You cannot make a good deal with a bad person.

Character is the real contract

This sounds simple until you're actually in the moment—when someone offers you something genuinely attractive, and you're trying to convince yourself their reputation doesn't matter. Maybe it's a business opportunity, a partnership, or even buying something from someone you instinctively don't trust. The appeal of the deal itself clouds your judgment, and you start negotiating details instead of listening to that quiet voice saying the person across the table isn't reliable.

What makes Buffett's point so practical is that he's not being moralistic. He's being strategic. A bad person doesn't necessarily cheat you on paper—they might hit every contractual obligation while still leaving you worse off. They'll find ways to undermine the spirit of an agreement, create friction, or simply make the whole arrangement exhausting. You end up spending energy managing the relationship instead of benefiting from it. The deal that looked good mathematically becomes a drain.

The real insight is that character isn't decoration. It's infrastructure. When someone has integrity, problems get solved collaboratively. When they don't, you're constantly watching your back, renegotiating, and explaining things that shouldn't need explaining. Sometimes the best deal you can make is the one you don't make at all.