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Posted on March 2, 2020
Updated on October 13, 2021

Contracting for Clarity

We define a contract as 'an openly made agreement to commit to a specific action or outcome, which involves all the people who will contribute to making it happen' (Mountain & Davidson, 2011).

Effective contracts are made when each individual is clear about:

  • What they are doing
  • Why they are doing it
  • Who else is involved
  • What their role and responsibilities are, and
  • When the tasks need to be completed

Physis will be directed when contracting is effective

Steiner outlined four requirements for contract making:

  1. Mutual consent
  2. Valid consideration
  3. Competency
  4. Lawful Object

Organisational contracts need to be clearly stated and be measurable, manageable and motivational. The difficulty is that one person’s motivation may be another’s demotivation. Therefore, clarity about who is the commissioning agent, who negotiates the day to day contracting process, and who is the client are all parts of the complexity when working with groups and organisations.

At the basic level there are three types of contract:


This deals with all the practical arrangements such as time, place, duration, fees, agreements between departments and agencies, confidentiality and its limits. It includes aspects of policy and legal administration, as well as monitoring and evaluation.


This deals with the focus and how the consultation/work being undertaken, will proceed. This is about competency and responsibility, goals and purpose as well as benefits and limitations.

When clients are not clear what they want then a preparatory contract to explore this will need to come first. The professional contract includes dealing with goals and tasks.

Berne defined treatment contracts as 'hard' or 'soft'. 

In a hard contract the goals are clearly defined in behavioural terms. For example, 'I will find myself a new job within six months'. 

Soft contracts are more subjective: 'We want to become the best company making widgets'. This does not state in which way they will be the 'best'. Soft contracts can be useful at the early stage of the relationship between perhaps the coach and coachee. The area of relationship cannot be forgotten whether working one to one or with the organisation.


This deals with the unspoken aspects of the contract. This is the unwritten set of expectations and obligations that are held between all employees of the organisation. In these terms 'obligations' are stronger than 'expectations' and if broken have deeper, more emotional reactions. 

Broken expectations can lead to disappointment, whilst broken obligations lead to anger and resentment. The psychological contract is more about process, and has a powerful influence on behaviour in organisations.

This is the same as the psychological level of communication, where the outcomes of the transactions are determined at the psychological level. When it appears as though the social level of communication is determining the outcome is may be because the social level is congruent with the psychological level. (Lankton, Lankton & Brown 1981)

We have been really good in TA of focusing on the contract but what we often miss is the initial contracting process i.e. before we even meet the person, where we get agreement prior to the meeting about what will exactly take place during the meeting.

What is:

  1. Purpose of the meeting
  2. Agenda and expectations
  3. Your agenda and expectations
  4. Time
  5. Outcome

Both you and the other person/people must agree to the outcome for each stage of the contract.

Levels of Contract

Some organisations may have a contract for 'care', whilst others may have one for 'social control'. Berne (1961: p160) talked about symptomatic control, symptomatic relief; transference cure; and script cure. How would this transfer to work with organisations?

Tudor (1997, ed. Sills p169) develops English’s (1975) work on the multi-handed contract. As the number of parties to the contract increases it becomes increasingly difficult to hold the complexity of the interrelationships. 

For example, a team leader might have a manager, a coach, a project group, be involved in training programmes and therefore have a relationship with a Consultant trainer and so on. These contracts are further complicated when the organisation is a local authority or a voluntary organisation. In this case there might also be relationships with Councillors, steering groups etc.

Tudor likens this complexity to the computing language of hypertext.  He diagrams the layers as hypertext boxes and places these boxes at different distances to represent the different levels or relationship between contractual parties.

Three Handed Relationships in GP Practice (Tudor (1997)


Multihanded Relationships in GP Practice (Tudor (1997)

Psychological Distance

Nelly Micholt highlights the need to be aware of the varying levels of closeness and distance between the different contractual parties.  

She builds on English’s work on the three-handed contract and diagrammatically outlines the different relationships between the parties to the contract.  

Micholt’s work is seminal in the organisational field as it ensures clarity of role and relationship enabling the development of awareness required before, during and after setting up the contract. This awareness leads to the greater engagement of the Mindful Mode and therefore fewer games.

Complexity & Problem Definition 

When contracting with organisations we need to consider what the problem is and who defines it.  Each part of the structure is likely to have a different perspective on what the problem actually is.  

For example, top management may see the problem as too much decentralisation as it is difficult to co-ordinate, whilst middle managers may experience the problem as too little decentralisation.  Therefore, working out what the focus will be and ensuring that the contract is outcome-focused is part of the complexity of working in organisations.

This complexity is very apparent when undertaking coaching and mentoring.  The traditional intra-organisational mentoring schemes, where the more experienced employees acted as mentors and role-models for newer recruits highlights a range of different aspects of contracting.

The more traditional mentoring role involved the psychological contract or obligation on the mentor. The mentor would be expected to 'groom' the new recruit in the ways of the organisation. This was, and sometimes still is, a hampering process for the organisation, and the mentors may not be challenging of organisational processes and systems. In contrast, the use of external coaches who are clear of any affiliations to the organisation can assist the coachee in their professional development, from which the organisation will inevitably benefit. They are also more likely to think “outside the box”, enabling greater flexibility and creativity.

One of the greatest difficulties for those working as consultants in organisations is the tension between being an outsider working within a system and the need for a secure base. Poelje, (1994), discusses the consultant’s need for affiliation and autonomy as well as the need for distance and objectivity. The ability to manage this process relies on the development of a secure base within oneself.

References and Further Reading

Berne, E. (1961). Transactional Analysis in Psychotherapy, New York.

Berne, E. (1966). Principles of Group Treatment, Grove Press.

English, F. (1975). The Three-Cornered Contract, TAJ, 5:4.

James, M. and Jongeward, D. (1985). Born to Win, Addison Wesley.

Lankton, S.R., Lankton C.H., and Brown, M. (1981). Psychological Level Communication in Transactional Analysis, TAJ 11:4.

Makin, P., Cooper, C. and Cox, C. (1996). Organisations and the Psychological Contract, BPS Books.

Micholt, N. (1992). Psychological Distance and Group Interventions, TAJ 22:4.

Mountain, A., and Davidson, C. (2011). Working Together, Organizational Transactional Analysis and Business Performance, Gower.

Poelje, V. S. (1994). 'Contracting for Organisational Change', in Transactional Analysis in Organizations, First Vol of selected articles 1974–1994, eds. Poelje and Steinert, ITAA.

Sandler, D. H. (2003). You Can’t Teach A Kid to Ride a Bike at a Seminar, Bay Head Publishing.

Sandler Training Professional Development Program Folder.

Steiner, C. (1974). Scripts People Live, Bantam Books.

Tudor, K. (1997). Contracts in Counselling, ed. Sills C, Sage.