Form Contracts are the Beginning

Signing a Contract by Victor1558Last weekend, I went indoor rock climbing with my friends. It’s not uncommon for me to participate in activities that require signing a liability waiver. I think most people just sign them without reading it. My friends get a kick out watching me read every word and change the terms I disagree with. I respect that these companies want to protect themselves against liability. I accept that I participate in risky activities and as such I might get hurt, but if I get hurt because of their horrific negligence, I want to be able to get them to pay for my injuries that they caused.

The same ideas apply to businesses. A lot of businesses have form contracts that they use for providing services, creating intellectual property, and/or licensing you software or equipment.   I look as these as a jumping off point to begin negotiations.

Whoever writes a contract write the terms that best protect their interests. If a company hires the lawyer, the lawyer writes the best provisions for their client. They may not care about your interests at all. It’s your job to read these contracts carefully and propose the terms and conditions that work best for you. Lots of things may be open for negotiation such as

  • Payment rates,
  • Whether you’re licensing, renting, or purchasing software or equipment,
  • The length of the contract,
  • Whether you can end the contract early,
  • How disputes will be settled, and
  • If their creating intellectual property for your use, who owns it.

There are so many things that could be open to negotiation. It’s best to think of the worst-case scenarios and to protect your interests and assets if one occurs. There may be more than one way to address a potential problem; you and the other side can decide which way works best for the both of you.

If you’re given a form contract and you don’t like a provision, change it and see what the other side says. They may accept it. (Be sure to check with your lawyer so you know how to properly change the contract, or better yet, hire a lawyer to review your contracts before you sign them.) If the other side says they can’t accept an altered contract, ask to speak with someone who can or seriously consider doing business with someone else.  You don’t want to set yourself up to be screwed down the line.

The law generally holds you to the contracts you create, so think hard before signing your name.

In my personal life, I’ve changed contracts and the other side has accepted the changes without question. Sometimes they’ve come back and said they can’t accept it with the changes, and that opened the discussion about what they could accept. Sometimes I have to walk away from an offer if we couldn’t make a deal and sometimes I bind myself to the original contract provisions, but I always know what risks I’m taking and I try to set myself up to be protected.

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