Section III— Cards on the Table, Face Up
But that wasn’t exactly what happened. Well, it was, but it wasn’t, which is a lawyer’s way of telling a story, using multiple, even contradictory positions. The above recitals combined anecdotes involving several different vendors, emphasizing the common elements. The products and services at issue bore as much resemblance to a baby stroller as my drawing. But not all of the stories ended the same way. Like contracts, like reality itself, the stories combined things that weren’t entirely there, collections of possibilities along with actualities, a series of contingencies.
Here, the story of the failed contract changes. It is retroactively amended, taking it back to where it began.
Both sides recognized they started off in counterproductive ways. The contract itself was a show of disrespect. So were my wiseass comments. Sure, they weren’t intended for the vendor’s eyes—but a concealed show of disrespect seems all the worse when it comes to light.
I needed to pay careful attention to the vendor’s real needs. The real needs, as opposed to trying to cover every possible variety of the way things might go wrong. Therein lay the places where leverage might lie. The limits of give and take might be exposed. It meant listening and analyzing in a way that invited a reciprocal response. It meant being honest and genuine. But it also meant I would have to lose some of the things that would be really nice to have, but I didn’t really need. And I’d have to surrender on some of the beachheads that only existed in theory. Otherwise, I’d lose the whole thing, the real thing, the totality.
I put my cards on the table face-up, rather than trying to engage in sly ambiguities or trying to exploit obscure rules of contract construction. To reset the engagement, I put it in simple terms. “The goal is to keep each other happy. What I need from you is a written statement about how we’re going to accomplish that end. There is a very simple way to reach that goal. The contract continues as long as we’re both happy, and it ends as soon as either one of isn’t. When it ends, we go our separate ways, owing nothing further to one another.”
It sounds great, but it is a kind of ideal, a heroic version of how I see how I deal, something proffered by Gandalf the Grey to contrast against the contract from Mordor.
Against the backdrop of these two abstractions, these two fictions, these divergent and conflicting possible realities, the parties began to sort through the Gotchas.
Maybe the contract had been initially presented out as something contemptible. Maybe I couldn’t stand the lawyer on the other side, and maybe there was every reason to distrust the company making the offer. But while we were still in the negotiating phase, and still talking, there is some kind of mutual attraction still in play.
You don’t have to be a friend to someone you work with. Sometimes friendship is even a disadvantage. You can lose respect for a friend and still love them, and still be willing to make great efforts and sacrifices to help them change. In business, Respect tends to have more utility than friendship.
One way to foster respect in negotiations is to keep in mind Kafka’s admonition. Everyone is the hero of their own imagination. It helps to imagine the imagination of the other party. It works something like empathy, but without emotional content. It is part of the way lawyers are trained to analyze ambiguities and uncertainties, so they can take either side. The canny lawyer will foresee not only the arguments that support his or her position, but also those that refute it.
Start by identifying mutual goals and mutual values. State them in the recitals.
Work toward a relation that continually balances the simple values of competition and cooperation.
The vendor and the hospital ended up bonding with a dynamic interchange, bringing something to life, and keeping it alive. Through the contract negotiations, and the relationship it created, they kept asking, how do we maintain respect? How do we deal with our own mistakes and those of other parties? How important are the contributions of specifically identified individuals? How important are the contributions and resources of the company providing those individuals?
Is there a passion for excellence?
The fairy-tale of the Valiant Little Taylor did not actually end with the marriage to the Princess, as many fairy-tales do.
After her marriage, the Princess overhears the tailor talking in his sleep, confessing that he is merely a tailor of humble origins. The world of dreaming, ordinarily the realm of pure imagination, reveals the tailor for what he is in the material world. Not satisfied with the way the bargain has turned out for her, the Princess plots with her father to become a widow.
The Princess was a bit of shrew…
The tailor learns that two of his servants have been sent to assassinate him. But as they approach the tailor’s bed chamber, he stages another episode of talking in his sleep, but this time he is fully awake. He reminds the assassins that he killed seven with one blow, slew two giants, and captured a unicorn. And the story alone is enough to make the assassins flee.
This is a slightly different species of magic. Not one that imitates science, but one that stems from the way people relate to one another. The results are not exactly predictable. It doesn’t work like a magic word or the throwing of a light switch. It is complicated. The effects produced by the story depend on the way the story is told, rather than the details it contains.
After the failed assignation attempt, the King is content to leave his son-in-law alone. And the tailor and the Princess settled into some form of peaceful co-existence, even if they didn’t exactly live happily ever after.
