World Poker Tour

Contracts are living, breathing documents. No matter how hard you try, you can never anticipate all eventualities or even accurately portray the complexities of the real world. That makes perfect sense. And, people on all sides of every deal come to understand that once a contract is signed, the practical “deal” begins to evolve and work based on real world conditions. The reason contract negotiations are such a bear is because everyone knows that if something goes wrong and the parties wind up in a dispute, it is the contract that everyone goes back to in order to resolve the dispute — despite what the relationship has evolved into.

I suppose you could keep updating the contract, but the reality is that we have businesses to build and run. And, already make enough money …

My latest attempt to solve the reality/contract divide is to aggressively use arbitration clauses. If there is an area of the partnership or deal that both sides understand will be changing enough that it is hard to draft the possibilities now, we describe what is supposed to happen in the deal, that we will work together in good faith and if something goes wrong, we can submit the matter to arbitration while we continue to work.

Now, the reality is that no one wants to go to arbitration and hardly ever will. This approach allows the contract to breath and the relationship to grow without being constrained by an overly restrictive contract. It also may help you get to a deal where one was not possible because both sides are trying to control something that no one understands yet.