New kinds of agreements

• Author: Janelle Orsi
• Profession: Is the Director of the national nonprofit Sustainable Economies Law Center, and she is a 'sharing lawyer' in private law practice in Oakland, CA
• Pages: 95-149

95

CHAPTER THREE

NEW KINDS OF

AGREEMENTS

PART 1: AGREEMENTS AS THE BUILDING

BLOCKS OF A SHARING ECONOMY

Building an Economy with Agreements

Agreements are the bui lding blocks of a sharing economy. The shar-

ing economy will not, for the most par t, be brought to us by legislation

or by solutions developed for us by large organizations and businesses.

The sharing economy consists primarily of the millions of agreements

that individuals make to share, form organizations, work together, and

exchange with one another.

In many ways, this entire book is about agreements and the reg ula-

tions that govern them. The chapters t hat follow are about the agree-

ments we make to form organizations (Chapter 4), to exchange with

each other (Chapter 5), to invest resources in each other’s work (Chapter

6), to work together (Chapter 7), to provide for one another (Chapter

8), to share rights to land (Chapter 9), to share rights to intellectual

property (Chapter 10), and to manage the risks we share (Chapter 11).

Those chapters describe models for the formation of such agreements,

the unique challenges involved, and the regulations that govern t he

relationships that people create by agreement. This chapter examines

some of the basic components of agreements, best practices in negotiat-

ing and structuring t hem, and unique qualities of agreements we make

in the sharing economy.

Agr eements t ake many forms: t hey may b e quick not es we exch ange

via email, spoken comm itments, careful ly crafted and detai led

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96 | P  L   S  E

documents, and every thing in between. Agreements are also the tacit

and implicit understanding s we have about the way we interact and

transact wit h each other. As such, our lives already revolve around t he

making of agreements. A s lawyer/mediator Stewart Levine puts it:

We work and live in a “sea” (context) of agreements. You ca n view

your life as a series of agreements. A s you go through your day, try

viewing your l ife through the “lens of agreement.” From the moment

you wake up to the moment you go to sleep, your life is governed by

the set of expectat ions you have as a result of the explicit and implicit

agreements between you and others.1

In the sharing economy, many of the common and implicit agree-

ments of modern society will be replaced by new relationships that

we actively form to provide for ourselves and others. Think about the

implicit ag reement most of us cu rrently have wit h neighbors: we will a ll

live independently, purchase our own food, purchase our own goods,

and call on each other for help only when we are in a bind. We get what

we need by going to stores, where there is an implicit agreement that we

can select what we want off the shelf, stand in a checkout li ne, hand over

dollars, and leave with our chosen items.

The sharing economy essentially offers us a new resource for meet-

ing our needs: each other. This will bring us a much deeper involve-

ment with the agreements we make. Instead of shopping to meet all of

our needs, we will make ag reements to borrow, lend, share ownership,

collectively purchase, swap, barter, buy, sell, give, and receive from, to,

and with one another. We will have written agreements to share a car,

to sh are own ership o f housi ng, to bor row a rec reatio nal veh icle, to share

land for food growing, to share workspaces, and so on.

Agreements infuse a particular amount of certainty into our rela-

tionships. To the extent that the relationships of the sharing economy

are meant to provide for our basic needs, we need some amount of cer-

tainty. For example, we need to be certain that sharing does not expose

us to too much risk, we need to be certain that shared resources will be

there when we need them, and we need to be certain t hat our sharing

and cooperative arrangements can adapt when we need them to. We

1. S L, T B   A :  E  E  

G   R Y W 19 (Berrett-Koehler 20 02).

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New Kinds of Ag reements | 97

will all soon be swimming in a sea of agreements designed to provide

for us in new ways. As such, it is t ime that we all—sharing economy

lawyers and lay people alike —become more fluent, facile, and dare I say,

obsessed, with the sk ills of making agreements.

Agreements as Private Sharing Economy Laws

An important characteristic of agreements is that they are, in essence,

privately created laws that are often publicly enforceable. When we

exchange commitments w ith one another, each offering something of

value to the other, our laws, with some exceptions, generally say t hat

we have created a contract. If we do not carry t hrough on our commit-

ments to one another, parties that are har med can seek redress through

the court system. W hile most of what happens in the sharing economy

will never go to court, our agreements are nevertheless built on this

foundation. The solidity of contracts we make in the sharing economy

will ultimately be backed by the legal system.

At the same time, not all agreements are contracts. For example, an

agreement to give something w ithout receiving something in retur n is a

donative agreement, and it is generally not considered a contract. Such

an agreement is said to lack “consideration.” “Consideration,” by the

way, is an unfortunate word to use here because many non-lawyers do

not know its legal meaning, and because g iving somethi ng for nothing

is, in another sense of the word, a considerate thi ng to do. Never theless,

it’s important to acknowledge here that the th ings we provide for one

another in the spirit of generosity, nurtu ring, or gift economy are ulti-

mately enforced by social expectation, not by legal contract.

Furthermore, not all contract s are enforceable. For example, con-

tracts that contain illegal terms ca nnot be enforced.2 This is actually

quite common, since our legal sy stem dictates many of the terms of our

relationships, such as in areas of employment law, landlord/tenant law,

securities law, consumer protection, and so on. A s described throughout

this book, ma ny of the agreements we make in the sharing economy

put us in legal gray areas. Some of these agreements will eventually be

examined by the courts; until t hen, in some cases, we will on ly be able

to make educated guesses about their enforceability.

2. I n addition, cert ain contract s must be in writ ing in order to be enforc ed, such

as contract s for the transfer of land, or cont racts that cannot be ca rried out within one

year. See the statut e of frauds, which exist s both in common law and stat ute.

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