For anyone who has ever sold a business or sought investment in it or had to report to a formal Board, they will know that everything is all about risk. Risk is inevitable and has to be managed and the contract is a part of a business’ risk management strategy. The legal aspects of contracts are often heavily negotiated, with those risks in mind.
When you’ve been asked to sign a contract with 10 minutes notice (seriously, it happens a lot!) or you’re under pressure to agree to changes made by the customer to get the contract over the line, the burden of saying no is immense. After all, who wants to be the one to hold up progress? Never mind that there is a sign off process issue in the business that needs to be addressed, that large businesses do not agree to changes last minute unless they really want to: because right here, right now the buck stops with you.
So, how do you know what is ok and what isn’t? How can you confidently sign and say yes it’s fine? More importantly, what are your reasons for saying no? It’s easy to say no if you are confident of your reasons, but with all this legal stuff, often the reason for not agreeing something is because you just don’t know. How do you communicate that to those wanting signature quickly?!
In our last few webinars we’ve addressed some of the issues non lawyers face in reading contracts. Apart from the boredom factor and back to school feeling, the main issue is that you don’t know what you don’t know. You don’t know what you’re looking for.
The first tip we gave was split the contract into two (i) commercial and (ii) legal. Even if you don’t outwardly feel it, the commercial bits of the contract are a bit easier to make decisions on: e.g. price, payment, what’s included/ excluded for the price etc. The difficulty comes with the legal stuff, how do you know what to look for? What is ok? What definitely isn’t and why not? Quite often with the legal provisions of a contract, it’s about what might be missing. (See silence is golden blog)
In our next webinar on Wednesday 17th November at 8:30am, Bloody Contracts and legal red flags to look out for, we go through some of the legal red flags that any business may consider when reviewing a contract including….liability, data protection and intellectual property. We’ll explain supplier and customer positions and how and why contracts are written like they are. We’ll also explain key omissions to look out for! Sign up for free today here.