Contracts – a personal thought about them

I’m a real estate broker and law school student.  Since I began in real estate, I’ve been learning contracts (instead of just signing them), and since I began law school, I’ve been studying law regarding contracts, the effects of bad contracts, development of contract language, and so on.  All this talk about contracts forces my mind back to contracts at the personal level.  At the personal level, we have promises, we have marriage relationships, deals we make with friends, buying things, etc.  And then I think about the philosophy of contracts.

We contract because we believe in a result or outcome that will put us in a better position after contract performance.  The result and improved position is impossible or much more difficult without the cooperation of the other party to the contract.

Sometimes contracts go bad.  I recently sued a real estate sub-lease tenant because of a contract gone bad.  The judge looked at the contract and saw all the necessary components to the contract that I had drafted and we had signed, and then saw the contract default which led to the damages I was suing for.  This situation has caused me to reflect on the actual dialogues and reasons for the default.  I also listened closely to the defense presented in court.  The judge saw that the defense was an entirely different story than what was on our contract.  Same with the dialogues I had with the defendants as the contracts were in formation.  One of the parties showed bad-faith.

To me, the marriage contract is one of the most interesting.  Theoretically, two people believe in an entirely better existence together than separately.  While some of these marriage contracts appear successful, I wonder how often the outcome is really what was intended. Obviously, the divorce rate shows how many fail.  In either case – success or failure – I think its a good idea to carefully evaluate the possibility for success of a marriage in the same way I evaluate contracts in other parts of my life.

Evaluate the likelihood that both parties can successfully perform.  Can the husband be a good husband?  Or does he have a history of addictions, abuse, filandering, and so on?  Can the wife be a good wife?  Can the wife work and be a good mother as expected?  And apply that kind of logic to both roles, evaluating the likelihood of success.

If the likelihood of success is low, then you may reconsider the contract.  Because you will not be in a better position with the contract anyways.

Successful performance of contracts is how all the big and important things have been negotiated and accomplished.