The relationship between parties to a contract can be a bit like a marriage—based on varying degrees of commitment and passion, the two sharing a chemistry that can fuel or deplete the other.
I often brought my own set of passions to the contract process. I mean, contracts weren’t exactly what I would call pursuing my bliss, to borrow Joseph Campbell’s words. But I had made a commitment to the enterprise. It wasn’t about me, but an organization I cared deeply about, a corporate culture I valued, a company that pursued goals that mattered.
I was part of a team, and the people and organizations engaged through our contracts were part of accomplishing those goals—often an indispensable part.
The vendor and the hospital committed to sharing specified common values. They both agreed to promote each other’s efforts. As part of those values, they both agreed not to discriminate on the basis of gender, race, religion, and national origin in the way they obtain goods and services used in performing the contract. The nondiscrimination clause wasn’t controversial, since it is the law of the land. But we also made the same nondiscrimination promises about sexual orientation, which wasn’t exactly the law of the land at the time I was practicing law.
That Parties agreed, in advance, on how to disagree. We outlined specific procedures to avoid the courts, if possible, because we recognized the way the American legal system overemphasized competition and fighting as a means to determine justice, fairness, and truth. The courts were unwieldy, quirky, and expensive.
We agreed to escalate discussions up through our respective bureaucracies. We required mandatory mediation— which is kind of a legal placebo, involving a procedure that looks vaguely judicial, but has no power to force a resolution. The vendor wanted to require Arbitration, though that became a major point of contention. Arbitration is binding and enforceable through a process that is cheaper and faster than ordinary litigation. But our organization was generally against requiring Arbitration, having had some bad experiences with the process. We had to deal with arbitrators who showed a bias for splitting the amount in controversy in half, applying Solomon’s solution, rather than rigorously examining the issues and law. The vendor, being from out of state, didn’t miss the fact we’d have a bit of a home-court advantage if we proceeded as ordinary litigants. The Parties ended up splitting the baby, arbitrating if we brought suit, litigating if they did.
I’ve always had a sweet tooth for a liberal optional termination clause. That is often an easy, quick fix. And sometimes it is too easy a fix, like opting for a cheap wristwatch you know might quit on you at any moment, as opposed to a fine timepiece that requires continual care and cleaning. Both kinds of watches will give you the time of day, but the experiences are profoundly different. In any event, the quick fix wasn’t possible here, since the contract required the vendor to gather long term subcontracts in advance and undertake a hefty capital investment before starting performance.
At this point, the vendor and the hospital had become eager to strike a deal, but kept hitting impasses on some of the critical details. They both decided to kick the can down the road, and agreed they would work together to find mutually acceptable and mutually beneficial ways to resolve those issues after the contract was signed. It ended up working out just fine. But vague agreements about somehow agreeing carry their own serious risks.
There’s a funny thing about contracts—these lengthy tracts of impenetrable discourse. The threat of legal action means little to nothing if the parties are continually working in a way that shares value, maintains respect and proceeds in good faith. I’m talking about parties that share a mutual commitment to fairness, to balancing cooperation and competition, to weighing the needs of the present to ensure a future. Parties that share a passion for excellence. There is a view that contracts are only as good as the parties themselves. Maybe the contract had been loaded with Gotchas that one side managed to sneak or muscle in—but if things are going really well, the side that put them there might be less inclined to exploit them, particularly if they have an unfair impact. The relationship itself has acquires more value than the individual transactions that plot its course.
Not every contract has a clear zero-sum exchange, the kind associated with a product purchase, where every penny paid or withheld benefits one side or the other. Sometimes the parties approach a contract with objectives that have nothing to do with one another.
Consider a contract between a drug manufacturer and a hospital to conduct a clinical trial, an experimental study of a pharmaceutical to determine its safety. I dealt with them all the time. I would commonly run into problems with the confidentiality and intellectual property clauses.
The manufacturer had used sweepingly broad language, positioning themselves to lay claim to every possible bit of information arising from or relating to the activities under the contract. That was understandable— that was an important part of how they earned their money, by controlling information through patents and trade secrets. But the sweeping language they used would have created insurmountable problems for the hospital if we actually put them into effect. Under the sweeping, proposed definitions, large portions of data they claimed as confidential would have to go in the medical records of all the affected patients. The hospital would have to require every insurance company that got the medical records to sign confidentiality agreements—which they wouldn’t do. The insurance companies would just withhold payment for the patient’s care. We couldn’t comply with ordinary subpoenas for medical records without notifying the manufacturer. And we would be forced to make the patients sign confidentiality agreements when they asked for their own records—which the law prohibits.
