It’s nice when you spot all the problems with a contract well before the job is supposed to start, but that doesn’t always happen.
What should you do when you spot issues with the contract right before you’re supposed to sign?
So I was talking to this corporate client for a one off design gig. The project manager and I talked a lot about what they needed and what I can and can’t do for them. I felt pretty good that we were on the same page for the job.
She sent over their standard contract just as I was leaving for a week-long conference and a quick side trip to visit some friends in Boston. Long story short, I forgot that I hadn’t signed the contract until I got an email from her the other day asking me to return it ASAP. We’re scheduled to begin work next Wednesday.
I was about to just sign the contract and return it but decided to skim it just in case. The contract and the Statement of Work are different from what I thought we’d agreed to. There are some liability promises that would bankrupt me if they ever came to fruition, but worse, the SOW lists a lot more work than we’d originally discussed.
What do I do? I feel bad because I didn’t look at the contract earlier, but I don’t want to agree to a contract I know is wrong.
I feel your pain. When I negotiated software contracts, more than once I had a client bring me a 20+ page software license and say, “Hey, I know we aren’t supposed to do this without you, but we’ve negotiated the purchase of $100K+ of software. I’d like you to look at the contract real quick. By the way, the price is only good until close of business tomorrow. After that it doubles.”
Inevitably there would be something wrong with the contract and a mad dash to try and fix it would ensue.
What I always did in these situations was be honest about what I could and couldn’t do: I could make sure that we understood the risks we ended up taking on and I couldn’t make the deal perfect.
The contract that you end up signing won’t be perfect.
But you can make it as good as it can be, given your time constraints.
One thing to understand: contracts are made up of two basic types of terms. Legal terms and business terms.
Legal terms are those terms that explain how the parties are related and how they’ll interact with one another in legal situations. These terms are things like who will be responsible if a third-party sues and whether you are the original creator of the work you’re providing them.
Business terms are those that detail how the parties will work with one another. Things like how much they’ll pay you, what work you’ll do and when it will be due.
When you’re in a time crunch it’s a lot easier to change business terms than it is to change legal terms. Generally speaking, the people that you’ll be working with can make calls on business terms; they’ll need their lawyers to get approval on legal term changes.
This doesn’t mean that you can’t or shouldn’t ask for changes to legal terms when time is running out, it just means you’ll have to be more precise in what you ask for.
First things first: call the project manager and cop to the fact that you’ve just recently realized there are some concerns with the contract. Since you already have a good working relationship with her, ask her for her help and advice on how best to handle the situation.
It’s easy to forget, but in situations like this you aren’t the only person with an interest in the contract going through. The project manager, and likely a number of other people at the company, are also anxious to get the contract out of the way so they can move on with the job. Recognizing that shared interest and asking for their help in figuring out this shared problem is the right place to start.
Next: verify that the business terms in the contract are accurate.
By which I mean, they are the terms your client meant to include. Sometimes things get lost in translation or SOWs get re-purposed but not closely edited.
If they are accurate, then you need to let the PM know where you think the miscommunication is.
“Joanne, based on our earlier conversations I understood that X, Y, and Z were all part of the job but I didn’t realize you’d need A, B or C. Usually, I’d charge $XXXX for that kind of work.”
Then, offer different solutions of how you can incorporate the extra work, either by increasing the price of the job or rearranging how the work is performed or delivered. If incorporating the work will blow the timeline or you aren’t the right person for the job, let her know that.
For legal issues, it’s best if you can talk to a lawyer to really understand the risk you’re taking on. A lawyer can help you not only understand the risk but also what you might be able to do to mitigate that risk.
Legal terms can have serious ramifications, if they come into play. You won’t be able to really determine what the potential risk of a legal term without understanding when and how it might come into play. A lawyer is in the best position to help you figure that out.
If you can’t talk to a lawyer, tell the project manager your concerns and ask her what the best way is to request the changes you’d like. She’ll be in the best position to know how to move something quickly through their attorney’s office and what steps you can take to make sure your requests are properly reviewed. Don’t be afraid to ask how common it is for the company to agree to changes to the sections you’re concerned by.
Based on what she tells you, decide what’s most important for you to address.
Ask for everything you want, but prioritize what you need. You likely won’t be able to get everything (though you might!) and having things that are of a lower priority will give you something to deal with in the negotiation.
Have you ever been in a situation like this? What did you do to deal with the situation?
Featured image by hellojenuine. via Flickr.com.