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Commercial imperative: Difference between revisions
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Amwelladmin (talk | contribs) (Created page with "{{g}}The cold, hard facts of commercial reality which pervade everything about your relationship with your client, and which your client’s lawyer is certain not to understan...") |
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Let us call the value of that revenue “X”. You can value ex for any accounting period you like; obviously, the longer the period of the larger the value of X. There are three interesting variations of X: | Let us call the value of that revenue “X”. You can value ex for any accounting period you like; obviously, the longer the period of the larger the value of X. There are three interesting variations of X: | ||
*''Historical X''': The first is “Historical X”; the amount of revenue you have ''already'' earned from this {{t|contract}}. It will give you a comfy feeling, it may remind you of that chalet in France that you bought with it, and it may help project your expected revenue for the future, ''but for all other purposes Historical X is meaningless''. It is in the past. | *'''Historical X''': The first is “Historical X”; the amount of revenue you have ''already'' earned from this {{t|contract}}. It will give you a comfy feeling, it may remind you of that chalet in France that you bought with it, and it may help project your expected revenue for the future, ''but for all other purposes Historical X is meaningless''. It is in the past. | ||
*'''Current X''': “Current X” is the value of current and booked revenue on existing transactions and those ''that will arise during the non-fault [[notice period]]<ref>Being the earliest point at which your counterparty could freely terminate its obligations under the contract.</ref> of the contract'' . Think about this as “unbilled work in progress”. This is [[revenue]] you can safely say you ''will'' earn, but have not yet. It is exciting — almost tangible — but, compared with Historical X and Future X, it will amount to bugger-all. | *'''Current X''': “Current X” is the value of current and booked revenue on existing transactions and those ''that will arise during the non-fault [[notice period]]<ref>Being the earliest point at which your counterparty could freely terminate its obligations under the contract.</ref> of the contract'' . Think about this as “unbilled work in progress”. This is [[revenue]] you can safely say you ''will'' earn, but have not yet. It is exciting — almost tangible — but, compared with Historical X and Future X, it will amount to bugger-all. | ||
*'''Future X''': “Future X” is the revenue you can expect throughout the future life of the relationship, ''assuming you both remain solvent and on good terms''. As [[Criswell]] famously said, “we are all interested in the future, for that is where you and I are going to spend the rest of our lives.” This revenue is ''much'' less certain, and it is potentially ''huge''. This is the golden prize. This is what you should be focused on in every moment when you perform the {{t|contract}}. | *'''Future X''': “Future X” is the revenue you can expect throughout the future life of the relationship, ''assuming you both remain solvent and on good terms''. As [[Criswell]] famously said, “we are all interested in the future, for that is where you and I are going to spend the rest of our lives.” This revenue is ''much'' less certain, and it is potentially ''huge''. This is the golden prize. This is what you should be focused on in every moment when you perform the {{t|contract}}. | ||
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Why are you [[short an option]]? Because ''you are not entitled to Future X''. You have to persuade your client to give it to you. You cannot stop it terminating your contract if it so wishes. ''You should apply every fibre of your being to giving it no earthly reason to do so''. In a very real sense, your future prospects depend on the continued performance of your valuable contracts.<ref>Just what to do about [[stale contract]]s, and where the parties have fallen out of affection for each other, is a subject for another article, but in a nutshell, ''shut them down''. They are the tail end of the 80 in your [[80:20 rule|80:20]] rule.</ref> | Why are you [[short an option]]? Because ''you are not entitled to Future X''. You have to persuade your client to give it to you. You cannot stop it terminating your contract if it so wishes. ''You should apply every fibre of your being to giving it no earthly reason to do so''. In a very real sense, your future prospects depend on the continued performance of your valuable contracts.<ref>Just what to do about [[stale contract]]s, and where the parties have fallen out of affection for each other, is a subject for another article, but in a nutshell, ''shut them down''. They are the tail end of the 80 in your [[80:20 rule|80:20]] rule.</ref> | ||
===Legal risk=== | |||
At the start of your relationship, the value of the three types of X unknown. It is at this point that you had your counterparty will engage in that unedifying ritual known as contract negotiation. Here your respective lawyers will agonise four weeks on the potential import of the legal terms. “Does ''[[under]]'' really mean the same thing as ''[[In accordance with|pursuant to and in accordance with]]''?” This kind of thing. Arguing about it is all very tedious but those of a certain disposition seem to enjoy it. We write about them a lot on this site. | |||
{{ref}} | {{ref}} | ||