In the vast majority of instances, I could work out reasonable language that met the legitimate needs of both the hospital and the drug manufacturer. But every now and then, I had to deal with a party that just didn’t get it.
Information Technology Contracts pose their own species of conundrums. The product is a mere babe when viewed against the pageant of contract history, but it comes swaddled in the dusty provisional cloaks of its ancient ancestors. Information Technology products are ephemeral items—not exactly machines, not exactly books, not exactly services, not exactly matter, not exactly energy, but an amalgam of all of these, and more. The vendor won’t promise the item will work. Everyone knows how often computer systems fail. That is the nature of this product, not unlike medical services and legal services. The product is a puzzle piece, and no one knows how it might change in function or change in result when it interacts with other puzzle pieces. There are many factors at play—invisible subcontractors, interconnected intellectual property, software, hardware, applications, and programs.
Information Technology Contracts flaunt their uncertainties, flagrantly disclaiming the reliability of their performance and results, reveling in their wide reputation for failure, mercenary in their treatment of intellectual property, and trusting in the way the culture tolerates all of these issues. The vendors are not ashamed to proffer contracts that look increasingly arrogant, unrepentant, non-negotiable, sinister, and cynical.
Your information might become inextricably linked to the vendor’s, resulting in a symbiosis of need, stretching into the future for an unknown duration. Maybe you might get a promise of limited downtime. Maybe you might get a promise that the product will generally, but not consistently, perform according to specifications for a month—long enough for you to decide if it is worth keeping. But after a month, if it does nothing more than play the 1978 arcade version of Space Invaders, you’re stuck with it, and the vendor can keep your money. Or maybe the vendor might agree to fix any problems that arise, and charge you for their services. Sometimes you can set the rate for repair services for the duration of the contract. Sometimes the vendor hits you with a vague adjustable rate— using a term like “usual charges” or “prevailing charges” or “customary charges”, all which translates as they can charge you whatever they think they can get away with. Or they might woo with a sweetener, like a ten percent discount on customary charges, which still translates as they can charge whatever they think they can get away with.
I’ve seen an Information Technology contract that consisted of only a single line, on paper. It referred me to a website where the full text of the contract lay, and that text contained a hyperlink to further contract provisions, and those provisions contained hyperlinks to additional provisions, and these provisions lead deeper into further electronic mazes, all of which contained a clause allowing the vendor to change contract terms by posting them on the websites, and the new terms would become effective unless the customer objected within fifteen days of posting.
The contemporary reality is that more and more contracts involve Information Technology components, even in places one wouldn’t expect—everything from automobiles to watches. The other day, I had to look at my phone to find the time because my watch was too busy taking my pulse. This was something I had joked about in a comic book I wrote back in 1978, but it had become true.
Every contract is turning into an IT contract.
A pessimist might say the shadow of Mordor is spreading across the world.
Stories hold to certain patterns, but within those patterns are infinite variations. Stories disappear. New ones are discovered. The old ones reappear, told in the old way, or in new ways. Changes are necessary to meet ever shifting standards of fairness and justice, commerce and government, the future and the way it interacts with the past. There is a basic human need for certainty, as embodied in the both the past and simple generalized rules, just as there is a basic need for flexibility, as embodied in exceptions and variations and complexity.
You could make a generalization that the need for certainty, dependability based on prior experience and established traditions, translates politically into conservative values, while the need for flexibility translates into liberal values. But those generalizations are riddled with exceptions, and exceptions to the exceptions, resulting in countless variations of intermingled variations on the generalized terms, until they barely have any meaning in their purest forms.
This essay similarly struggles to balance certainty with flexibility, torn between their conflicting imperatives, the need to contract as much information as possible into the smallest possible area against the need to make it comprehendible, the simplified generalization and the intricate complexity of many exceptions that constitute its actual nature.
There is wisdom in using familiar terms and provisions that have been used many times before, and backed up by case law, statutes, and tradition. It is the conservative approach, a way to ensure certainty in the face of uncertainty. But there is equal wisdom is allowing for flexibility and embracing change.
And there is wisdom in embracing paradox. Uncertainty is the only certainty.
I cautiously qualified many generalizations within this essay because every rule of law is riddled with exceptions, and the exceptions are riddled with exceptions that spiral between complexity and simplicity. The values are conflicting, but inseparable and paradoxical in their symbiosis. No generalization is worth a damn, including this one.
Because they address the future, contracts veer off into realms of conjecture. To use a metaphor from science instead of magic, contracts are like molecules– both seem like real things, but are mere aggregations of possibilities, which could be like this essay, drifting as it may in and out of uncertainty with many core modal verbs.
