Chipp,
Wise words, thanks. That is basically how I now have evolved into doing my own business. Get the agreement client or vendor hammered out first then, if necessary, the lawyer(s) tighten it up. Most of my bad experiences have been with the lawyers getting some terms from the client then trying to set up the deal and you are right this is where things go very bad.
Unfortunately, now most of the contracts I get from large sized clients are pretty much non negotiable in the boilerplate items. Most large companies/gov agencies have gotten pretty harsh on the free lancers this way. only thing that is customized is the scope of work and other things like reciprocal indemnification and such are just not allowed by the company lawyers. most of the language is pretty one sided for the company. the reply is pretty much take it as is or take off.
Sorry this has gotten off topic for the list, but it does seem to be useful concepts that many on the list must deal with in doing software development.
cheers,
jeff
On May 17, 2005, at 6:08 PM, [EMAIL PROTECTED] wrote:
I learned some valuable lessons at my last job.
1) Businesspeople should draw up the terms of an agreement.
Typically people try and get lawyers involved at first. This is wrong.
When you hear someone say, "I'll have my lawyer draw up a contract", you
should respond, "Let's first iron-out this deal between ourselves so we
know what it is we're agreeing to." Any good businessperson worth
his/her salt should be able to work out a term sheet w/out a lawyer
involved.
Send back and forth plain english terms so that it's clear to all
involved not only the terms, but also the intentions of the parties.
Remember: Try to keep lawyers out at this stage. Create a plain numbered
list of the terms and document it in a non-binding letter of agreement.
2) Have a lawyer (preferably your lawyer) draw up the terms in legalese BUT, (this is important) the lawyer should *never* add anything substantial to the contract that DID NOT exist in the original term sheet. Doing this is the same as 'negotiating in bad faith' and should be pointed out *immediately* to the other businessperson.
IOW, businesspeople draw up terms, lawyers only paper the deal. If their
lawyers try to become negotiators, then I respond with extreme dismay to
my counterpart as this is less than professional. If their lawyers
respond in some way as to force an issue, then go back to the term sheet
with the original parties and negotiate it there-- without lawyers.
Here's the reason why. Lawyers are professionals in understanding law
and businesspeople are not. To directly negotiate with a lawyer and the
legal words in a contract is putting yourself at an extreme disadvantage
as there are subtle wordings which mean somethiing entirely different to
a judge than what you may think.
If there's ever an issue with the contract, you can always go back to the term sheet and say, "this is what we agreed to, not what you have here." Also, the 'spirit' of the term sheet can be reflected in the document.
3) Assuming a term sheet is 'in play,' a good lawyer will never 'sour the deal.' A lawyers job is to protect his client, but also to not kill an existing business opportunity. If you find a lawyer who consistently 'kills deals', then fire him/her and find one who can help you close deals. This is true for Sales personnel, and others as well.
These were valuable lessons learned as CEO. They helped
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