In a contracting world

25 Oct

Having left big company life about 10 years ago, you don’t realise at the time just how protected you are from the legal issues surrounding what you do.

The move to a small company has tought me a good few lessons, especially in this market which is still young and so tends to attract smaller companies who don’t always have the same motives as you. My advice is if a potential customer has a contract that looks pretty loose, they are doing it for a reason. I can almost guarantee that the reasons will be discussed about wanting to work flexibly and providing the best environment in which to support each other etc. The reality I have found is very different.

The reasons will become clear over time but the main point is you have something they want but can’t really afford, so the contract is loose and 6 months down the line when they hit you with a change of business plan, maybe from B2B to B2C, you are left feeling like you have been taken for a ride somewhat.

So make sure the contracts are tight. If there are customers you don’t want them to work with then make it explicit, if they described their business to you make it clear that this is in the contract, don’t get caught as we have by sneaky individuals who have an ulterior motive to doing business. The companies we have worked with in the past, and one current, need what we have but they don’t want to pay for it. The old saying goes if it’s too good to be true it probably is and woolly wording around usage, customers etc is a recipe for a broken customer relationship not too far down the road.

My advice, if the customer won’t define what they do contractually, in sufficient detail to make it obvious then don’t sign. it will turn out to be bad business. Avoid at all costs terms like ‘changes from time to time ‘ ‘reasonable endeavours’ ‘but not limited to’ all of these terms are intended to let one or other of the parties change their mind about what they do.

I’m in the middle of one of these at the moment. The customer has changed the way they work from B2B to B2C, is now in effect in competition with us, and is trying to force us to supply content to them to one of our existing manufacturer platforms. The contract clearly does not provide for this but because it’s woolly and because they need what we have they are trying it on with all the usual legal costs.

So be warned keep contracts tight and don’t be fooled by those who wish to deceive you 😉

Paul….

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