Avtalsrätt.com – or avtalsratt.com – is about commercial contract law. Primarily, it is about commercial transactions. Although often used in the limited meaning Mergers & Acquisitions (M & A), the term “transactions” is not only limited to such contracts. In a broader sense, the term includes every business transaction, i.e. every sale or purchase, every consultancy agreement or other contract for the provision of a service, every rental or lease agreement as well as any other contract.
Mergers & Acquisitions often get a large part of the attention attributed to transactions. That is not surprising, since they often are comparatively spectacular and involve the owners of companies or at least the management at the highest level. It is, however, not rational that they also tend to get the largest part of all external resources, e.g. lawyers and other consultants, available to the business, since they –at least for most companies – only generate a fraction of all transaction value. Instead, almost all value is generated through ordinary, daily, reoccurring contracts related to the core business of companies.
I find it fascinating that all those ordinary contracts receive such a small part of the resources in terms of external competence provided to the business at large. And it is beside the point whether 99 per cent of all value is created with the aid of 1 per cent of such resources – and I believe that that estimate is not too far off – or if the ratio is slightly different. The greater part of all business – the greater part of all turn-over – is supported by a small fraction of the total resources that are used.
Most contracts divide values and risks between the parties in an inefficient way. That is especially true for standard term contracts. Almost as a rule, contracts place values and risks with the wrong party, i.e. with the party who has least benefit from the value or for whom the risk is more expensive to bear. The effect is that buyers have to pay unnecessarily high prices while sellers cannot benefit from the extra value that the higher price could give them. In that perspective, it is almost self evident that even a marginal improvement of common, everyday business contracts would generate great surplus value.
Avtalsrätt.com is primarily about all ordinary contracts through which sellers and purchasers handle enormous values every day. Its overriding goal is to be part in the process of making all those contracts more effective, primarily by distributing values and risks in a more efficient manner than today. I will, however – from time to time – also take the liberty to write about other related subjects that I find interesting.
Almost everything on avtalsrätt.com is relevant not only for common, everyday, contracts, but also for single contracts with higher value, regardless of whether they are for the sale of a company, turn-key projects, production and delivery of machines or other objects.