What is sustainable contracting?
Sustainable contracting is not so much about contracts related to sustainability, as it is about the sustainability of the contract and the process of contracting itself. A contract based on trust and cooperation is the basis for a lasting and positive relationship. It goes beyond risk management and profit maximisation. The emphasis is on cooperation, transparency and mutual trust. This approach creates stronger collaborations as well as more trust and clarity.
Contract law offers every opportunity to reach sustainable agreements, for example with customers, suppliers or distributors. Parties can decide how they want to interpret this. It does not matter if the service itself has no sustainability aspects: any company can contract sustainably! Realising a sustainable contract is relatively simple and easy to implement in business operations without having to make substantial changes. This makes sustainable contracting a good basis for any entrepreneur who wants to do business responsibly. Sustainable contracts promote innovation and help you find more creative and sustainable solutions. But how do you implement this as an entrepreneur? How do you make sure your contracts align with your sustainability goals? And that you build strong relationships with your contract partners?
That process is not straightforward. In any case, it starts with clearly formulating what you and your contracting parties want to achieve. The agreement sets out in an understandable and, of course, legally correct way what you want to do and how you will deal with changes and problems. This is not only about what exactly is in the contract, but also about the process by which the contract is created. In this, you carefully incorporate and integrate the interests and values of all parties. Transparency and dialogue between stakeholders is central to this.
Is sustainable contracting new?
Sustainable contracting in itself is not new. It is, however, a new approach of or view on contracting, brought over from the United States. In both the United States and the United Kingdom, where the legal system is based on common law, the emphasis is often on extensive written agreements that are less focused on the aims (intentions) of the parties than is the case in our Dutch legal system.
What is common law?
In the common law system, jurisprudence is seen as the main source of law. The system revolves around court decisions (jurisprudence) and previous rulings (precedents). Judges play a major role in the interpretation and development of law. Their decisions often serve as a source for new rules of law. When drafting contracts, parties clearly record as many details as possible, because judges usually interpret the content of a contract exactly as it is written down. This results in contracts often being very detailed.
Sustainable contracting is a counter-movement to this. Instead, it emphasises a shared vision. Central to this approach are the relationship between the parties, transparency and shared values. Instead of focusing only on legal details and risk management, sustainable contracting is about building strong and lasting relationships based on cooperation and mutual understanding. We can put those principles to good use in our Dutch legal system too.
In the Netherlands, we use the civil law system. The focus is on written laws drafted by the legislature, such as the Civil Code. This legislation contains many mandatory and additional rules that apply automatically to contracts, even if the parties do not explicitly include them in the contract. As a result, parties do not have to lay down every detail themselves, as the law already regulates many aspects. In addition, judges in civil law systems have more leeway to interpret contracts based on reasonableness and fairness and look at the intention of the parties.
The principles of sustainable contracting are:
