Should you sign a Boilerplate Contract?

By October 2, 2015 Uncategorized No Comments

You have read the Boilerplate, perhaps. The Contract has statements that you do not understand. But isn’t it just a “standard boilerplate” Contract? Most of our clients say that they have thought nothing of putting their signatures to a Boilerplate Contract without any negotiations.  After all the business partner has everyone sign the same Contract.  Further, it is too much trouble to look for legal help. And legal help is expensive.

Fact1. Every contract is negotiable.
Companies put together Boilerplate Contracts in the hopes that the tiny print will dissuade the other party from a) reading the Contract, i.e., the print is too small or the document is too long, and b) negotiating the Contract, i.e., any changes to the Contract will take a very long time to be accepted. Inside Counsel does not like putting together an Addendum to the Contract. It makes the Contract “not standard.”

You need to have the Contract “written” to clearly reflect your business deal.
If the Boilerplate Contract has language that you do not understand, you need to schedule a call either with the other party’s lawyer or your lawyer to understand what the language means. You need to have the Contract “rewritten” so that you can understand it.
If the Boilerplate Contract has language that you do not like, you need to have it changed.

Fact2. Legal assistance is cheaper than you think.
Legal help in reading, explaining, re-wording and negotiating a Contract is cheaper when your lawyer is involved up front.  Again, you need to have the Contract “written” to clearly reflect your business deal.

The expenses arise when your lawyer has to “re-negotiate” or “litigate” an issue after you signed the Contract.

 

Seek Legal help immediately when you about to begin negotiations.  At the latest, when you obtain a Contract. All Contracts are negotiable. You should attempt to re-negotiate terms that you do not understand or are not beneficial to your business.  It does not matter whether you are working with a Global Company, the U.S. Government Sponsor, a Prime to the U.S. Government or a large Commercial Company. Your ability to negotiate the Contract will depend on how large a company you are doing business with. Even if you are unable to re-negotiate a term in the Contract, by seeking legal help you will be able to make an educated decision to accept the risk in the Contract and understand the ramifications of accepting that risk.

Remember, to retain a good working relationship with your business partner, your Contract needs to clearly reflect your business deal.

Please contact us at info@fedcontractsolutions.com if we can be of assistance.

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