Conscious Contracts, also known as Values-based Contracts or Integrative Contracts, are a hot topic. I am asked to teach this topic more than any other and have taught it to law societies, corporate lawyers, big city,small town, and rural lawyers on four continents, so far. In this short piece, I’ll cover a brief overview of what they are. Entrepreneurs, corporate decision-makers, and lawyers may all find something in this piece.
This model of contract drafting ties in well with the Conscious Business movement and challenges a company’s integrity since this model requires that companies actually live by their declared purpose, mission, and values.
I am just one of the practitioners and trainers in this developing movement. There is no one right way to write Conscious Contracts, but I have my own favorite elements:
- Conscious Contracts are written in plain language. They’re meant for ease of use by the parties and stakeholders, not for judges or lawyers to interpret.
- The tone and content are relational. The goal of a conscious contract is to create a sustainable relationship to get some work done together. The goal isn’t to exploit the other, but to memorialize a trusted relationship. It isn’t a competition, but an alliance meant to benefit all the parties. The content and tone should reflect that.
- The parties start the process with a conversation about their purposes, values, principles, plus their hopes and dreams for the relationship. The values conversations are memorialized in the contract because they are important to the creation of the relationship. They don’t just cover Who, What, How, and When, but also Why?
- These contracts are not intended to be thrown in a drawer and pulled out when someone is angry. They’re working documents, more like constitutions that get amended when circumstances change.
- The parties then actually conduct their relationship in alignment with their stated purposes, values, and principles. Their goals are transparent. It is clear what each will get out of the relationship and what they’re willing to give. One lawyer pointed out that conscious contracts were tools for evolution.
- In many conventional contracts, conflict resolution is assumed to be a trial in front of a judge. Conscious Contracts contain a conflict engagement provision that ties back to the purposes, values, and principles. When change occurs or a conflict arises, it provides a structure for engaging in problem-solving, not arming for war. The focus is on preventing conflict and resolving those conflicts which arise as quickly as possible. After all, it is in the best interests of the parties and the contract if resources are focused on business, not conflict.
- Visuals and multisensory additions are welcome in the contract, especially if they help to clarify and generate understanding. (There is a whole movement building on the ideas of adding multi-sensory elements to contracts. Imagine a contract that is illustrated!)
- Conscious Contracts often take more time to negotiate, but they create more sustainable relationships with structures so everyone knows what to do when a dispute arises or something unexpected happens. That ultimately saves time and resources.
- Conscious Contracts are also unique to each transaction. They are for matters that are too important to trust to a form downloaded from the internet.
- Conscious Contracts are still based on solid legal principles. Each clause is carefully considered as to its necessity and relevance. While their intent is to avoid court, they’re still enforceable if the relationship totally breaks down and resolution is not possible. They include the elements that are required for this transaction without the pages of irrelevant paragraphs so often in the contract forms.
The concepts are not difficult, but the application may be challenging. Conventional lawyers are not generally trained in such holistic approaches. Integrative lawyers offer the broader perspectives necessary to blend the role of legal advisor and consultant.
Like the Conscious Business movement, these ideas are new and still developing. The approach requires a shift in mindset, toward a more conscious approach to business, and actual living true to the values, more than colorful, aspirational words on the lobby wall.