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Reviewing a Client Contract in 10 Minutes

Reviewing a Client Contract in 10 Minutes
Pat Dickson - Tue Mar 20, 2012 @ 07:53PM
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Let's assume you are a small company executive with no time to spare. You are taking a 10 minute break at an important customer sales meeting, a 100 page contract is in your hands, and at the end of this 10 minutes, you have to return with comments on the contract, work through them, and sign on the dotted line. If you don't, you lose the deal.

Let's further assume that 99 of these pages are legalese, and might as well be Latin, and you don't have an attorney available. 1 page you understand. It is the statement of work which describes what you are selling and how much you are being paid, when services/goods are to be provided and how you are to be paid for them. You've looked at this 1 pager a million times, and worked through it a million times with the customer. You know this statement is exactly what everyone wants.

The answer is to tear off the 1 page you know, put signature lines and a date at the bottom of it for you and your customer, and then write at the top:

"It is the understanding of the parties that this statement shall serve as a memorandum of understanding between the parties and upon execution below these terms set forth herein shall be binding. Furthermore, the parties shall endeavor to execute a corresponding written agreement within XX days."

This approach has worked for me on numerous occasions, and in fact, on many of these occasions the parties never got around to negotiating and signing the 100 pager. There was no need. Business usually proceeds as anticipated. The customer is satisfied and pays, and if there are disputes, you rarely get around to arguing legalese. You come up with compromises or business solutions which satisfy everyone. And of course, the greatest magic of all is that the 1 page memo you signed with the customer is a binding contract anyway. All you really need for a legally binding contract is a description of what goods/services you are selling, how many of each are being sold, and the price of each. Sometimes 1 page is all it takes.

Maybe the customer won't buy this approach, in which case you are going to have to make a business judgment with limited information. Such is the game!

Good luck!

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