The contract is a written document that spells out the terms of a deal so there are no misunderstandings. If only it was that easy.
A story from one of our clients illustrates the perils of two parties interpreting a contract with opposite viewpoints. In this case, the dispute was about how long the existing pricing structure should be maintained under terms of the three-year contract.
All was hunky-dory in the 12 months, when both sides were crystal clear about the fees. But in the second year, the situation turned from rosy to contentious when the buyer expected pricing to remain flat while the vendor (our client) argued that the contract allowed for annual fee increases. The vendor even sought legal counsel to verify its position, but still couldn’t get the buyer to move an inch. Deadlock loomed.
So the vendor came up with a practical solution, allowing the buyer to pay last year’s prices for the first three months of the year. Then, going forward, the vendor would raise fees as intended—and give back something of equal or greater value to the buyer.
Sometimes it’s better to negotiate a deal—which generates revenues and satisfies all parties—than to be right.