to specifically document it.

Think about when you go to a lunch counter and order a sandwich that is listed as $7. You are actually accepting an agreement to pay $7 for a sandwich that they will prepare for you.

Everyone understands the obligation so there is little need to print out and sign a 3 page agreement before hand. It would be breach of the contract if the guy behind the cash register all of a sudden wants to charge you $10. It would also be breach of contract if you decided to pay only $5 once you have received your sandwich.

However if you don’t want to pay cash and prefer to use a credit card the standard age old agreement changes to a slightly newer agreement and may require you do sign a piece of slip (documentation) that might say something:

CARDMEMBER ACKNOWLEDGES RECEIPT OF GOODS AND/OR SERVICES IN THE AMOUNT OF THE TOTAL SHOWN HERON AND AGREES TO PERFORM THE OBLIGATIONS SET FORTH BY THE CARDMEMBER’S AGREEMENT WITH THE ISSUER.

Note that many credit card slips don’t even include this text as it is pretty much well understood by everyone and there is no need to document the duties themselves and we end up only documenting the acceptance of them.

You might also be able to document your part of this agreement by waving your mobile phone near or entering a pin number in to a terminal. While you didn’t sign anything it is still a legally binding agreement based on new traditions and customs.

I will cover documenting the contract in of my next posts here. So remember to subscribe.

Also remember IANAL but I play one on my blog.

If you’re subscribed to this blog you might have signed up for the Agree2 beta back in March when we first launched it. So what has happened since then you might ask. March is a long time without a peep.

Well the March beta launch was successful, but not in the way that we had initially hoped for. Initially our beta was pretty limited, but we quickly began to see and hear the reaction that it’s cool but nothing more. Very few people tried more than just signing up and looking at it.

We interviewed various users and realized that it was kind of overwhelming at first. Too much was going on. Users who are already kind of scared of dealing with contracts in the first place felt even more scared with all the options that were available.

We took a deep breath and decided that this was actually a good thing. There were a small handful of users, so we decided to lay low and think the interface through again. While most of the underlying code is still there we have completely redesigned most of the important processes.

We think that the end product now is a thousand times better. Looking at usability we also went through and redesigned many of the core processes, such as templates and agreement editing.

A large key feature which wasn’t really there before are socially written public agreement templates. In the above screen shot you can see the ones available at the moment. Why not help create the perfect graphic design contract, user agreement, NDA etc.

Anyway we are now back, if you’re already registered try logging in again at Agree2. If you already signed up for our beta keep an eye in your mailbox for your first Agreement in Agree2 our User Agreement (yes we eat our own dog food). If you would like to try it out go to Agree2 and register yourself.

This time we will open up more widely. However it is still a beta. And when we say Beta that does mean that there may be occasional error screens, funky javascript and screechy style sheets. We are really happy to say that 2 of our beta users are already confident enough with us that they are using Agree2 for their own commercial agreements - you guys rock.

Please keep subscribed here as we will now be back more frequently talking about our features and also the basics of contract law.