Introduction

Note: The following systems-based analysis of contracts is based on the ideas presented in the Systems Theory of Truth.

Imagine you have two people, two departments, or even two distinct “systems.” They’ve come together to produce some kind of outcome—maybe launching a new product, finishing a joint project, or sharing resources efficiently.

Two things must happen for their collaboration to be truly successful:

1. They need a useful output, in other words, they should produce an end result that is genuinely beneficial and satisfactory for their customer.
2. They need to interact constructively, meaning that they should have a constructive working arrangement in which the output from each party combines in the optimal manner with the output from the other party, to produce the required result.

At first glance, these two points might seem separate: one focuses on the what (the result), and the other on the how (the working interaction). However, in reality, both these ideas are two sides of the same coin.

This is because:

The actual value add of the interaction occurs through the optimal combination of the output of each contributor.

It is exactly the synergy between all contributors that allows the creation of an output which is “greater than the sum of the parts” and which elevates the individual inputs.

For example, we can say:

• The successful interface between different company departments: (a) is the company, and, (b) allows the company to produce an efficient and good result.
• The correct interface between the different software modules: (a) is the software system, and, (b) allows the software system to provide the required services.
• The seamless interface between different healthcare providers: (a) is the healthcare system, and, (b) allows the healthcare system to deliver comprehensive and high-quality patient care.

Considering this idea, it becomes obvious that it is not enough to make sure each department or software module or healthcare provider is functioning as expected. Instead, it is additionally crucial to understand and implement fluid and efficient interfaces between all these moving parts to achieve the desired result.

The Interface and the Big Picture

As explained, when two people, departments, or systems collaborate, two key aims must be met for true success:

1. A useful output that genuinely benefits those who rely on that output (customers, other stakeholders, etc.).
2. A constructive interaction between the contributors, so that each party’s output can combine effectively.

But here’s the deeper question: Where do these two aims actually unify? The answer lies at the interface between the systems.

This is because the interface is a place that’s neither purely “System A” nor “System B,” but is rather a vantage point from which both sides’ contributions can be viewed together.

In other words, we can say that the “gestalt” (the bigger picture) must be understood at the interface and it is exactly this bigger picture that allows for the useful and constructive combination of all the individual contributions.

Why the ‘Gestalt’ Must Be Understood at the Interface

Gestalt is a term from psychology and philosophy often used to describe a “whole” that is more than (or at least different from) the sum of its parts. In our context, it means a bigger picture—a higher level of abstraction—where seemingly contradictory points of view can be reconciled.

This point can be understood as follows:

Each System Has Its Own “Primary Cause”

According to the Systems-Based Theory of Truth, any system—whether a department, a piece of software, or a whole organization—naturally defines the “primary cause” of success in terms of its own internal logic and corporeal specifics.

For example, a marketing department might say, “Our campaigns are the main driver for revenue,” while the sales team might say, “No, our direct outreach is what truly closes the deals.”

Both are internally correct, but from an external standpoint, they can clash.

Contradictions Fuse at a Higher Level of Abstraction

If each side stays locked within its own boundaries, you get a stalemate: “We’re the real reason for success; you’re just a prerequisite.” The only way to move beyond that impasse is to widen the lens—to stand in a broader “mind space” that acknowledges both sides’ truths equally without forcing one to be superior.

This broader vantage is essentially the gestalt, where all relevant perspectives belong to a “larger set of existence.” In other words, in order to perceive the gestalt, we need to ascend to a higher level of abstraction.

Practical Example: Two Contributors to a Software Launch

For example, let’s say that a software development team and a marketing department collaborate on a product launch. Each team sees their input as the primary cause of the product’s success:

• Software Team’s vantage: “The main cause of success is robust code and user-friendly features.”
• Marketing department’s vantage: “No product succeeds without strong brand messaging, user acquisition, and promotional strategy.”

If we only look from one vantage, we understate the other’s role. In order to view both team’s contributions side-by-side, we ascend to a higher level of abstraction and say that:

“Success emerges from the synergistic interplay between code quality and strategic marketing.”

In other words, we accept each vantage as correct in its domain (technical vs. promotional) and see that “truth” about the product’s success is the synthesis—the product flourishes because of the combination of both efforts.

• Thesis: “Robust software is essential.”
• Antithesis: “Effective marketing is essential.”
• Synthesis: “From the broader vantage of actual market adoption, a truly successful product arises when robust software and effective marketing converge to meet real customer demand.

In other words, the crucial factor is not just building technically sound software or publicizing it effectively in isolation, but ensuring that both align with user needs and motivations. Only then does the end-user actively choose to purchase and use the product—thus completing the loop within the larger system of value creation.”

This framing highlights that the abstract unifying perspective is the desire of customers to adopt the product. At this higher level, “success” is not merely “good code” plus “good marketing,” but their synergy in service of genuine market demand.

Formal Definition

As illustrated, when departments or subsystems converge at a higher level of abstraction, they are able to see that each contribution is indispensable, but nevertheless only part of the broader solution. The interface, which becomes the “locus of truth”, synthesizes both vantage points.

By stepping back and recognizing that the final goal—the “system event” or useful outcome—depends on weaving together each system’s “primary cause,” we ascend to that gestalt vantage where contradictions dissolve into real, practical synergy and the output of each contributor combines into a single, shared outcome that is greater than what either could achieve alone.

Stated formally we can say that:

The inversion of perspectives that each system naturally exhibits (seeing its own cause as primary, and the other system’s primary cause as merely a prerequisite) resolves at the system interface—the shared boundary where synergy must happen.

This interface is identical to the gestalt or abstracted vantage describing the whole event, because it is the sole vantage that encompasses both systems’ priorities simultaneously and measures them against the final criterion of success.

Contract Analysis

Following this train of thought leads us to the conclusion that a contract (of any type), must perform the following functions and contain the following definitions, in order to be practically applicable:

1. The contract must (either implicitly or explicitly) identify and define the higher level of abstraction, the big picture, which occurs at the interface between the two contributors or parties.
2. The contract must (either implicitly or explicitly) identify and define the contributions of each party or contributor.
3. The contract must identify and define how the individual contributions defined in (2), act in tandem to achieve the bigger picture defined in (1).

The more rigorously the contract defines the “big picture,” and the way in which each party’s contributions combine to facilitate the achievement of this desired abstract outcome, the less likely it is that misunderstandings will arise in the course of execution of the body of work defined by the contract.

Illustrating Contract Analysis in Different Scenarios

The following table demonstrates how the “Contract Analysis” framework applies to three broad examples. Each example shows how identifying the “big picture” (or gestalt) at the interface leads to a clearer contract (whether formal or informal) that defines contributions and aligns incentives.

Ultimately, the ‘contract’—in the broad sense—helps each party transcend its local logic and see how the combination of inputs produces a single, higher-level outcome.

This is the essence of creating a cohesive gestalt at the system interface.

Summary

Before drafting an agreement (and assigning responsibilities and rewards), the parties should examine what is really happening—i.e., how and why each party adds unique value in light of the higher-level abstract advantage that is gained by the combination of each party’s input.

This requires adopting a “larger vantage” that reconciles each system’s (party’s) internal logic about what counts as the “primary” value contribution. Only once we clarify these contrasting viewpoints (and see how both can be correct within their specific local domains) can we translate them into a contract that captures everyone’s actual “value-add” to the shared outcome.