after-you-signavoid-headachesblood-pressure-monitorbody-armour-for-businessescloud-saas-ecommercecontract-checklistcontract-claritycontract-precisioncontract-review-slipupscontract-reviews-business-mancontract-reviewscontract-to-sign-markcorrosive-warningdata-protection-checksevenly-balanced-contractsexit-strategiesiconfinder_home_umbrella_protection_459608leaking-pipepoker-chipspress-the-buttonprotect-businessprotect-from-harmrisk-exposure-new-businesstermination-or-leashthermometer-commercially-soundtrain-at-speed

Iron out the legal issues before you sign

Protect your business. Clear up uncertainties before getting legally bound

contract-reviews-for-businesses
  • Rid your business of the sting in contracts before you sign
  • Steer clear of legal provisions that would put you where you don't want to be
  • Make sure you have clear exit strategy to get out if the contract sours
  • position your business to handle negotiations from a position of strength

Sometimes businesses are put under pressure – even coerced – to sign business agreements within a short space of time. Sometimes the contracts are long-winded. If you’ve never been in the situation before or do not know what you need to focus on, it's stressful.

Contract Snowblindness

We've read our fair share of long and complex contracts. We sometimes find that although our client has read it before they have sent it to us, important provisions which work against them have been missed or misunderstood. These same clauses (to us) have a clear meaning that work against them.

We call this "contract snowblindness".

There is so much to take in that you can’t process all of it. Sometimes the problem is that you can’t extract some of that meaning into a general overall picture. Sometimes it is because you get stuck on the meaning of individual words and phrases.

Then, you may be getting the "how are they trying to get one over on me" feeling.

 

How does contract snowblindness happen?

There were these keen developers that had spent years developing software based on open source code and libraries shake up the insurance industry. It was built on open source software. They found some interested investors.

In came the 40-page contract from the investors. They were told they had to return it with comments in 7 days. The draft prevented use of open source software. They could not use the code to compete with the company. Ever. It would have been a disaster from the moment they signed the contract. Contract snowblindness.

You've got too much unfamiliar material to review within a short space of time.

Changing Relationships

You may have a great commercial relationship with your counterpart. You may be thinking that the legal relationship proposed in a contract will reflect that.

What if it doesn’t?

What if the person representing your counterpart changes?

Will you have the same relationship with the new offsider as you did with their predecessor? What if after the partner starts a cost-cutting exercise after the contract is signed? Will the contract allow you to become a casualty?

Contracts not as they seem to be

contract-reviews-roller-coaster

Once we were asked by a client in the IT industry to advise on a contract before it was signed. The company had invested 100s of 1,000s of Pounds to develop a software application in the energy sector. The company wanted to license it as a service.

The search for investors was long and hard. Suddenly a breakthrough came. Interest in a joint venture. The commercial relationship between the businesses was promising. An excellent start. The investor sent through a 3-page contract headed something like "Strategic Partnership Agreement" to set up the confidentiality of the discussions to be had.

The problem was, buried deep in a long paragraph was a simple statement. The "investor" would have owned all of the intellectual property rights in the software the moment the contract was signed.

It happens.

And there are others. The limitations of liability can be so tight that they take enforcement of your rights too risky. They may be overlooked at the time, because they seem "fair enough".

Often, they're not meant to be. 

The termination clauses which only go one-way, and not your way. Indemnities loaded in favour of one party – and it is not you. The service levels which can only benefit the other guy.

Once you find out what they really mean, you look at the draft contract in a different way. It shouldn't be that way. It is avoidable.

Is this the right contract for your business?

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What concerns should you have in contracts before you sign them? What you should be looking out for?

It’s hard to know what to look for when contracts are filled with legal jargon, interrelating clauses, complex defined meanings, references to legislation you only have a vague idea about, with all the uncertainty of how the relationship will pan out over time.

Businesses are confronted by a long list of questions before signing an important contract:

  • Will the contract do what has been agreed commercially, or something else?
  • Does it set up the legal obligations that are expected
  • Will you be able to deliver the deal that it sets up?
  • Will it impose liability for risk for events that are outside of my control?
  • Who owns the data/personal data/intellectual property? Is the business covered from that point of view?
  • What about data, source code, and inventions created after the contract is signed? What about after the contract ends?
  • Will the contract prevent you from working with anyone in the future, and is there a way around it?
  • How does the GDPR affect what you need to do?
 

What about Exit Strategies?

getting-out-of-contracts

As hard as it may be to think about, if the relationship sours, if they get nasty for whatever reason, if the work environment becomes too difficult to work in and you have got to get out, what does the contract allow you to do and what can't you do?

How do you do to guard against that? What happens if the management changes and the tone of the relationship changes with it, and it all goes wrong? How do you get out?

