Doing business is about agreeing what you are going to do for your customer in exchange for their payment. An agreement is any understanding or arrangement reached between two or more parties. A contract is a specific type of agreement that, by its terms and elements, is legally binding and enforceable in a court of law. So why do we need contracts and agreements? Back in the “olden days,” there were few written business contracts. Many business and personal deals were done with a handshake. And, if there was a problem, the two parties could take the issue to a court, who would hear it even if the contract was not put into writing.
Today, although a verbal contract is still legal, most contracts are in writing. Contracts are very detailed these days, and every effort is made to make all possibilities clear. In addition to being clear, a contract must meet certain criteria to make sure it can be enforceable. A contract that is enforceable can be taken to court for a decision on a disputed item. If a contract does not have the essential ingredients, it is not enforceable.
Most contracts never see a courtroom and they could easily be verbal unless there is a specific reason for the contract to be in writing. But when something goes wrong, a written contract protects both parties. If one party to a valid (enforceable) contract believes the other party has broken the contract (the legal term is “breached”) the party being harmed can bring a lawsuit against the party who it believes has breached the contact.
Examples of Ethical Challenges in Contracting
The major challenges I have seen within the Independent Ethical Review Board during the 10+ years in which I continue to serve stem from contracting or lack of clear contracting.
The Coach with Multiple Hats
Some coaches play multiple roles. They are consultants, therapists, spiritual counselors and trainers as well as coaches. The lack of agreements or contracting around these multiple roles can cause ethical challenges for coaches. For example a coach was a spiritual counselor and engaged clients as a coach and then conducted spiritual counseling. The coach was associated with a religious institution, but employed independently as a coach. We can see the muddy waters here for the contracting party – coach or religious institution? As well as for the content of the relationship – counseling and advising or partnering in a coaching process?
The Bartering Coach
Some coaches my barter or trade coaching for other services. This can be a great way to play in the informal economy, however without clear agreements issues can occur. For example a coach bartered coaching hours for artwork. There was no clear agreement on “how much coaching” was equivalent to “what quality of artwork.” In this case there was resentment by both parties as the metrics for a fair trade were not agreed upon up front.
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