Tuesday, July 29, 2008

QuickTip: Beware of the Small Print in Vendor Contracts

When a business hires a vendor, most times the relationship goes well. However, it is important to know that many vendor agreements have language that could be harmful to your business in the event of a dispute. Allow yourself enough time to review the terms of your vendor's agreement before signing to avoid unforeseen problems in the future.

For example, we hired an interior designer whose form contract would have prevented us from using a paint treatment concept he suggested in any expansion of our office--something that seemed unreasonable to us.

A "form" or "standard" contract that is presented to you by a vendor will be prepared with the vendor's best interests in mind--not yours. You should never feel that you have to accept a vendor's contract as is; you can (and often must) request changes to it.

In our case, we asked if this restrictive language could be removed. Turns out the designer's attorney drafted the agreement and, until we pointed this restrictive clause out to him, the designer never considered the extent to which it would negatively affect a corporate client. He happily agreed to strike the clause.

Remember - more often than not the vendor wants your business just as much as you need the vendor. It is in everyone's best interests to bargain in good faith.

Be skeptical when you review a contract that you or your attorney didn't draft. Let the vendor know you wish to take the time to carefully read the contract, and that you won't be shy about requesting changes to the contract if need be.

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