Why are contracts important?

I often write here in the blog about how important I think it is for certain industries to work on their professionalization and to work more with contracts. Be it streamers, influencers or esports teams. As a rule, this not only brings more money, but above all it brings more security. For many market participants, contracts are quite binding and it leads to less controversy.

In principle, this goes back to the great master Cicereo, who once wrote in “De Officiis”:

Fundamentum autem est iustitiae fides, id est dictorum conventorumque constantia et veritas.

This translates as follows

But the basis of justice is fidelity, i.e. the sincere standing up to promises and agreements.

This fits in with a statement made by my former civil law professor at university: “Contracts are for making agreements.” Even though contract is of course also derived from Latin, the word exists as a noun for the Middle High German verb sich vertragen and has been documented since the 14th century.

And indeed, I can say that my more than 10 years of experience as a lawyer, with a focus on contract design and contract negotiation, clearly shows that people are less arguing when there are contracts. However, it has to be said that this only applies if contracts are also designed professionally. The very problem that many contracts are to be regarded as GTC often overwhelms the creative skills of entrepreneurs or the self-employed.

And, I’m honest. Even if a lawyer costs money, after all, I also have to pay my bills from something, one should never underestimate how important professional contract design is also for one’s own self-image as an entrepreneur/self-employed. For example, if you assume streamers or esports teams, my experience is that sponsors and/or investors are much more open-minded and willing to enter into long-term and higher-end contracts, the more professional the sponsorship and/or the player contracts.

And IT service providers or software developers should not underestimate how important a professional impression can be with customers. Often, a well-made contract not only reduces the risk of defaults and ensures that self-employed persons as such, for example, by a complete presentation of the exact benefits and regulations in the event of defects. Professional handling also often ensures that follow-up contracts are received much more willingly.