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The Chinese ‘Contract’: In it for the Long Haul

Is a real estate career just a series of transactions strung together over a lifetime? Or is it a series of interpersonal relationships that form, dissolve and then reform again?

Credit: Casey Fleser

I came to this question reading the Negotiation (Amacom, 2013) book in The Brian Tracy Success Library. It’s basically just a pocket guide to one subsection of sales techniques, so I was combing through it for a review. That’s when I came to a subhead titled “The Chinese Contract.” This piqued the interest of my internal anthropologist. I could imagine that contracts would be envisioned differently in China than they are in the U.S. for a variety of reasons. But in what way would they be different?

I was somewhat surprised when I read Tracy’s explanation that Chinese contracts are more flexible, thorough, and durable than American ones:

In the Chinese mentality, everything that can be thought of or anticipated is written down. But there is a  clear understanding that, as the arrangement goes forward, new information will emerge and new situations will arise. This new information and these new situations will necessitate revising the contract so that it is still fair and equitable for both parties.

Later in the book, Tracy explains situations in which it is smarter to use the Chinese form of a contract:

If you are negotiating with another party with whom you intend to negotiate again and again over the years, the happiness of the other party should be an important concern of yours. Invite the other party to come back to you if the situation changes.

It makes sense. But it also seems a little too nebulous to be used as an actual “contract,” in legal terms, especially in our quite litigious business culture. Maybe it’s more of a relationship management tool? On the other hand, isn’t that constant give-and-take part of what makes negotiation an art?

So, maybe it’s not something to trot out when you’re trying to get a first-time buyer to sign an exclusive representation agreement. But what about people who have been loyal clients for many years? Or, if you’re a broker, would you try this next time your long-time top producer comes into the office to discuss a more favorable commission split?

Let me know what you think, or if you’ve had any experience with this type of contract negotiation, in the comment section below.

Meg White

Meg White is the multimedia web producer for REALTOR® Magazine and administrator of the magazine's Weekly Book Scan blog. Contact her at mwhite[at]realtors.org.

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Comments
  1. Scott Geller

    In the words of Arte Johnson, “Verrrrry interesting, but stupid!” (lol) http://youtu.be/XkFx3TaOunA

    Actually, we have the same advantage here in the U.S.A. – it is called the ADDENDUM. It is used when we wish to renegotiate or change the original terms of an agreement.

    Those in commercial real estate especially understand that negotiations never really end.

    The “Chinese Contract” is much like our own Constitution. Written with care and forethought, there are currently 27 amendments (from 1791 to 1992) and numerous new laws to keep it current.

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