EG122: what is an Agile Contract

This week we have a guest.

I have switched places with Tudor Stanciu from Ventures'n'Law.

He wrote this piece.

My take on the same topic will be published in his newsletter.

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Contracts matter to you differently, depending on the business you are currently building.

The emphasis is on currently, because pivots, business or legal evolutions, and constraints will constantly change how much contracts matter to you.

Let’s take 3 variables: industry; what you offer; and stage of development.

Depending on the industry you’re active in, contracts matter to you differently.

Highly-regulated industries that require dealing with public authorities mean standardised RFPs, purchase procedures and adherence contracts.

Emerging industries mean you get to write your own contractual playbook or follow what incumbents are doing conventionally.

Depending on what you offer, contracts matter to you differently.

In e-commerce, you’ll operate using what the law asks you to do in relation to your customers, but also what your e-shop’s architecture allows you in terms of customer onboarding.

For a company building tech products, what matters is balancing between protecting your rights and assets, and managing to sell faster – especially if you’re funded by external investors that want to see growth.

Depending on the stage of development you’re at, contracts matter to you differently.

If you’re just starting off, you have to deal with variations of the same master contract: a shareholders’ agreement, company articles of incorporation, a mix of them or both.

If you’re already having recurring revenue, your client contracts need to reflect the things you want to optimize for your business: costs, revenue, both or something else.

Contrary to popular belief among many founders and managers of startups and SMEs, contracts are not immovable. They’re rather a mirror of what your business is currently doing, and evolve to match your expectations.

The agile contract is that which manages to both evolve with the business, and help it evolve.

It’s a combination of many boxes that need to be ticked:

• Standard clauses that should never be changed

• Commercial clauses that adapt depending on the reality of the sale you made

• A modular framework that allows departments to change things that relate to their own KPIs

• An autonomous character that allows managers to adapt the entire contract without seeking legal support at all times

• A simple language that gets the client convinced you were the right choice

The agile contract empowers the manager to be confident about using it.

It’s not a template, nor a document with a lot of legal verbose.