Do your contracts contain landmines?
Make Sure You Read All Your Contracts Carefully or Have Your Lawyer Read Them For You
Recently we have seen an increase in contracts that contain clauses that are not just “boiler plate,” they are extremely one-sided in favour of the service providers (business providing the goods and/or services to a business). As a business owner you do not need any surprises that result in additional costs or liabilities to your business. Protecting your business interests requires you to be diligent – to carefully read and understand all contracts you enter into, even the simplest ones that you may feel like you can take for granted. If you don’t have time yourself, it’s important to either ask your staff to review it and provide you with a summary and flag concerns or have your lawyer review it for you.
We have seen contracts that contain clauses with automatic renewals for multiple years at costs determined by the service provider – and there is no way to terminate the contract unless the service provider doesn’t provide the services in accordance with the contract. What you thought was a simple contract may now have you paying above market rates for multiple years with no way to get out of it without paying out that term.
We have also seen contracts that require businesses to obtain special and costly insurance to cover any claims made against the goods and services provider even if the provider is negligent. Now your insurance is required to pay claims for the goods and service providers’ mistakes. These are both recent examples of contracts that contained extremely one-sided clauses that were not read by the business owner. In each case there were other providers of those goods and services in the marketplace who don’t use one-sided clauses and charge market rates for their services.
Proper understanding of your contracts before you enter into them is the best insurance you can have. It will ensure you don’t have surprises that will cost you more time and money in the long run.
HSJ Lawyers can assist you with all your contract needs. Call us with your questions and concerns.
