“Standard Contracts” – do we need our attorney to review?
Rob Turner
Business Attorney and outside general counsel with InTown Legal; Of-Counsel with Blue Sky Law
Yes! You do need your attorney to review the contract.
Most of us have probably heard this from a vendor: “it’s just a standard contract, you should go ahead and sign it. There’s no need to slow this process down by having your attorney look at the contract.”
Even if standard (or sometimes called a form agreement) that does not mean there are not hidden ‘gotchas’ in the contract waiting for the unsuspecting party. How do you find and evaluate the risks with any contract? You have to read the contract – yes, the whole thing!
What happens if you sign a standard contract? Guess what: your business is now legally bound to those terms and conditions.
Why am I bringing this to your attention? If you haven’t read the standard contract, you might not have realized what your business agreed to. Here are just a few real world examples: exclusively use services from the vendor; agreed to a longer term for services, and agreed to pricey renewal terms that are not realistic for your business.
From my example above, the actual text of the of the exclusive services read like this: “during the term, [service provider] shall be [my client’s] exclusive provider of volunteer and guest screening services including without limitation verifications and motor vehicle and criminal background searches.” This presented a potentially costly problem for my client since they had been using another provider to use guest screening services at a cost lower than the new service provider. Once the contract was signed the new service provider – the one with the ‘exclusive’ text in their standard contract – began asking why they were not receiving all of my client’s business. Fortunately, we were able to reach an amicable solution with my client and the service provider, but the point is that the whole issue could have been avoided if the client had my team help them review the standard contract before signing it.
How do you avoid getting locked into unsuspecting contractual terms? It’s pretty simple: your business must have an attorney on ‘your side’ and looking out for your company’s best interests by reviewing all of the contracts for the company before they’re signed.
Many businesses and persons walk into unsuspecting traps by not reviewing a standard contract before they sign it. My perspective is that you should not sign a contract without first having your attorney review the agreement to help you understand and evaluate the potential implications to your business.
Make it a great rest of your week!
RHT3
Rob Turner is a partner at 360 Venture Law (Shmalo Turner), LLP, an Atlanta-based law firm with a broad range of commercial experience. 360 Venture Law (Shmalo Turner), LLP serves businesses and individuals as their "on-demand legal department" in a host of business and commercial real estate matters. www.360vlaw.com
LAWYERLY DISCLAIMER: this post should not be construed as legal advice; this is an advertisement.
Insurance Product & Compliance Consultant and General Counsel of Gateway Insurance Company
9 年The quicksand in legal agreements is usually a lot more subtle than the example included by the author. Unfortunately the excitement of getting into a new relationship to move your business forward can overshadow the common sense of having an attorney watch out for your interests. The reason I often hear for circumventing the legal review is that too many attorneys focus on the risks and then counsel the business client as to why not to do the deal, rather than finding the smartest way to make the deal happen and mitigate the risks.
President, Reading Realm/Babsy B; bestselling & award-winning children's author; oral language specialist; ed consultant
9 年Rob is my business' attorney. Like his work a lot!
Have lived the exclusivity contract scenario you played out; no fun for sure. Nice post!
Investigator and Security Expert at Multiple Companies including Nashville Blueline Security .Currently on assignment
9 年From a PI's stand point , yes one should have all reviewed !