Contracts Versus Covenants – In Business, In Life

“If you do this, then I will do that.”  This is the basic language in most contracts. The problem with contracts is that if one party does not comply, then the other party is not obligated to comply either.

I call this a problem because a lot of people consider all their relationships contractual ones.  “If you do this, then I will do that.”  This type of arrangement rarely makes for strong or lasting business or personal relationships.

A covenant on the other hand states, “I will do this.”  Period.  End of story.  Regardless of what you do.   What if we treated our business relationships and our personal relationships as covenants instead of contracts? 

Covenants Depend On Me Alone

Covenants Depend On Me Alone

Don’t get me wrong, I understand that contracts are needed between people doing business together.  The legal protection a good contract affords is vital in business.

But, I believe there are some business relationships that do not require contracts.  Plus, I am confident that our personal relationships do not require contracts either.

Covenants – In Life

Marriage is a great example of a covenant relationship between two people.  The wedding vows we proclaim have no conditional statements attached.

  • I will love you and honor you as long as you do the same.
  • I will forsake all others as long as you do the same.

When I have counseled individuals and couples who are struggling in marriage, I often hear people speak like they entered a marriage contract.  In fact, when a wise friend counseled me about my marriage he called me out on my similar attitude.

About ten years into our marriage, I was complaining about how uneven the sacrifices were between my wife and I. He pointed to his Bible and said, “Grow up Dave.  You entered into a marriage covenant not a marriage contract.”

I look back now and realize how immature my complaining was.  But it is a slippery slope once we start keeping score in any relationship.

If how I act towards others is dependent on their actions first, then I am allowing someone else to control me.  I will be consistently inconsistent because my actions will always be dependent on other people.

I believe it is a reflection of my character if my actions are solely based on the values I hold dear.  If I act with integrity, honor, humility, and loyalty regardless of how others act towards me, then I am living in covenant relationship with them.  I am someone who can always be counted on.  I am someone who can be trusted no matter my circumstances.

Covenants – In Business

When one person enters into a business relationship with another, it is usually done with a contract.  As I stated earlier, these often provide wise legal protection for both parties.

However, when we discuss relationships inside the same business – boss to employee, employee to boss, peer to peer – covenant relationships should always be our goal.

Most companies claim certain values that determine HOW they will operate.  I have stated in other blogs that an organization’s character is made up of the demonstrated values of the people in the organization. (Read other blogs on Values)

In other words, the character of the organization is not determined by the values that the leadership claims, but by the values demonstrated by the people within that organization.  It is not just what they demonstrate with the customers, but also what they demonstrate with each other.

The values a company claims are not contracts.  HOW people in the organization act should not be dependent on the actions of their customers or their peers.

Imagine if these were the values discussed during new hire training or posted on a company’s website:

  • Integrityunless you don’t demonstrate integrity.
  • Teamworkunless you don’t demonstrate teamwork.
  • Serviceunless you don’t demonstrate service.
  • Respect - unless you don’t treat me with respect.

Yet in many business settings this is how people act toward each other.  They act like their values are conditional contracts instead of covenants.

If everyone in a company acted in line with the values the company claimed, regardless of the actions of others, the character of that organization would be unshakable.

The Bottom Line:

What if in business and in life, we treated all our relationships as covenants instead of contracts?  What type of workplace would we spend our days in?  What type of homes would we spend our nights and weekends in?

The more I think through the differences, the more I realize having covenant based relationships in business and in my personal life is a lot easier than having contracts.

With covenants, I don’t have to keep track of what the other person does or doesn’t do. With covenants I only have to worry about my own actions. 

With covenants my actions are wholly dependent on my convictions to my values and my discipline to live by them.  I am in control.

“I am going to do this.”  Period.  End of story.

If you could count on someone to treat all their relationships this way, would you trust them?  Would you want to do business with them?  Would you want to be friends with them?  Would you want them in your family?

Question:

What relationship have you been treating like a contract instead of a covenant?

2 Responses to “Contracts Versus Covenants – In Business, In Life”

  1. Garrett Miller March 11, 2014 at 8:53 am #

    Dave,
    A terrific reminder that when our character is at stake we must choose the right action because that is who we are. It is very much a part of the servant leadership you and your dad speak about. When we are serving, we are serving, regardless of the circumstances. Serving is best done when those who are receiving have no way of paying us back.
    Just serve.
    Garrett

    • Dave Anderson March 12, 2014 at 6:35 am #

      Great point. If I am only doing something to get something in return am I truly serving/leading?

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