Form of agreement structure: general principles or detailed elements?
fosco frongiaSenior project manager| ENTE PATRIMONIALE CHIESA GESU' CRISTO SUGFino Mornasco, Como, Italy
Talking about agreements, I noticed that some cultural groups prefer very detailed contract and other ones prefer for of contracts that include only general principles. I think it is due to the culture of the groups which act, in the sense that to prefer a form or the other ones depends to the final target of them: relationship building (principles), contract signature (detailed contracts).
what do you think about my affirmation?
In your country is it generally preferred a detailed contract or a contract based on general principles? Which are the reasons that govern this preference?
many thanks for your contribution Saving Changes...
fosco frongiaSenior project manager| ENTE PATRIMONIALE CHIESA GESU' CRISTO SUGFino Mornasco, Como, Italy
Feb 29, 2016 12:58 PM
Replying to Stéphane Parent
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In my years of dealing with contracts, I have dealt with both forms. Please note that the details missing from a generic contract will usually be placed in a work order called against the contract.
In other words, if the details are not put in the contract, they are usually put in a subordinate contracting vehicle.
Correct Stéphane, working on construction fields I normally used contract with general conditions, which are a different document, and technical specification. Anyway in my experience I saw two different approach (maintaining in each case the above cited structure: contract + general conditions + technical specifications):
- focusing these documents in the manner that the counterpart has to work in a specified manner (prescription focus)
- focus them on the results (result focus)
Naturally these two different approach are based on different responsibility acceptance:
- in the first case the responsibility of the counterpart is more focused in respecting the prescription and less in the result (if the result is not like the expected one but the counterpart applied perfectly the prescription is it responsible of it?)
- in the second case the counterpart can apply different process because it is responsible only for the result (be careful. in this case in some countries YOU are partially responsible concerning the action/process applied by the counterpart).
generally I prefer this second "philosophy" but it is essential to consider very deeply consequences and define control methods.
I'm interested in your opinion, and in the opinon of all people who want participate in the discussion, about my consderations Saving Changes...
fosco frongiaSenior project manager| ENTE PATRIMONIALE CHIESA GESU' CRISTO SUGFino Mornasco, Como, Italy
Mar 01, 2016 7:03 AM
Replying to Sergio Luis Conte
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In my experience, after working in both sides of the desk (as client and as a provider) in quit diferent domains I have saw that contacts with general principles are the most prefered not because the culture, because the sale style. That was a headache for me because I allways was part of the team that must work on "dreams come true" .
thanks Sergio, i think that business field could address in a way or in the another one.
I'm interested in your considerations about my affirmation done answering to Stéphane Saving Changes...
Sergio Luis ConteHelping to create solutions for everyone| Worldwide based OrganizationsBuenos Aires, Argentina
About your considerations when answered to Stephane, to be honest, I have faced both types of characteristics. And I was part of intiatives working with diferent type of business from goverment to others niches. I was in the middle of initiatives where a hugh contract existed and a great number of lawyers existed and I was in the middle of initiatives with hugh companies and a lot of money involved where a contract with not more than five pages existed and all what matters was a question of words. As I mentioned, and based on my personal experience, in my case it was a matter of organizational style and sales people strategy (the same when the negotiation of the contract take place). Personally I always prefer that every detail is written in a paper but along the years I learnt that every detail is not possible to take into account. So, in my personal experience, what I did is to perform a risk analysis, mainly with subject matter experts, and go ahead.
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1 reply by fosco frongia
Mar 07, 2016 5:55 PM
fosco frongia
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Thanks Sergio,
my experience is similar to your one. My approach is the same and my experience learnt to me that we should be careful concerning to the boundaries of the details. We should reach just at the point where details are useful for contract management, over this point the details could be "dangerous" for our scope ( in other words our "project philosophy" is based on the process and not on the results)
Saving Changes...
LIH WANGPM I APM| Siemens Rail Automation Systems Ltd. Taiwan OfficeT'Ai-Pei, Taiwan
It is my observation that a fixed-price contract is generally being issued with details whilst a cost-plus contract is usually being issued like " a work order called against the generic contract." as Stephane suggested.
