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An exciting moment for any entrepreneur is reaching an agreement with regard to providing deliverables or services to a customer or receiving same from a vendor.  You have had discussions with your counterpart and exchanged a few emails to reach an “agreement”.  You are confident that you have negotiated a good deal and your counterpart assures you that if it does not work out, no worries.  But how best to get the deal you think you have negotiated?  Here are a few helpful pointers from the real world of contracting.


If the terms you think you agreed to are not in writing, in the event of a dispute, you (probably) lose.

  • Are all material terms in the written contract? Leave them out at your own peril.
  • Who drafts? Party drafting the document will have more control over the content of the contract.
  • Who signs? Must have authority to bind the party.
  • Where is the fully executed document? Easy to save appropriately, but if lost adds another hurdle to enforcing the contract.  If never signed, then a bigger problem.

“It must be enforceable, I found the contract on the Internet.”

  • Really?!?!
  • Avoid “recycling” documents.
  • Facts and circumstances change.
  • Laws and regulations change.

“It’s our standard form contract, we never revise it.”

  • Wrong!
  • Most “form” contracts are revised all the time.
  • Terms and conditions can be negotiated.
  • Side documents can memorialize a revision without harming the sacred “form”.
  • Need to consider relative negotiating leverage. Big v. small business.  Legal counsel can help your small business level the playing field.

“How does my company get out of this?”

  • Is there a termination clause? Easy to include in contract.  Without it, your company’s options are limited and expensive.
  • Is there an end date? Simple and helpful provision often overlooked.
  • What are the deliverables and have they been provided or performed and have they been accepted? Dispute likely if specs and acceptance procedure are unclear.
  • Who has breached first? May be a last ditch way for you to get out if other party has breached the contract first

“Why is my small business providing a line of credit to a Fortune 500 company?”

  • Because you agreed to it.
  • If you are a subcontractor, do not agree to payment after the prime contractor gets paid by its customer.

“The Customer never pays on time.”

  • Probably no late payment penalty in the contract…so why pay on time.
  • Know your customer.
  • Actually manage each customer account.
  • Be proactive at first slow payment.

Consult with an attorney… BEFORE YOU SIGN.

  • Helps you get the deal you think you are getting.
  • Helps avoid problems and expenses down the road.
  • Helps level the playing field with the other party.
  • Difficult to “un-ring the bell” once you sign.
  • Talking to an attorney at a dinner party doesn’t count unless its your attorney.