It can be difficult to trust an organization unless you are dealing with people at the highest levels, because individuals in an organization can be overruled by people higher in the organization.
People come and go, so the people you are dealing with now may not be the same who will be making decisions in the future. And even people at the top of the organization have ups and downs in their power and influence. A contract offers continuity in the face of changes to organization.
Even when working with people you trust and who have the necessary freedom or authority to stand by their word, it can be helpful to write things down. The written word is an excellent tool for recording what two or more people have agreed to.
In my experience, there are seven points which belong in every contract:
Do you need to include the scope in the contract? Often it is present (and in the government contracts I have had the privilege of signing it was included by law), but fixing the contract in scope also renders scope inflexible. If possible, it is better to specify how you will manage the scope (e.g. product backlog, sprint contract), but operational details should be left to the project team.
Points 2 through 6 determine the playing rules for your project. If you get these points right, you will have the foundation for a good project. But what are the best rules? There are many different kinds of contract, from time and materials to fixed price, fixed scope.
The next chapter will look at widely used contract forms in detail, evaluating them against the criteria set out in the previous chapter.
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