Legal - Basic Legal
Ask Bob

Ask Bob About Contracts

?How can I determine what points are negotiable?

Perhaps you can find someone else in your industry who has previously negotiated with the firm in question. If not, you have two basic options. One is to make a formal proposal or counterproposal. The other is to have a more casual discussion. For example, you could say, “I’m used to having the the customer pay the freight,” or “For two-year service we add an additional fee,” and listen carefully to what the initial response is.

?How can I avoid going to court if a contract is broken?

The best way to avoid a court battle over a broken contract is to have specific remedies for specific, potential problems written right into the original contract. A cover for a potential delivery problem, for instance, might be, “The payment will be reduced by a certain amount for every day the delivery is late.” On another level, you can stipulate within the contract that the entire contract go into binding arbitration, not court, in the event of a dispute.

?Do I need to have my attorney read every contract?

After you have been in business for a period of time, you will begin to feel more confident in your ability to read contracts. Until then, however, I would have an attorney review every major contract and explain any passages or clauses in minor contracts that cause you difficulty.

?What should I watch out for in contracts?

Watch out for any items that are inserted into your contracts by any other parties involved. These items may significantly alter the meaning of the contract. This is not an isolated occurrence—it happens all the time. Often, but not always, it is done innocently. Nonetheless, you need to be on constant guard against this problem. Don’t sign anything that isn’t exactly what you thought you were agreeing to.