202003.06
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Can a contractual relationship be a part of a sustainable development approach?

Every day, we are faced with our responsibility to respect our environment. This responsibility is all the more important for producers and entrepreneurs who must combine profitability, productivity and eco-responsibility! In general, companies must be part of a sustainable development approach if they want to progress in our current reality, which implies a global shift in the way of doing business.

The stakes are not trivial. The gradual scarcity of natural resources will plunge the economy into an unprecedented crisis if we do not change our linear economic model into a circular economy. The circular economy model is defined as a “[translated] production, exchange and consumption system aimed at optimizing the use of resources at all stages of the life cycle of a good or service, in a circular logic, while reducing the environmental footprint and contributing to the well-being of individuals and communities.”1

One of the possible solutions to this major shift is the service economy: the sale of the use of a good or service rather than the good itself. A relevant example of this business model is the strategy employed by Xerox, which sells service contracts to customers rather than printers. The customer pays for the use of the printer based on the number of copies made. At the end of a contract, Xerox repossesses its property and recycles most of its components. It is then able to offer more efficient products while greatly reducing the use of resources and raw materials.

A service economy implies a complete re-embedding of most of the spheres of the company, from production to customer service. This business practice highlights a new type of relationship between the supplier and the customer. Supply and demand are no longer solely based on the simple sale of a good, but more focused on customer needs while meeting the challenges relating to sustainable development. But, have entrepreneurs wishing to orient their practices towards a service economy sufficiently defined the challenges to be faced in this new customer-supplier relationship, based on the long-term and sustainability of the service?

By remaining the owner of its property, the company will have to face many situations which do not arise when the property is sold to the consumer. A harmonious relationship and an adequate use of the product require the development of service contracts adapted to the mutual needs of the company and the customer. An unsuitable or biased contractual relationship risks greatly damaging the business and the reputation of the company, even leading to its forfeiture.

Thus, all companies that are preparing, or that are already greatly engaged in their efforts towards a sustainable development of their economic activities, have every interest in surrounding themselves with experts in contractual matters, customer management and after-sales services. sale. Your business lawyer is ideal for advising and assisting you in your move towards an economy of functionality.

An article by Geneviève Bédard. Photo credit: Photo by Nikola Jovanovic on Unsplash

 1 (source : Pôle québécois de concertation sur l’économie circulaire). / https://www.recyc-quebec.gouv.qc.ca/entreprises-organismes/mieux-gerer/economie-circulaire