Contract Negotiations: Why Using Your Own Contract Is A Must - Klein Moynihan Turco LLP

Contract Negotiations: Why Using Your Own Contract Is A Must

While it might seem like a minor point in what can otherwise be more substantive contract negotiations at the outset of a business relationship, wherever possible, you should insist on using your own contract. When negotiating a business relationship, it is common for both parties to have on hand their own version of a given agreement (such as a Licensing Agreement, List Management Agreement, and Lead Purchase Agreement). It is essential that you insist on using your own contract when you are ready to memorialize any joint venture, marketing partnership, or other business opportunity. 

Your Contract, Your Terms

The reasons are simple, though significant: a properly drafted agreement by qualified legal counsel should put you at an advantage compared with your prospective business partner. In drafting a contract, your legal counsel will use the nuance of language to emphasize specific prioritized deal points. In addition, your counsel will design the contract to ensure that the agreement tilts in your favor in key sections (e.g., representations, limitations of liability, disclaimers of warranty, and indemnification). With your own contract, you can ensure that you are on a more advantageous footing when entering into a business relationship with a new or long-term partner. On the other hand, using the other side’s agreement frequently puts you at a disadvantage for all of the same reasons.

It is true that you can undertake to review and revise the other side’s agreement. However, you may miss a section that requires changing and/or you may not have free rein to make as many changes as necessary. Not to mention that you may incur legal costs in connection with the review and revision of the other side’s contract.

Contract Negotiations, Dealing with Pushback

Despite the recommendations outlined above, there will inevitably be times, due to deal-specific circumstances, that you will be forced to use the other side’s agreement rather than your own. In such contract negotiations, it is highly recommended that you retain qualified legal counsel to ensure that any agreement that you intend to sign is reviewed and revised in order to level the playing field. Further, counsel will remove the advantage that typically accrues to the party that drafted the agreement, with your attorney also flagging the key issues that may require pushback.

Signing the other side’s agreement without retaining legal counsel to conduct a review is quite risky, given the ability of the party providing the agreement to frame the relationship.

If you are interested in learning more about this topic or require the preparation and negotiation of agreements in connection with your business needs, please e-mail us at info@kleinmoynihan.com, or call us at (212) 246-0900.

The material contained herein is provided for informational purposes only and is not legal advice, nor is it a substitute for obtaining legal advice from an attorney. Each situation is unique, and you should not act or rely on any information contained herein without seeking the advice of an experienced attorney.

This post was originally published in 2013 and updated on January 11, 2022.

Attorney Advertising

Photo by Gabrielle Henderson on Unsplash

Similar Blog Posts:

Why You Need an NFT Contract

Why Social Media Influencers Should Form LLCs

Telemarketing List Management Agreements: Age of Consent

Home » Blog »

Share:

Trending Topics