Survey of Arts Management

Course blog for American University PERF-570, Fall 2014

Are Exhaustive Contracts Really The Best Way?

Imagine for a moment that your close friend calls you up one night, and asks you to come help them change a tire in the rain. Would you go?

Now imagine that the same friend calls you up one night, asks you to help them change a tire in the rain, and offers to pay you $2 for your time. Now what do you think?

On this matter, Behavioral Economist Dan Ariely says “Complete contracts are inevitably imperfect. So what’s better: a complete contract that mutates goodwill into legal trickery, or an incomplete contract that rests on the understanding we share of appropriate and inappropriate behavior?” While there is a time and a place for nit-picky riders, and lengthy legal documents, sometimes simplicity is best. And sometimes incomplete contracts, or “handshake contracts” see the best outcome, according Ariely in his blog post In Praise of the Handshake. I would gamble to say our entire class is susceptible to being a control freak now and then (no, just me?). Its important to remember though, that detailed contracts are meant to account for all worst- case scenarios, and sometimes thats not the message that needs to be sent. Sometimes people just need the benefit of the doubt in order to produce their best work. Thoughts?

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One comment on “Are Exhaustive Contracts Really The Best Way?

  1. evanjsanderson
    October 28, 2014

    I really like the idea expressed in the blog, and it’s something that I thought about during our class. Particularly in the context of the arts, these multi-limbed and often incomprehensible contracts seem to commodify the whole process in a way that feels icky. The rider thing was funny, but if you think about it too much, the whole idea of it is a little unsettling: artists hiding tiny little caveats in the crevices of a big document to see how responsive the organization is. Shouldn’t there be a better way? However, the complicated legal contracts have actually been kind of nice in experience as an actor and playwright. There was a long, unfortunate period where actors were seen as lesser members of society, and playwrights no better. The legal contract, in all of it’s complexity, ensures certain rights and protection for an artist who might not have the power to exert agency over a particular contract. So it’s a difficult call – and in the end, I think both might be valid in different situations. A less complicated contract in situations of trust and long-term relationships, and a more complicated one for use otherwise.

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