IT'S NOT THAT YOU SHOULD NEVER READ A CONTRACT 
Wednesday, June 17, 2015, 10:51 AM
Posted by Administrator
I have previously discussed the reality that people, especially lawyers, don't read contracts (lawyers read them for clients but, for normal day to day stuff, not for themselves). Yesterday, I read a contract...the whole thing.

The contract had to do with licensing a reservation system for our other business. The system would link up with that businesses' website and by clicking and checking boxes and entering credit card numbers, the customer would make a reservation without having to talk to anyone. The contract came to me by email and required "only" an electronic signature (which is exactly as binding as a signature scrawled out with a pen).

Today, the salesman called and I told him I wasn't going to sign. He asked why and I told him:
-Their system had me signing the contract personally (I had to think about it but I was asked to input my name and to check the "I agree" box...nothing about our company, so, it would be tough to argue I wasn't personally liable). If our company went broke over the system, that's one thing. But, I don't personally want to go broke over it (this is why the other company is a corporation....to shield us from personal liability).
-Any disagreements would be Arbitrated...no suing...except if there was suing to be done it would have to be in San Francisco, California.
(These "venue" provisions are common and, unless you've got the big bucks, it is awfully burdensome to fight it out in a courtroom 3,000 miles away. I have a venue story about my daughter's apartment lease at FSU but I'm waiting until the end of Summer to tell it.)
-The salesman told me the commission for their services would be added to the price of the reservation. The contract said it would come out of our company's share......and that we couldn't raise my price to cover it.
-We were also required to pay a "service fee"....whatever and in whatever amount that was.
-We would have to name the reservation company as an "additional insured" on our insurance policy, so, if they got sued because of something related to us, our insurer would have to hired lawyers to defend them. This is a common provision but I don't like bothering my insurance company (stay below the radar and rates seem to go up more slowly) and I was already unhappy with other provisions I'd read.

I am not saying that I shouldn't have just held my nose and "signed"; that we ever would have had a problem; or that we didn't just walk away from a goldmine of business. I believe that lawyers mess up more business deals than we help. Conservatism doesn't make money. To make money: Put all your eggs in one basket and hang on for the ride.

On the phone, this morning, after I told the salesman "I'm not going to sign." (he didn't understand last night's email which said "Never read a contract you would like to sign."), he asked me why. I told him my objections. He said, more or less "A lot of the contract has to do with _______________ software and not with what you are buying."

I had specific objections which his company was not going to change the contract to meet....and, frankly, what he was selling was nothing so fantastic that I was going to spend hours negotiating changes.

Really, all the salesman could do was dance.



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