ASK FOR A DRAFT YOU CAN MARK UP
When your potential business contacts give you drafts that have security protections so they can’t be copied or changed, the only way to comment on them is to print them and handwrite on them. Even worse, when the next version comes back, the lawyer will need to proofread it word for word. That’s another waste of billable time. When you get a draft, make sure it isn’t password-protected—and if it is, ask for a copy that can be redlined. Then all the people who comment on it can add their comments and compare versions electronically.
ONCE YOU HAVE A CONTRACT, SIGN IT
Sometimes you need to put a deal aside while you focus on other priorities. There are often very good reasons for ignoring a deal for a while. But if too much time passes, then everyone will have to review the full history and refresh their recollections about the goals of the venture. When time passes, you may be paying your lawyer to review old notes and make sure nothing was forgotten during the interim.
HAVE CONTRACTS FOR EVERY MISSION-CRITICAL DEAL
If a deal is important to your business’ survival, it merits a contract before you start implementing it. A contract can prevent misunderstandings and makes everyone focus on what they are contributing, what they are obligated to accomplish and what they are getting in return. A good contract may prevent disputes. It’s important to sign the contract before either person puts in a lot of effort or pays the other person because going in the parties are more likely to be reasonable. Once someone has already developed that software for you and you have paid 80% of the price, they are less likely to compromise over price or terms. A contract can help prevent misunderstandings and lawsuits that can take years to resolve and divert you away from your business, not to mention the expense for you, your employees’ time and your legal fees. Even if you do end up in litigation, a contract will set out the parties’ objectives and methods, and give a court a basis to try to discern the parties’ intents.