Hobbes and the Source of Obligation
Thomas Hobbes understood that promises without the sword are merely words. In the state of nature, no one has reason to keep agreements—because no one can enforce them.
Civilization begins with institutions that make promises binding. Contract law is such an institution. It transforms words into obligations, intentions into claims, handshakes into enforceable judgments.
But law provides only the frame. You fill in the content—in the contract you sign. And that content will determine whether, in a dispute, you are the protected party or the helpless one.
The Contract as a Script for Conflict
Oliver Wendell Holmes, Jr., defined law as a prophecy of what courts will do. A contract is such a prophecy—a script written for the eventuality that cooperation ends.
As long as everything goes well, the contract lies in a drawer. No one reads it. The parties do what they agreed to verbally, adapting flexibly to circumstances.
When something goes wrong, the drawer opens. And then you discover what you actually signed. Whether the penalty clauses protect you or your counterparty. Whether the deadlines are realistic or impossible. Whether the definitions are precise or permit an interpretation that will destroy you.
A good contract is a script in which you prevail even in the worst act.
Information Asymmetry
George Akerlof received a Nobel Prize for his analysis of the “lemons” market—used cars, where the seller knows about defects and the buyer does not. Information asymmetry drives good cars from the market; only the wrecks remain.
Contract negotiations are a field of information asymmetries. Your counterparty knows more about themselves than you do. They know whether they intend to honor the terms. They know how they interpret clauses that you read differently. They know which points are critical to them and which are a smokescreen.
A lawyer at the negotiating table reduces asymmetry. They ask questions you would not ask yourself. They hear nuances you would miss. They recognize patterns from previous negotiations—because they have seen how similar contracts end.
Schelling and Focal Points
Thomas Schelling studied how people coordinate actions without communication. He discovered “focal points”—solutions that seem natural, obvious, default. When two people must meet in New York without agreeing on a place, both go to Grand Central Station.
Negotiation is the search for a focal point—a solution both parties recognize as fair. But the focal point is not given in advance. It can be shaped. Shifted. Established through framing, through the sequence of proposals, through anchoring.
Whoever makes the first proposal sets the anchor. Whoever controls the narrative controls the framing. Whoever understands the dynamics sees focal points where others see deadlock.
Clausewitz on Culmination
Clausewitz described the culminating point of attack—the moment when offensive forces reach their maximum and begin to weaken. After culmination, the attack loses momentum. Whoever fails to recognize this moment loses a war already won.
Negotiations have their own culminating points. There is a moment when your position is strongest—and after it, it begins to weaken. This might be the instant before signing, when the counterparty is already committed. It might be the moment after making an attractive offer, before competition appears.
Recognizing culmination is an art. Exploiting it is a craft. Missing it is an error that costs.
Anatomy of a Contract
Preamble. Why the parties are entering into this agreement. It seems ornamental—but when a court interprets ambiguous provisions, it reaches for the contract’s purpose. The preamble defines that purpose.
Definitions. Words have literal meaning and contractual meaning. “Product,” “service,” “force majeure,” “material breach”—all can be defined. Whoever controls the definitions controls interpretation.
Subject matter. What exactly one party is to do and the other to pay. The more precisely stated, the less room for dispute. The more vaguely, the more room for disappointment.
Terms. Price, deadlines, delivery method, acceptance procedure. Details that seem technical—until they prove decisive.
Liability. Who is responsible for what. Penalty clauses, liability caps, exclusions. Here you determine how much you can lose.
Dispute resolution. Ordinary court or arbitration. Which law. Which jurisdiction. Provisions that seem abstract—until you face a choice: fight on, or surrender because the forum is beyond your reach.
Final provisions. Amendments require written form. Invalidity of one provision does not affect the others. Annexes constitute an integral part. Nuances that save a contract when something goes wrong.
