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OK at Work, hosted by Offit Kurman attorneys Russell Berger and Sarah Sawyer, is a weekly podcast that discusses current events and legal issues impacting business owners. From updates on the ever-changing employment law landscape to the risks and benefits of integrating AI into your workplace, subscribe to stay up-to-date on issues and events that may impact you and your business.
Sarah Sawyer: Welcome to this week's
OK at Work with myself, Sarah Sawyer,
my colleague Russell Berger, both
attorneys at Offit Kurman, and today
we are talking about contract review.
So obviously in a business there's a
ton of different contracts that business
owners might come in contact with, whether
it be their own contracts that they're
negotiating or ones that are incoming from
vendors or related to these new purchases
or, just any given thing on a day-to-day
basis or addendums to agreements.
And sometimes it can be something
that they look at and say, I
just need to get this done.
Right.
So, I think sometimes that business
owners, because it's just one of the
many things, especially when you've got a
smaller, medium sized business that comes
across your plate on any given day that it
can be a little intimidating to say, well,
what do I really need to pay attention to?
How long is this process gonna take?
And most importantly, from a
business owner's point of view,
is this gonna slow me down?
Right?
So what are some things that business
owners should be thinking about on the
contract process and when they've got
these contracts coming their way and
they're just trying to get things done?
Russell Berger: Yeah.
Well, we've talked about it before,
but the thing to speed it up and that
helps you get through it the fastest
is to have your own contracts where
you know exactly what the terms are.
And you use your documents and you
don't have to worry about these things.
But of course, that's
not how it always works.
Even when you use your documents, you get
modifications to them, changes to them.
I think for business owners look, ideally
there's an easy answer to say well
call your lawyer and have your lawyer
explain what all these changes are.
You can decide whether you
like it or not, but as you said
that slows the process down.
And that's certainly adds an
hour a time for a lawyer to look
at and give you feedback on it.
I think it's probably best to understand,
and you should do this with your
lawyer when you're looking at standard
type agreements, what provisions are,
like really, truly business terms?
A lawyer's not gonna be able
to give you a whole lot of
analysis or feedback on that.
Which ones are legal terms and which
ones are ones like, Hey, these are
ones you can give on, these are ones
that have a greater consequence.
And in every business and every type
of contract, those terms might differ
a little bit, but I think for your
specific use, when you get that form
agreement in place, you should have a
conversation with your lawyer and say,
Hey, if someone pushes back on this
term, should I be calling you about this?
Is this a deal breaker type term?
Is this a critical term or is
this just like Yeah, whatever.
It'll probably be fine no matter what.
Sarah Sawyer: Yeah, I think at
its base level, a contract is
obviously a way that, a tool for
having some mutual understanding
about whatever is taking place.
And so if you can really, hone
in on what are the goals of this
document and what is the intent?
Or what are we trying to
make sure we get across?
And then when you do engage with council
on it I know that helps us be able to
be really clear on, 'cause we've got the
legal knowledge in the background to be
able to cut through what from a business
perspective, it might look like a lot
of like mumbo jumbo out to some people.
Right?
Or if it's poorly drafted sometimes
that makes it even a little
crazier and more challenging.
But you do wanna take that time to
make sure you have an understanding.
'cause I know
it's not a great feeling when you
think that a contract says one
thing and then something happens.
And down the road you realize
that it's not protecting you in
the way that you thought, the
mutual understanding is not there.
There is some disconnect.
Because that's a failed
contract at that point, right?
For both sides because it's gonna
lead to conflict and issues.
So it does take some time upfront.
I agree with you, Russell having, control
of the process as much as possible,
even though it might be a little bit
more extra work upfront to get your
own contracts in place it does help you
just to start with that understanding
and then make some tweaks and things.
But it is worth the time and can
still be done pretty effectively,
but you don't wanna be finding out
that your contract lacks what you're
looking for when something goes wrong.
That's definitely key.
Russell Berger: Yeah.
And along Those lines, especially
when you're not working off your form
you should be able, as a business
owner, you should be able to look
at the contract and understand.
OKay, I got it.
Like I know what these business terms are.
I know the payment term.
I get that.
I understand that.
I can conceptualize that
even without a law degree.
But some of these other terms I
don't even know what that means.
And just as a general rule, like you
probably shouldn't be signing things if
you don't know what the provisions means.
When it gets more into that territory
and look, you can read it and say you can
find a forum selection clause, which most
contracts have to say, if we get into a
dispute, we'll litigate in this forum.
And you might say that's the statement
is in the template that I got.
That seems fine enough to me like
you could reach that conclusion.
There's some complicated insurance
requirement or indemnification,
things like that where you
might say this is dense.
I'm not sure what I'm signing.
Probably a good sign where, a good alert
to say, Hey I better ask for help on this.
Sarah Sawyer: Yeah.
Well, great advice, Russell.
We'll see you next time.
Russell Berger: Thanks, Sarah.