Document risk: Difference between revisions
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The ordinary means of defending against document risk is, therefore, to treat contract negotiation as some kind of engagement with terrorists, or at least hostile foreign powers, and to leave absolutely nothing to chance. | The ordinary means of defending against document risk is, therefore, to treat contract negotiation as some kind of engagement with terrorists, or at least hostile foreign powers, and to leave absolutely nothing to chance. | ||
Of course, when you treat a customer like a criminal | Of course, when you treat a customer like a presumptive criminal, it will tend to behave like one — this is the lesson of the [https://en.wikipedia.org/wiki/Stanford_prison_experiment Stanford Prison Experiment] — as as a result commercial contracts look less like the exchange of lavender scented love-letters you would expect from long term partners in commerce, and more like downtown Beirut in 1976 just after a particularly vigorous shelling. | ||
Knowing one has a portfolio of such battle hardened contracts bestows great comfort on senior personnel in credit and legal that all bad things that might come to pass have been accommodated, and they will loudly declare to whomsoever may be listening on the Steerco that “it is imperative we have strong docs” | |||
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Revision as of 14:56, 1 March 2022
Document risk
/ˈdɒkjʊmənt rɪsk/ (n.)
The risk an organisation faces that loses money because of substandard legal contracts with its customers.
The ordinary means of defending against document risk is, therefore, to treat contract negotiation as some kind of engagement with terrorists, or at least hostile foreign powers, and to leave absolutely nothing to chance.
Of course, when you treat a customer like a presumptive criminal, it will tend to behave like one — this is the lesson of the Stanford Prison Experiment — as as a result commercial contracts look less like the exchange of lavender scented love-letters you would expect from long term partners in commerce, and more like downtown Beirut in 1976 just after a particularly vigorous shelling.
Knowing one has a portfolio of such battle hardened contracts bestows great comfort on senior personnel in credit and legal that all bad things that might come to pass have been accommodated, and they will loudly declare to whomsoever may be listening on the Steerco that “it is imperative we have strong docs”