#10 Thoughts on Laws affecting purchasing contracts

#10 Thoughts on Laws affecting purchasing contracts
Posted on February 17, 2016 | Allan Cutler | Written on February 17, 2016
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Author's Note:

Author's Note:

Generally, the purpose of these posts is to inform the reader of major procurement issues while focusing on the public sector. Public sector procurement is very complex. To understand procurement in-depth requires detailed study and extensive experience.

Contract law is supposedly simple but as with all laws, they can be written poorly with unexpected consequences. Before further discussions of contract law take place, it is worthwhile to discuss what a law is.

A common and accepted definition of a law is a ‘body of rules generally accepted by the community as binding’. A community in this sense is the people that comprise a country, province (state) city or municipality. The region that passed the laws has the authority to enforce the laws and the people accept this (I.e. binding).

If everyone was honest, fair and acted appropriately in their personal and business dealings there would be no needs for laws. Laws develop as an attempt to codify the practices and expectation of a community and how the community expects to be governed. Unfortunately, with the creation of a law, also comes an unfortunate assumption. Since you don’t know who would be the offender, you need to assume that everyone is potentially crooked. In other words, the law covers everyone when people only need to be protected from a few individuals. A simple example is drivers licence. Everyone is required to have one to drive. 

Many of our laws are based on the rights of the individual or minority being protected from the rights of the majority. Laws are passed to limit the rights of the individual or against the minority. While a law may be created to protect members of the society, it may actually cause more damage than good. Minorities can claim, under the law, their rights are being violated even when they are not.

Past examples include women not having the right to vote (distant past). This illustrates a further problem with laws. Laws are relatively ‘static’. Community standards are prone to rapid change. In that regard, laws are good since they protect minorities against reactions to events by majorities. On the other hand, cultures in a societies change. The culture may be ready to accept the change but the law does not permit it. In the distant past, this was the situation with the right to vote for women. The society and culture had to change for acceptance before the law could be changed. The law was not changed until society was ready.    

But not all laws are ‘legal’. As verified by the Supreme Court of Canada, some laws passed by our Parliament are not valid. Unfortunately, we never know which ones until there is a Supreme Court challenge. This takes money, lots of money. Justice is almost a foreign word in western society. A person cannot afford justice. I have been known to refer to our Department of Justice as the Department of Legal Affairs. This is more realistic. A lawyer once told me that if I wanted to challenge the government, the government would win. For every $1 that I could spend, the government would spend $20. Further, if that wasn’t enough, the government would just spend more. He went further to state that even with a valid case; I would go bankrupt trying to pursue justice.

Still another problem with laws is the purpose for which they may be created. The rationale may be politically motivated. This means that they are self-serving to the party or people in power. The issue of gun control in our neighbouring country, the U.S.A., may be an example. There are powerful interest groups who wish to maintain ownership of guns as a ‘right’ of all Americans. Politicians receive financial and other support for maintaining this. We have a similar problem with our politicians but they represent smaller numbers and are easier to contact personally. In relation to guns, many people do not own a gun. It often appears that in Canada our major gun problem is caused by illegal guns coming from south of the border.    

A greater issue appears to be laws being poorly written. Having passed and been proclaimed, laws become embedded and are hard to change. A form of inertia sets in. The wording ends up having unexpected consequences. We have an Integrity Commissioner and federal whistleblowing legislation. However the legislation has so many exceptions of when the Commissioner cannot investigate, it leaves the Commissioner with reasons not to investigate. 

About The Author

With over 35 years of procurement experience, Allan Cutler consults with and assists firms in preparing proposals in response to competitive RFP. He understands procurement documents and negotiating with the public... More

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