Airport Business - 36

FBO MATTERS
AUTHOR Douglas Wilson

Contracts 101:

A Brief Field Guide for the Uninitiated

Learn to speak the language and understand what your lease contract entails.
IN BUSINESS, the consummation of a relationship
between parties is usually, if not always, in the form
of a contract. And, while legally binding contracts
can be implied simply based on the actions of two
parties, in its formal version, a contract takes
written form. This notion is almost universally
well-understood, regardless of industry.
Interestingly however, the act of
formalizing a written contract between
parties can send shivers down the spine
of even the most experienced business
managers. Why is distilling an offer, the
performance between parties, and the
terms of payment for goods or services
into written form so frightfully scary to
many?
The answer is the same reason
why few tend to perform surgery on
themselves: Because an entire profession
exists that specializes in providing exactly
that service. In the medical field, those
professionals all called doctors- or more
apt to this example, surgeons. In the field
of law by contrast, those professionals are
called attorneys.
Specialized f ields such as theseincluding aviation for that matter -
have their own language. And that is
what makes contracts utterly terrifying

ABOUT THE AUTHOR
DOUGLAS WILSON

Douglas Wilson is the president and
founder of FBO Partners, LLC, an aviation
consultancy providing business management advisory services to Fixed Base Operations (FBOs.). Wilson can be reached
at douglas.wilson@fbopartners.com

to some: If you don't speak
the language, you're bound to
make mistakes. And in business,
a mistake within a contract can
be costly. While it's good counsel
to leave the legal heavy lifting to
an attorney, I contend a business
manager abdicates one of the key
responsibilities of their role by leaving
the entire contracting process to their legal
department. Clearly a balance must be
struck, but how?
That balance may be achieved
th rough cont inuous lear n ing,
understanding the basics of contracts,
and following a tried-but-true process
that uses your legal counsel and other
professionals, wisely. We'll explore each
through the lens of a new FBO manager,
though the methodologies that follow are
applicable to literally any type of business
in any industry - aviation or otherwise.
First, if you're reading this, you've
already demonstrated a desire for
continuous learning. Moreover, you're
likely an aviation professional, which
means you already understand specific
aviation terminology and the regulatory
framework of the industry. This is
fundamentally important, and sets you
apart from most attorneys, who unless
specialized in aviation, do not. By
contrast, the attorney understands law,

36 \ AIRPORTBUSINESS / APRIL 2020

but not necessarily aviation. To close
your knowledge gap then, grab the
nearest contract, a cup of coffee and
start reading. I recommend starting by
reading your FBO's ground lease with
your airport - every single word of it,
plus the general terms and condition at
the end, including all amendments and
attachments. Ground leases set out the
operating rules for your FBO on airport,
and other contracts executed by your
FBO with its customers are subordinate
to your ground lease.
By reading contracts frequently, a
pattern will emerge that supports the
next step, understanding the basics of
contracts. Generically, contracts follow
a pattern, beginning with the recitals
which defines who the various parties.
Note the capitalization of certain wordsthose are defined terms. Defined terms
are used to make the interpretation of

Airport Business

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