Our team negotiates a lot of contracts and works with many clients across a broad range of industries. Over the years, we’ve noticed a varied approach to the contract negotiation process. Some clients are highly involved, participating on every call and paying close attention to details, while others prefer to remain in the background and jump in only when directed by their lawyer. However, the vast majority of business people fall somewhere in the middle – leading the negotiation of core terms such as price and payment terms – then deferring to legal counsel to handle provisions such as indemnification, limitation on liability and other legal boilerplate.
Before you decide to leave these issues solely to the lawyers, consider this: there is no such thing as a “legal only” issue in a contract. Each provision is about sharing and shifting risk. As a business leader, you will want to understand what risks you are taking in each deal. A good lawyer will take the time to explain – in plain English – the implications of standard legal provisions, the different positions you might take on those terms, and how each option will likely affect your business.
Armed with this information, the business team is better equipped to make informed decisions about what is a comfortable amount of risk for their company. After all, at the end of the day, it is your business decision, not your lawyer’s decision, that will drive forward the transaction.
In this 3-part series, we will dissect common legal provisions, often viewed as “legal only issues,” to illustrate how gaining a better understanding of these issues can positively impact your business and help you best protect your interests.
Read Part 1 – The Basics of Contract Damages.