Parties angle to gain advantages in case things go wrong, often generating many words about dire events that aren’t supposed to happen, far exceeding the words about how to keep thing working well. In their attempts to create certainty, contracting Parties conjure whole realities filled with something akin to dark matter in physics, dense regions that never manifest themselves, and might not even be real, though the concept is generally accepted.
It might seem that I was mainly focused on magic throughout this essay, but the metaphor was balanced with a focus on balance. The law is magical, but there’s a science component as well, and that component isn’t exactly an exact science. In the practice of Law, you can’t stray too far from demands of the real world or the basic values of the culture in which the law operates. You can’t count on clever wording and rule manipulation to get you out of every fix. The magic has limits, and has to be balanced. The magic word, the flip of a switch– these are simple solutions. But as Albert Einstein said, “Make things as simple as possible. But not simpler.”
It is tempting to say that contracts are like Schrodinger’s Cat because you don’t know exactly what you’re dealing with until an actual loss forces you to lift up the lid, but I won’t, because it would be stretching a point anyway, and I’d be straying from my magic motifs into a scientific joke by using a metaphor that has long been beaten half to death, or more precisely, beaten into a state of being simultaneously dead and alive, although I’m playing a magical lawyer trick here, simultaneously saying something while not saying it. Those who believe I can’t have it both ways should be wary of the way lawyers find ways to magically reconcile contradictory propositions, which can be done through a variety of means, including, without limitation, manipulating definitions, or incorporating other documents, even those not yet in existence, or building in structured contingencies, or even with the way they use the word “or”, which can mean either “and” or “or”, and/or the way they use the phrase “and/or” which has the same meaning, but also both. Contracts can be rigged to be heads I win, tails you lose propositions.Much of science isn’t even an exact science, which is why it is prone to revolutions, and paradigm shifts, and deep divisions within its many branches, each with their own prophets and heretics, who are ofttimes the same person.
Medicine is a notoriously inexact science, and I’ve had to include a statement to that effect on so many medical consent forms, it has become embedded in my brain, like a mantra, but maybe medicine can be excused for its inexactitude on the grounds that its subject matter is human beings. Physics isn’t even an exact science because its subject matter can’t entirely be dissociated from human beings, hard as it tries, and it is still forced to rely on approximations, probabilities, educated guesses, and speculation, once you get past the basics of falling apples. Newton’s laws of planetary motion got by just fine by ignoring the wobble in the planet Mercury, until Einstein came along.
While I was practicing law, it seemed the courts and the legislature could not keep pace with the social changes that were transforming our culture. People would ask me for a clear, understandable answer to specific controversies, and I would look at the body of case law, I would look at the language of statutes, and would often come to the conclusion that neither offered any guidance. The Law could not anticipate the kinds of problems I was trying to deal with. The world was changing too quickly. There were no magic words with predictable results. There was no light switch to throw that would illuminate the matter. Still, I needed to give guidance. I needed to make a choice.
Since that time, the pace of change has grown even faster.
The old social contracts are being amended.
Sometimes things change suddenly and drastically, in ways no one expected. A new case is decided that overturns long established precedent. A new statute is passed that obliterates the old statute and all cases decided under it. A startling news story breaks that forces a change in social behavior without changing the law. That is where we are right now.
The story of contracts is about reconciling conflicting human drives. The story contracts basic principles —the ways different peoples of different heritages and traditions with opposing or unrelated goals– who might even despise one another– find a way to make commitments, to balance their natural instincts while apportioning risks, rewards, penalties and losses, while setting standards for shared performance and shared values in a way that fosters respect, in order to shape the future. And the stories of how these efforts fail or are forgotten are the stories of how certain enterprises fair. And organizations. And great civilizations.
I’m putting my cards on the table, now, face up. There has been a hidden agenda all along, or maybe not so hidden, having less to do with contracts or stories or folktales or magic or science or specifics or generalities, and more to do with all of them together in dynamic interaction. Maybe I’m just trying to be a hero in my own hyperactive imagination. Maybe I’m just swatting at flies and trying to pass them off as giants.
Our leaders, like the society they serve, and like parties making a contract, have to strike a balance between trying to deal with every possible outcome and finding a way to move forward with what is right there, right now. They need to communicate, saying what they mean, and making commitments and adjustments, so they can move forward together.
Maybe we can find a way to use the magic that brings parties together to form a contract to unite our conflicted nation, to balance basic drives, to commit to finding better ways to agree and disagree, shaping the future while fostering respect and continuously bringing value to one another.
This essay has a fiction flipside in my story “Come to An Understanding”, in “Remembrance Acres”.