Knowing the right balance sets you up in negotiations with better chance of a good result. It is one thing not know what you are doing because you have not done it before, it is quite another thing to take a wrong turn in negotiations and putting it beyond doubt in the minds of the people you are negotiating with. Easy prey. Some of the questions you may be asking yourself early on might include:

Is it commercially sound?
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  • Will the contract do what has been agreed commercially?
  • How does it work if […] happens?
  • Will my business be prevented from working with others in the future?
  • Is exclusivity really necessary – is this in my best interests? Does exclusivity mean what I think it means in this context?
  • How well balanced are legal rights and obligations – or not?
  • Am I going to have problems getting paid or get short-changed? What can interfere with my revenue stream? What if they delay without good reason?
  • That broad language which seems to lack meaning – does that do what I think it does? Hang on, why is it there anyway?
  • On a costs/benefit/risk analysis, is this going to be worth it?
New Businesses
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  • Does the contract take broader liberties because they think that you will not read the contract, and if you do read it, not understand the legal consequences?
  • Have they included things in the contract that you wouldn’t be proud of if you included them yourself?
  • What’s my exposure to damages, penalties and fines? Is that limited somehow?
What's my exposure to risk?
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  • Do the warranties I am giving go beyond what you need to?
  • Is my liability limited in a way that is suited to my business?
  • Do you really need to agree to that? What are the alternatives?
  • When do the indemnities actually bite? Are they practical for your situation?
  • What happens if you give warranties that aren’t true?
  • Where are the traps? Am I going to get … ?
Cloud based Services
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  • What happens if the service fails? How bad can bad get?
  • Who pays in the event of data loss?
  • Does this contract provide for everything that it should? Does it go overboard?
  • Is there anything missing in this contract that should be in there?
Managing Intellectual Property
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  • What happens to the intellectual property after I sign the contract? What about the data that is created while the services are supplied?
  • Who owns the data/software/asset in the content at the end of the contract? Will I be able to use it?
  • When does the intellectual property indemnity become enforceable? Is there anything I can do that will limit my liability?
  • Do they actually have the intellectual property rights they say they do?
What if it all goes wrong?
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  • How long am I locked in for? Do I want that?
  • What happens if they substandard or unreliable?
  • How do these service levels really work in practice?
  • Is my liability limited in a way that is suited to my business?
  • Where are the traps? Am I going to get …?
Data Protection
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  • What happens if personal data is used as part of the services that that is not cleared by the data subject? Who is going to take responsibility for that?
  • Does this cover what do I need to do to comply with data protection laws?
  • What happens if the Information Commissioner takes in an interest?
  • Who has responsibility if there is a breach of the GDPR? Has anyone checked data protection?

What's it all mean?

There's no point signing a contract and signing up to liabilities that your business can't ever meet. What if events develop in in ways that you cannot predict?

That would put the business under if events unfold unfavourably.

Once the contract is signed, the deal is done. There is rarely a clean exit to a one-sided contract.

How we can help:

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We can help your business address these questions and get you to a position to make informed decisions on what your business is prepared to agree.

If you have a business contract that needs review before you sign it, we can help your business in the same way that we have assisted other businesses.

We can help your business address these questions and get you to a position to make informed decisions on what your business is prepared to agree.

 

Our Contract Reviews and Advice

We can help you to:

  • end uncertainty about what contracts are intended to do, for better decision making
  • retain better control of your business contracts and relationships
  • discover things you might have missed or misunderstood
  • increase confidence that the contracts are correctly structured to protect your business interests
  • handle enquiries for new orders and services with a professional and structured routine
  • decide whether the proposed agreement is something that you can stand by - or not
  • properly understand the important parts of contracts so you can decide which risks are worth the deal, and which are not
  • even out unfair provisions in one-sided contracts
  • prioritise your negotiating points, and:
    • get insight to routes in the negotiation that you might not have predicted
    • get a better sense of realistic and sensible outcomes
    • prevent problems maturing into the contract by culling them in negotiations
  • avoid leaking money by dealing with what needs to be dealt with, upfront.
 

What our clients say:

Clear Legal Advice

"As soon as we started talking to Leigh, the IP rights we owned became clear and clearer.

He can explain software, IP rights and tech law without your eyes glazing over with the 'what’s he talking about?' thoughts. We ended up with a strong contractual position in our negotiations."

read on >

Iain Kennedy

CEO

Psand Limited

Knows the Game

"Leigh knows what he’s doing, he knows the game, he knows the technology. Don't waste your time shopping. Time is too valuable. I've already done that shopping, I've already done the homework, I've already gone through the whole experience and learned from my experience and take it and run with it and call him right now."

read on >

Barry Bahrami

CEO

Commercial Network Services

More Informed

"We moved from having no knowledge about intellectual property in software to knowing where the boundaries are, so that we can now handle more things internally. We know where most of the gotchas are, and know when we need to be wary. We make more informed decisions and have reduced our risk exposure."

read on >

David Samuel

Founder; Chief Science Officer

Prediction Machines

Less Time & Money on Legals

"Shopping around for a solicitor is a pain. When you pick a solicitor you have to take a risk somewhere. Leigh put me at ease in the initial conversation, and made it clear that he understands the commercial side of the law.

Now, we spend far less time and money on legal problems in our business."

read on >

Aron Calder

Director

IWCL

Make it right before you start

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Better assess the value of a contract and the downside if things go wrong and put yourself in a superior position to protect your business.

We deliver straight-talking legal advice and tell you how it is. We give firm advice that you can follow and know that it's going to be solid, to the extent that it can be.

Nothing in life is 100% certain. Where there are risks, we tell you.

We combine the skills and expertise gained from studies in computer science - with experience in the industry, post-graduate studies in intellectual property, and over 15 years’ legal experience packed with high intensity disputes, court appearances, focusing on our client’s best interests and making sure we have their backs.

We are not fazed by legal or technical complexity in contracts, because we understand what they mean. We deliver purpose built contracts for your business.

To get an expert view on an existing draft contract you are asked to sign, or have your current contracts fixed, contact us below.

 

How can we help you with your contract?

Call us on +44 20 7036 9282 or tell us here:

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