In the absence of a negotiated contract, most companies will just place a purchase order which may or may not have terms and conditions attached to it. But did you know… that’s a contract! The only difference is that it is completely one sided and you haven’t had the chance to negotiate it.
Most people are initially scared of lawyers and legal fees to some extent and it’s important to note that not every transaction needs a negotiated contract nor will one be entertained. You don’t get to negotiate with Google on how they use your data. They state the terms of the relationship and you can accept them or not use the service.
There are 3 reasons why someone should have a contract in place:
1) The value of the transaction would substantially impact you if was unfavorable (ex. buying a house, but not a coffee)
2.) You are significant enough to the other partner that they wouldn’t want to lose you (a Tenant in an office building)
3) You expect to repeat the transaction at least 3 times
One of the ways we help keep legal fees in check is to prepare as much of the actual agreement or terms of the agreement as possible ourselves, and then have a legal team check the work. You can initially start with a “deal sheet” which is a bullet point list of how you want the relationship to work. IE I buy X in exchange for Y. This gives your attorney a blueprint for what you need and saves them time asking questions. As you get more experienced you’ll become more comfortable with legalese. You could draft the language of the agreement yourself, but we would encourage you to have a trusted attorney to review what you’ve created before you execute anything.
Izba can help you start, review, and negotiate your contract. Reach out today for a free audit!
