The value of words and meaning of contracts or why big business will remain a Secret Society. Michael Burich Follow Sep 6, 2015 · Unlisted

As this post “goes to print” I’m owed 49 call backs, 15 dinner invitations (with drinks), a piano factory visit and a sit-down with Prince Albert himself. All of it just this year alone. 8 months to be exact and you can be sure I wont hold my breath.

Promises these days seem to be given out as a dash of seasoning to farewells and greetings. “Hey I have to run but, I’ll call you.” Will you? 50 call backs and counting. So what’s the cost of a promise these days? I wouldn’t value it at more than a price of a concert ticket. To a cover band, of course. Off season. Mid week. Back row. Past Deadline.

Let me take you back to the corner of 27. You see as my uncle was “raising” me to become a serious businessman, the topic of promises and contracts always came up (notice I didn’t use the word educated because I was educated in college and somehow this valuable lesson was never given). Green, fresh out of college I was convinced that business was pretty straight forward. You make a contract, make sure its followed and then you get rich. If it doesn’t work, you change washing powder, rewash and then you get rich. Or a hundred other combinations I was sure I could come up with all ending with me somehow getting rich. Except I didn’t. My uncle kept getting me to negotiate deals on my own, from my own name. Most of them failed. Not because of contracts…we never even got there. But because of me. Well not really because of me, but because they just didn’t know me. The never asked me to call them so that I could prove that I actually would. I’m sure if they did, they’d be impressed.

There is a real lesson here and it is one I promise you wont be taught in school. Before I get into it, let me say a few words about contracts. Contracts are necessary, scratch that, strong contracts are vital to be successful in business. Just two years ago I bought and changed all 100 beds in a hotel I run. After installation, I fought paying for them for over 2 years because the contractor just didn’t deliver on a simple clause in the contract. A basic handover paper which would transfer ownership from them to me and money from me to them. Two years they couldn’t get someone in their company to do a damn piece of paper properly. Two Years. I wasn’t in a rush, clearly the circumstances were to my advantage. Shockingly, they weren’t either. Maybe they were doing too well. A win win situation for one party it seemed. A deal I was very proud of. Of course such deals are only possible when you have a strong contract. When you do, use it fully. Squeeze. Hard. Never ever pay a dime before the contractor fulfilled their full obligation. Once you pay, they owe you nothing. A lessons within a lesson if you will.

As I said, contracts are important. But let’s get into the real lesson. I have sat across from my uncle and witnessed him negotiate expensive deals. Very expensive deals. You know how many contracts he signed? None. Understand this, there is a certain level in business which if you’re ever lucky to reach, works in a very old fashioned way. A Secret Society of gentlemen. A private club where good will and promises are currency. Backed by gold. Anything from large financing deals to sales/purchase agreements of multi million dollar properties. Yes, means yes and no means no. A simple theory, you’d think. Unfortunately, it’s almost extinct.

You see, no one asks twice in that circle. These people have earned their reputation years ago, mostly by keeping their promises. Today, they know each other by name and none of them would ever risk to devalue their word. There can be no inflation in this currency. It’s a membership that if you lose, you’re out. For Good.

The brutal honesty is that a contract, for members of this prestigious club, is simply a tool designed for their subordinates not to fuck up the deal. A guideline of rules set to make it easier for them to delegate. A vessel, carrying their vision, operated by us sailors. Contracts were there for me to make sure a deal went according to the blueprint. A blueprint agreed on over a 5-minute phone call between gentlemen. No ink. No paper.

Ironically, I loved contracts. Signing them often made me feel like I’ve achieved something. Like I mattered. Like I did something which influenced the outcome of the deal. How naïve.

Years later when I tried to make such deals myself, I was quickly reminded where I belonged. Better yet, where I didn’t. I had to sign papers everywhere. Financing requests, letters of intent, NDAs. Papers. Ink. All of it. I didn’t even need to check my membership status. My application was under review. Indefinitely.

Getting into that club is something I strive for. Something I value. Something I work for. I try to keep every single promise I make and only make those I can keep. I want my word to be currency, backed by gold, limited in circulation. I don’t season my greetings nor do I ever send dinner invitations without booking the restaurant. Yes, means yes, no means no. I wont let it die out.

I challenge you to try it. Make less promises and keep the ones you make. You will be taken a lot more seriously. Seriously!

Funny how standing out these days requires nothing more than basic manners. I’m a little scared that by the time I manage to get into this “secret society of gentlemen” there won’t be much of a society left. Honestly, I don’t think people my age give a shit. They invite for drinks they never have time for and say yes to everything because changing their mind costs them nothing. A facebook text. A free iMessage to tell you they’re sorry… No one values reputation. No one thinks of future consequences. Clearly, no one wants to become a member.

Well I do. I may have many years ahead of me but I’m hopeful. A club which is based on respect. A club where words have value without ink. A secret society of gentlemen where yes is yes and no is no. One day, I’ll get in. I promise

Until then, can you please sign this…

MB

@TheCornerOf27