Fisher and Ury: Separate the People from the Problem
“Getting to Yes”—the classic of negotiation theory—opens with a principle: separate the people from the problem. Negotiate interests, not positions. Seek solutions that enlarge the pie rather than fighting over its division.
This sounds ideal. In practice, it can be difficult.
A counterparty who feels attacked stops listening. A partner who loses face torpedoes the agreement. A lawyer who pushes too hard wins a clause and loses the relationship.
A good negotiator knows when to be hard on substance and soft on form. When to concede on a trifle in order to win on the essence. When to be silent and when to speak.
What We Do
We draft contracts from scratch. Framework agreements, investment agreements, collaboration agreements, NDAs, leases, supply contracts, sales contracts—each tailored to the specific transaction, not copied from a template.
We review drafts. The counterparty has sent a contract for signature—we analyze what you are actually signing. We identify risks. We propose changes.
We negotiate on your behalf. At the table or through exchanges of drafts. As support or as front line. With precise instructions or with a flexible mandate.
We renegotiate existing contracts. Circumstances have changed, terms are no longer adequate—we help open the conversation and reach an amendment.
We resolve disputes without court. When the contract has already been breached but the relationship is worth saving—we seek a solution that allows both sides to exit with dignity.
Wittgenstein on Rules
Wittgenstein asked: what does it mean to follow a rule? A rule does not interpret itself. Every application requires judgment—does this case fall under the rule, or not?
A contract is a set of rules. But no contract interprets itself. Every provision requires translation into a concrete situation. Is this delay a “material breach”? Is this circumstance “force majeure”? Does this modification require “written form”?
A good contract minimizes the field of interpretation—but does not eliminate it. There is always space for judgment. And in that space, disputes unfold.
This is why precision has value. And why even a precise contract does not relieve you of thinking.
Parfit and the Future Self
Derek Parfit argued that your future self is, in a sense, a different person—someone you should consider, but whom you do not fully know.
A contract is an obligation to your future self and your future counterparty—persons who will live in circumstances you do not know today. The market will change. Needs will change. Relationships will change.
A good contract leaves room for the future. Adaptation clauses. Renegotiation procedures. Adjustment mechanisms. The possibility of exit when circumstances make cooperation impossible.
A contract that freezes everything cracks at the first change in temperature.
Taleb on the Fragility of Contracts
Nassim Taleb distinguished fragile, robust, and antifragile systems. Fragile systems break under pressure. Robust systems endure. Antifragile systems grow stronger.
Most contracts are fragile. One unforeseen scenario—and the entire structure collapses. Force majeure does not cover a pandemic. The penalty clause is so high it paralyzes enforcement. The exclusivity provision does not anticipate a change in business model.
An antifragile contract contains buffers. Margin for error in deadlines. Flexibility in definitions. Escalation procedures instead of automatic sanctions. Room for negotiation when reality proves different from assumptions.
Machiavelli on Alliances
Machiavelli warned against alliances with the stronger party: they win, not you. Even if the coalition is victorious, it is the stronger partner who reaps the fruit.
In commercial negotiations, asymmetry of power is a fact. A supplier negotiates with a retail chain. A startup negotiates with an investor. A subcontractor negotiates with a general contractor.
The weaker party need not lose—but must be smarter. Compensate for asymmetry of power with asymmetry of information. Know more about the law, about precedents, about options. Understand where the stronger party can yield without losing face.
A lawyer at the table is an equalization of chances. Not of power—but of competence.
In Closing: Aristotle on Useful Friendship
Aristotle divided friendship into three kinds: that based on pleasure, that based on utility, and that based on virtue. Only the third endures. The first two end when the benefit or pleasure ceases.
Most business relationships are friendships of utility—and there is nothing wrong with that. We collaborate as long as it serves us. We stop when it stops.
A contract is the framework of useful friendship. It specifies what each party contributes, what each receives, and how to part when the time comes. Without the framework, the relationship rests on hope. With it—on structure.
Hope is beautiful. Structure is more durable.
