As Adoranti (2006) explains, business to business and commercial contracts explicitly define the obligations of sellers and buyers. This includes the specifications of the contacted for products/services, their quality and time/place of delivery. The violation of contractual obligations, on either side, can be cause for the invalidation of the contract and grounds for the payment of financial penalties (Adoranti, 2006). As our organization's legal councilor emphasized, the binding form of contracts implies that it is incumbent upon the organization to ensure that a contract works in its favor and not against it. Hence, within the context of our organization, the policy is that no sales contract is signed prior to the formulation of an inter-departmental business plan which details how the organization will fulfill the contract and whether, indeed, it can. Only following a thorough review of this plan does the legal department authorize the signature of the contract.
The regulations which the legal department has imposed upon contractual commitments are an outcome of prior negative experiences. Two years ago an overenthusiastic sales department committed the company to the supply of more than it could produce within a specified time period. As the Sales Director had the authority to conclude contracts, the outcome was the overextension of corporate resources in a bid to satisfy its contractual obligations and, ultimately, a failure to meet the time of delivery, resulting in the imposition of fines upon the company. This incident, as the corporate legal councilor informed me, instigated a revision of corporate policy, whereby contracts could only be entered into following inter-departmental meetings and the formulation of business plans which outline strategies for the fulfillment of contractual obligations.
Contracts, however, do not represent the extent of the legal department's involvement in corporate and business processes and relations. Indeed, one of the department's primary concerns is employee relations, the implementation of corporate policy and the assurance of adherence. Insofar as the aforementioned is concerned, Poole (2004) identifies it as one of the more important of any corporate legal department's responsibilities, comparable to the implementation of law and order. As such, the legal department governs/supervises employee relations and ensures adherence to a specific code of conduct. This code of conduct extends to company-related behavior following the termination of the employee-employer relation. For example, in the event of an employee's dismissal for non performance of job related responsibilities, he/she is, as per the employment contract signed, warned against both defaming the company and exposing company business secrets. This, as the legal councilor advised me, was standard practice in most organizations but, without doubt, one of the more important of the legal department's responsibilities as it involved the safeguarding of the company from disgruntled former employees.
The protection of the company against defamation, not just by former employees but by competitors and the media consumes much of the legal depa