The importance of sustainable contracting

As an entrepreneur, why spend extra time and energy on yet another contract? What's in it for you, and what assurances does a sustainable contract provide on top of a standard contract? There is indeed a difference between what is stipulated in a standard contract and in a durable contract. And yes, you definitely get benefits from this as an entrepreneur. How does that work exactly?

What security does a standard contract (not)offer?

The two main reasons for signing commercial/standard contracts are:

  1. The evidential function of a written agreement.
  2. The redistribution of risks compared to the distribution provided by law.

The purpose of this contract is to provide legal certainty and clarity in respect of the rights and obligations of the contracting parties. Often, this is not the only goal. The terms of a contract give the parties a practical guide on how to behave towards each other.

It is important in this context to know the aim (intention) of the parties and what exactly they agreed on. In practice, it appears that often contracts are not worded sufficiently specific, resulting in interpretational differences. A lack of legal understanding, unintentional deviation from the law and the use of standard clauses can also contribute to disputes arising.

What security does a sustainable contract offer?

Sustainable contracting goes beyond simply drafting a legally binding document. It ensures better contractual relationships and ultimately better results. It encourages a more collaborative, transparent and trusting way of doing business, where all parties involved respect and balance each other's interests and values. This leads to:

  1. Better communication.
  2. Clearer alignment of expectations.
  3. Fairer risk allocation.
  4. Effective problem solving.
  5. Better compliance with the agreement.

So all in all: the chance that fewer disputes will arise regarding the contract.

In addition, it is also about balancing the 3 p's: people, planet, profit. In addition to making a profit, obviously as an entrepreneur you also have regard for people, animals and the environment. This means paying attention to the impact on your environment in your business operations. Sustainable contracting can help you realise these (sustainable) ambitions.

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You immediately comply with European laws and regulations

The EU has launched a variety of legislative and policy initiatives to promote and regulate environmental, social, and governance (ESG) sustainability. These rules affect how you, as an entrepreneur, have to organise, report and account for your activities, products and services. By contracting sustainably, you as an entrepreneur meet the legal requirements and societal requirements to prepare for future developments.

You impress investors and stakeholders

As an entrepreneur, you are also increasingly judged by (potential) investors on your sustainability performance. The same goes for customers, employees and regulators. These stakeholders expect your company not only to make a profit, but also to take responsibility for your impact on society and the environment. By contracting sustainably, you show as a business owner that you take your sustainability goals seriously and are willing to work with business partners to achieve them. This can lead to a better reputation, higher customer satisfaction, less staff turnover and more appeal to investors.