Graceful Exits: Contractually Bound
By Bret A. Fausett
Just about every day in the sports section of any national newspaper, you can find a story about an athlete renegotiating a contract, holding out for more money, or demanding a trade. Sometimes the eight-year, multimillion-dollar contract doesn't look as good in year five as it did when it was signed. Other times, the athlete has had a phenomenal year and wants to be paid for his new value. The frequency with which this happens in sports could easily make you think it occurs all the time in other businesses.
The real world rarely works like the stories in the sports pages, though. No Web developer in her right mind would ever look at her latest designs, pronounce them the best work she had ever done, and demand a premium from the client before doing any more work on an existing project. Unilaterally deciding to "hold out" of your contract may be common in the sports world, but in the business world, it's known as a bad-faith breach of contract. Both parties must agree to change the terms of a contract.
However, it's sometimes possible to renegotiate a contract downward by the agreement of both parties. That means paying less than what you're contractually required to pay when a business arrangement isn't working out as originally contemplated. In sports, this would be the equivalent of telling your best pitcher that ticket sales are down and you'd like to pay him less money. You might get beaned for suggesting such a thing to an athlete, but in business, this happens from time to time, especially when the economy slows.<>
