Thu 13 Aug 2009
What is the best way to handle contract disputes with clients? My company has a business agreement for clients to sign. Is there ever a time when a company should sign a clients' independent contractor agreement?
Whenever possible, get clients to sign your contract. If the attorney who drafted your contract did their job well, your contract should more favorable to your company. It would specify that arbitration or disputes being handled in your state, not the client's (if they are out of state), plus include other stipulations that are fair to your client but also advantageous to you.
There are exceptions. If you are using software or an online service, you typically review terms online and agree to them by clicking a checkbox before you proceed to use the tool. But for consulting engagements or high ticket items that require a written signed contract, try to use your own contract.
That said, some clients will absolutely insist that you sign their agreement. Make sure that there is nothing in their contract that is detrimental to you.
I once had a big brand name client agree to signing our agreement. However, their lawyers wanted to modify parts of it, which wasn't surprising since that's what lawyers at big firms do. The document they returned looked like it went through an episode of Extreme Makeovers - Lawyers Edition. It contained so many negative and heavy handed attributes that I was very uncomfortable signing it. The client was frustrated because she really wanted to use our company and did not feel our initial terms were out of line, but she was only authorized to sign what her lawyers agreed to. In the end, the deal broke down.
Be prepared to walk away from a deal if the contract terms could put you in a bind.