Random Thought #15 – Fair Contracts

When I was in my late twenties I produced a show in Las Vegas. When we were negotiating the contract, the owner of the casino said we wanted too much money. One of the requirements of the show was a 2 drink minimum, because I knew the Restaurant and Bar business and believed in the show, I came up with an idea that I was sure would work. Since I knew the cost of drinks in those days were about 15% of the gross I told him that I would be happy to take 30% of the take in the bar, leaving him 55% profit; he of course said yes because he wasn’t taking any chance at all.

The show was such a success that after 4 weeks we were called into his office. He told us we were making too much money and he wanted to go back to our original deal, but he would give us a little more than we asked for because the show was doing so well. Being so young and not so smart I said we have an iron clad contract, he apologized and said he would honor our deal.

The next day no bartenders showed up. When I called him up he said they were having a union problem and it would be worked out in a few days. Three days later, the bartenders showed up but there were no servers to take the orders. I called my lawyer in Los Angeles and he warned me not to close the show or I would be in breach of my contract. Like a dummy I kept the show open trying to work out the problems and finally ran out of money. I then proceeded to sue the casino with a Nevada lawyer, since my lawyer couldn’t practice there. That will be a story for another day.

The lesson I learned is when you make a deal, make it fair for both sides. If the deal is too good for you, the only thing the other person wants to do is to get even with you. In fact a few times in my life after a deal was in place for a few months and I saw that the other side deserved more, I called them up and changed the deal so it would be more fair for them.

The moral is simple. When you try to take advantage of people, they are going to spend a lot of time trying to get even at you. When you’re fair you can make a lot more money.

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