I am sure it has happened to you before. You work hard on a client contract for you to use in your business. You consider all of the options. You think about what is fair and how you want things to run in your business.
- You make sure your contract protects you when you need it.
- You send a PDF for your client to sign.
- You include your contract discussions in your sales process.
But, there is always some client that marks through something and sends it back. So, what do you do? How do you handle the situation where your contract is being modified? You want the deal, but you also need to make sure your systems are working with your legal.
You explain. Then, if necessary, you compromise. At least, if it makes sense. One of the reasons clients like to work with small businesses is because they are flexible. The contracts can be changed a little. But, it needs to be within reason and it needs to be because it makes sense, not because the client didn’t understand something.
More importantly, you need to understand what is going and why certain provisions are important to you. Let’s talk about a few of the things that you need to avoid compromising on, at least without a good reason after we have discussed the potential ramifications.
Your contract should call for disputes to be brought (whether in Arbitration or Litigation) in your city. This is on purpose. Unless, you want to be forced to go to wherever your clients are for any dispute, you want to protect the forum selection clause in your contracts.
You want all of your forum clauses to be the same for all of your client contracts, so you know where you will be dealing with any disputes. They need to come to you. At least, that is standard. It is your call if you are willing to waive that.
Choice of Law
Your contract is drafted for your company based on the laws referenced in the Choice of Law clause. Your contract may not work under a different set of laws. If a client attempts to simply adjust what state’s laws apply to your contract, you should let them know that you cannot make that change because your contract was drafted with the laws in the choice of law clause in mind. A change in interpretative laws could create unforeseen issues in your contract. This is even more important than the Forum Selection Clause.
It is very common for clients (especially big ones) to try and remove any language regarding indemnification in your contract. Most likely, the language isn’t bad and, with a little explaining, the client will grow to understand why the language is included in the contract, but most of your potential clients have been told to watch for that word and avoid it at all costs. If you aren’t sure how to respond to a request to remove indemnification language from your contract, let me know and we can put together a proper response that should get your contract signed the way it is written.
You work hard on IP ownership language. It is fair to your clients. It works with your systems. It is what is best for you. It protects your work product and your business. If a client wants to change it, let’s talk about an appropriate response before you just change your contract. After all, that is why I am here.
Keep in mind, it may be necessary to adjust your contract if you receive requests to make identical changes regularly. But, any time you make a change for just one of your clients, you need to consider how that may impact your systems and whether the change is necessary. Many times a client will push back on a provision in a contract because they don’t understand it’s significance. Please, don’t hesitate to ask me to help you explain it to your clients. Most of the time, we can explain it in such a way that the client will see that it is fair and sign the contract without modification.
You work hard on your contracts. You work hard to make your contract fair. They work with your business. You don’t have to change it every time a client asks. Most of the time, with a little explanation your process will work the way it was designed.