Maybe it’s an Asian thing. When it comes to contracts and agreement, we usually don’t like to go through them or pay much heed to the formation of one. It would be rude if you ask too much questions and scrutinize the agreement in details. You are suppose to just accept them- no question asked. How many of us actually look carefully into our employment contracts before signing them? Some of us don’t even realize that our prospective employer had that deadly non-competitive clause in there, and signed happily on the dotted line because our expected salary was highlighted.
We make agreements (and disagreements) everyday. When you sign up on the house loan, you agree to pay the bank a certain interest for a period of time. When you order your meals over the Mc Donald’s counter, you agree to buy a Big Mac with fries and a cup of coffee for RM 9.95.
When we form a company, we are also forming agreements with every shareholders of the company. Agreements can come in various forms, and in our culture, many agreements are done verbally (read: lips service). Yes, nobody wants to bother about the written words until something happens (usually something bad). It’s true when they say a company hasn’t really face it’s worst times until it starts making money.
It’s always a good thing to jot everything down in words. One good thing about technology today is that alot of discussions can be documented via emails. However, to form a long term and happy partnership, each party must be open to the idea of writing down agreements in words. This would kill off any unrealistic assumptions and false expectations between all parties involved.
When dispute happens without the presence of a pre-defined agreement, it’s going to be a very costly experience in terms of money and time. This is especially true for young start-ups.
Even with the best intentions, an agreement is still only a piece of paper aimed to protect every parties’ interest. It’s not an instrument that can protect anyone against the changes that happens within individuals and various external factors. It does not prevent your partners from becoming greedy and overly ambitious. Hence, one should always practice extreme caution when forming an agreement with another party. Experience will be your best friend when it comes to selecting a reliable partners, though you should never push your luck too far. I have put my money on the wrong horses too, but what doesn’t kill you will make you stronger and wiser, hopefully :-)
After reading this, I hope you will consider to write down in words when you are striking an agreement with another party, especially with your close friends. It’s well worth the effort and it could possibly even save your friendship during the darkest hours. It’s not about being calculative. It’s more about sincerity and integrity. Better to have the plan fall out now than to go into a plan that’s destined to fail. When it doesn’t work now, you can bet it’s not going to work out later.
It’s not going to be easy, since our culture has been thought to always accept things first, and ask questions later. Just like how we’re taught not to disobey our elders, even when it’s very clear that they are on the wrong divide.
So, if you value the trust and integrity of your partners, put them down in words.
Can Wealth Last 3 Generations by Ong Eu Jin (Hard Copy)