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1 reply by fosco frongia
Mar 07, 2016 5:56 PM
fosco frongia
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many thanks Lih
Saving Changes...
sandeep KharbandaSales manager| Vanderlande IndustriesPune, Maharashtra, India
I have worked majorly in south East Asian countries , customer always come up big lengthy contract to safeguard them. It's big headache to swallow all the terms and condition of contract but with relationship management anything can be amend because it's not only project manager want the project a great success also all other stakeholder want the successful completion of project .
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1 reply by fosco frongia
Mar 07, 2016 5:58 PM
fosco frongia
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Thanks Sandeep,
this is correct when ALL stakeholders want the success of the project!!
Saving Changes...
fosco frongiaSenior project manager| ENTE PATRIMONIALE CHIESA GESU' CRISTO SUGFino Mornasco, Como, Italy
Mar 01, 2016 7:44 PM
Replying to Sergio Luis Conte
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About your considerations when answered to Stephane, to be honest, I have faced both types of characteristics. And I was part of intiatives working with diferent type of business from goverment to others niches. I was in the middle of initiatives where a hugh contract existed and a great number of lawyers existed and I was in the middle of initiatives with hugh companies and a lot of money involved where a contract with not more than five pages existed and all what matters was a question of words. As I mentioned, and based on my personal experience, in my case it was a matter of organizational style and sales people strategy (the same when the negotiation of the contract take place). Personally I always prefer that every detail is written in a paper but along the years I learnt that every detail is not possible to take into account. So, in my personal experience, what I did is to perform a risk analysis, mainly with subject matter experts, and go ahead.
Thanks Sergio,
my experience is similar to your one. My approach is the same and my experience learnt to me that we should be careful concerning to the boundaries of the details. We should reach just at the point where details are useful for contract management, over this point the details could be "dangerous" for our scope ( in other words our "project philosophy" is based on the process and not on the results) Saving Changes...
fosco frongiaSenior project manager| ENTE PATRIMONIALE CHIESA GESU' CRISTO SUGFino Mornasco, Como, Italy
Mar 01, 2016 8:22 PM
Replying to LIH WANG
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It is my observation that a fixed-price contract is generally being issued with details whilst a cost-plus contract is usually being issued like " a work order called against the generic contract." as Stephane suggested.
many thanks Lih Saving Changes...
fosco frongiaSenior project manager| ENTE PATRIMONIALE CHIESA GESU' CRISTO SUGFino Mornasco, Como, Italy
Mar 02, 2016 3:55 AM
Replying to sandeep Kharbanda
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I have worked majorly in south East Asian countries , customer always come up big lengthy contract to safeguard them. It's big headache to swallow all the terms and condition of contract but with relationship management anything can be amend because it's not only project manager want the project a great success also all other stakeholder want the successful completion of project .
Thanks Sandeep,
this is correct when ALL stakeholders want the success of the project!! Saving Changes...
In my experience a detail contract is the most use, regardless of countries. Local laws make a big difference in the way a detail contract is structured and the wording is key. Never forgetting where the contract will be interpreted in case of misunderstanding.
A detail contract become voluminous opening the door to contradictions. Often those will need to have a technical resolution.
In addition in the construction industry I've seem reference to norms that are contradictory.
A detail Contrat often become too complex, and contradictions become clear just at the execution phase.
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1 reply by fosco frongia
Mar 08, 2016 7:18 AM
fosco frongia
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sorry Vincent,
previous comment was sent by myself but I don't know why in anonymously form
Fosco
Saving Changes...
Anonymous
Mar 07, 2016 8:07 PM
Replying to Vincent Guerard
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In my experience a detail contract is the most use, regardless of countries. Local laws make a big difference in the way a detail contract is structured and the wording is key. Never forgetting where the contract will be interpreted in case of misunderstanding.
A detail contract become voluminous opening the door to contradictions. Often those will need to have a technical resolution.
In addition in the construction industry I've seem reference to norms that are contradictory.
A detail Contrat often become too complex, and contradictions become clear just at the execution phase.
thanks Vincent,
you are right, the contract is subjected to interpretation which could be different between the parts. the matter is to find the correct point where the contract is not too generalist and not too detailed. Both extremes could be dangerous. We need to include some details (in the same contract off course but through attachments and general conditions too). My experience suggest to focus the contract orientation toward to contract object performances instead to prescribe who the contract object should be "produced".
what do you think about my consideration? Saving Changes...