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.
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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