5 Tips to handle contracts like a pro

Business owners/leaders have seen many contracts while they have been on the job. They think that they understand the contracts that they or their team signs, yet how many times have the contracts had provisions that they were unaware of, or caused the economic arrangement between the business and its vendors to be different than they thought.

Here are a couple of tips to be aware of before you ever sign a contract:

• Before a contract is prepared, write down the points that are essential to the deal. This includes the economics of the deal, as well as payment due dates, delivery details, etc.
• If you are dealing with a new vendor, consider doing a trial period in dealing with them to get some experience with the vendor to determine how well they perform before you get too much money and time invested with them.
• Ask the vendor for a copy of their standard blank contract. All vendors have these blank forms. If you are considering signing the vendor’s contract, instead of making up your own, it is essential that you read the contract. If there are any provisions in the agreement that you do not understand, you need to ask what is meant by those provisions. Read the fine print!
• Pay particular attention to how your company can get out from under the contract if things do not go as planned. Too few times do business owners look at the way out the door. Your team is excited over the new piece of equipment or new software that is going to make their business lives easier. They later find out that the equipment needed another piece of equipment to make it operational, which costs the company more money. Or the software conflicts with your existing software and is not useable. How does your company get out?
• Check out the vendor to determine how long they have been in business, their reputation in the field, and find others that have used their services to determine what their experience is. Ask for references and call the references to determine if they are a good fit and live up to expectations.

It is only if you do these things that you can have the best results with your contracts with vendors. If you have a general counsel, make sure that the GC reviews the documents, too, before you sign. It’s best to have all contracts go through the same person if possible for the proper reviews, overview, and consistency.

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Denice Gierach

Gierach Law Firm

Denice Gierach is an attorney, CPA, Northwestern University business master's graduate, and has owned several businesses from real estate to manufacturing. She is the lead attorney at Gierach Law Firm in the Chicago area. With more than 30 years of experience, she has been a respected and sought-after resource for businesses looking to grow, sell, solve problems, and succeed long term. Her insights across business areas gives a fuller lens to business issues and solutions, and helps businesses grow and succeed with less time spent on legal issues and other time-consuming problems.

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