Recently, a client called for some advice on several "boilerplate" contracts for services and equipment he was contemplating acquiring. He told me he had been prompted to call by reading one of my prior newsletters on the subject (now here is someone well worth writing for!).
The client, Landmark Impressions, is a successful, 25 year+, full service commercial printing company. Landmark's President, Dana Wilson (who many of my readers have met at SBANE breakfasts), is a true veteran of the boilerplate wars and the other guys have the scars to prove it!
Thanks to numerous equipment leases, Dana is a good customer of all the copy machine companies. In fact, he's so successful with his newly discovered negotiating power (which consists of a "just say no" philosophy to rigid, ridiculous requirements), that he agreed to share a few tips with his colleagues in the entrepreneurial community:
First and foremost, read the bloody boilerplate! You will be amazed at what gets buried in the not-so-fine print.
Second, equipment leasing companies always ask for more collateral than is needed... and they just love those personal guarantees. This is where Dana employs his "just say no" strategy which, given his business track record, is most effective! (If you are a brand new business, with no track record or business credit history, these rules of the road will not apply.)
Third, beware of the paragraph towards the end of the boilerplate with the deceptively innocent name of "Jurisdiction." Do you realize that, if you make no changes, you have probably agreed to defend yourself or pursue a dispute in a state other than where you are located? A confident, successful entrepreneur like Dana would tell you "baloney"... cross that off, initial the change and move on!
Fourth, there is always a catchall paragraph which commits you to the entire unmodified boilerplate contract, unless you modify this paragraph as well. If you see wording that says "this is the entire document between the parties" or "the above terms represent all of the terms between the parties," do not... I repeat, do not... leave that little paragraph unmodified if you have actually made changes.
Add just a few words to reflect the true nature of the contract. Dana would recommend that you add "as modified" or "with noted changes." Then just initial it.
The end result of all this is that you'll have gotten rid of some of the "stuff" that boilerplate contracts include, without a lot of time or expense. Each boilerplate contract is slightly different, however, so the first of Dana's rules should always apply: read thoroughly.
One final word. If you get too much pushback from the other side, you might remind them that there are a lot of competitors out there, and ask them if they really want to negotiate these kinds of one-sided provisions. More often than not, you'll find a smart sales manager on the other end who recognizes boilerplate for what it is -- frequently unreasonable -- and who will make the choice to do business the old-fashioned way... reasonably.
Stand Up For Your (Contract) Rights - To learn more about this author, visit Marijo McCarthy's Website.
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