Read the Fine Print

We sign legal agreements and contracts all the time.

Sometimes they are obvious–an apartment lease, an auto loan, a client contract.

Other times, they are a little ambiguous.

Do you use iTunes? Have you read the entire Terms and Conditions you agree to simply by using the program?

Contracts and legal agreements are written for the sole purpose of assigning legal rights to the individual or company that drafted the agreement (or liabilities to the other party). The individual or company writing the contract does not have your best interest in mind, rather they are looking out for theirs.

Read Agreements From Start to Finish

I was recently asked to speak at a reputable conference and after agreeing to the presentation details and compensation, they sent me a speaker agreement to sign and send back. I read the agreement from cover to cover, and realized that it essentially granted the company unlimited right to use a recording of the presentation in any way, forever. Further, it gave them the right to use my name, likeness (photo), voice, company logo and information, and biography in any promotional materials to market any use of the presentation, present or future.

By signing the contract, I would essentially be granting them the right to create any product or service from the recorded presentation, and use me and my company to sell it. Forever. I could be made to be a “spokesperson” for a product or service that could damage my personal brand, or my company’s brand.

Their attorney may have been including this section to protect the company, but it took away my rights in the process, and was unacceptable to me. If I had not thoroughly read and reread the agreement, I might have simply signed and
given the presentation.

The biggest mistake you can make when signing an agreement is not thoroughly reading and understanding the document. This may appear to be common sense, but many (if not most) people don’t fully understand the language in written contracts. If you have any questions about what a section or word means, it is up to you to figure it out.

Look up the phrase in a search engine, or look up words you don’t understand in the dictionary. Don’t simply rely on the company or their attorney to explain the section.

Hire an Attorney

A good attorney may be expensive, but they will make (and save) you far more money than they cost. They will pay for themselves time and time again. Think of an attorney as a valuable insurance policy.

If you don’t understand the language in a contract, you can’t rely on their attorney to help you. Their attorney is paid to represent them and them only. Only your attorney is legally obligated to give you advice in your own best interest.

I have had my attorney look over every major contract I have signed, and in almost every single case we have found clauses or entire sections that gave up my rights or assigned liability to me unnecessarily. In many agreements I’ve read, the problems weren’t as obvious as in the example above.

Several years ago our attorney found several clauses that needed to be addressed in a warehouse and office building lease, including one that made us responsible for all building repairs, instead of just repairs needed due to our negligence. It was a simple oversight, but could have cost us if a major repair was needed.

Request Changes

If you find a problem with a section of a contract, ask for it to be changed. Like your business relationship, in almost every situation contracts are negotiable. If the issue is minor, such as a simple omission or mistake, I will usually just email them and mention that my attorney recommends it be corrected before we sign.

For larger issues, such as entire clauses that need to be reworked or removed, I recommend having your attorney deal directly with their attorney. They can quickly
draft a new clause or entire contract that is agreeable to all parties involved. 

Don’t Get Stuck in a Bad Contract

If all else fails, walk away. If you can’t agree on the terms of the contract, don’t sign it. It is better to lose a potential client or job, or lose that great new office lease, than to open yourself up to liability. Signing a contract could open you up to liabilities that could cost you far more than you may realize.

If you have a good sense of humor and don’t mind foul language, check out this presentation by Mike Monteiro on
contracts with clients. It applies equally well to other legal agreements.

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  • Brannon

    I have a similar story. During my last year of school, I did an internship for a small, once person company (which shall remain nameless). Overall, the internship wasn’t too bad. I got paid well for an intern and I learned a lot. However, a lot of things made me uncomfortable about the internship. I didn’t like how the man operating the internship treated me sometimes, the way he interacted with his clients made me uncomfortable, sometimes he didn’t seem that concerned with making clients happy, and he had to delay paying me a few times because he didn’t have the money yet.

    I finished my internship and graduated from college. A few months later, I got a request from that same man I had interned with to possibly work for him. Remembering my past experience with him, I politely turned him down.

    A few months went by, and I was contacted again by this same man with a request for a small bit of contract work. Overall, the contract work wouldn’t have taken more than 8 to 15 hours, and I needed the money, so I agreed. After discussing what I would need from him and my timeline, we agreed to do the work. As sort of a small sidenote, the man (now basically a client) told me that he would be emailing me a contract that he would just need me to sign before we could work together. I read through the contract carefully, and discovered that by signing, I would be agreeing to essentially be available to work for him on anything at his discretion, full time and as I recall there was even a no compete clause. Essentially, by signing the contract I was agreeing to work for him. I showed the contract to an old contracts professor and he said that it looked to him like I would not only be agreeing to employment, but a kind of employment that would hurt me if I tried to get out of it later.

    I emailed the man who had sent me the contract back explaining to him that I was agreeing to do 8 hours of work for him and nothing more, and that I wouldn’t sign the contract he had sent me. He sent me back an email basically trying to convince me that it was just a standard contract that all of his contract workers signed. I told him politely that I wouldn’t sign it, but that I would do 8 hours of work for him. I informed him of what I would need from him to do the work, and that I wouldn’t start without the things I needed. It’s been two years now, and I’ve never heard back from him.

    I think that if I had signed that contract without carefully reading it, I could have been in real trouble. At least one of the parts of the contract included some kind of wording suggesting that I could actually be liable for ending my work relationship with him without enough notice. I was also responsible for doing all of the work he sent me on any project as long as the contract was active.

    It’s very important to read any contract someone sends you.

    • Brandon Eley

      Wow, great story… good thing you read it and didn’t sign that contract!

  • Ed

    This post comes at a very good time for me. I had read through my contract thoroughly, this just reinforces my resolve. Reading contracts through thoroughly is important – this one has a perpetual non-compete clause.

    I know people straight out of college just want work. However, you really need to be mindful of the future. Don’t hurt your mobility and don’t give your rights up – even if they say it’s standard and they won’t enforce it. I ask, why then include the clause?

    • Brandon Eley

      Thanks, glad to hear!