Why Using Your Own Contracts Is a Must

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Operating AgreementWhile it might seem like a minor point in what can otherwise be more substantive negotiations at the outset of any joint venture, marketing partnership or other business opportunity, it is essential that you insist on using your own contract form when you are ready to memorialize the relationship.

It is not uncommon for both parties to have, on hand, a version of a given agreement (such as an Insertion Order, List Management Agreement, Lead Purchase Agreement, etc.), but, wherever possible, you should insist on using your version, and not the other side’s.

Home Court Advantage

The reasons are simple, though significant: assuming your agreements were properly drafted by qualified legal counsel, those agreements should put you at an advantage vis-à-vis your prospective business partner.

Through your legal counsel’s nuanced use of language when drafting the contracts, the emphasis placed on certain prioritized deal points and simply ensuring that the agreement tilts in your favor in key sections (such as representations, limitations of liability, disclaimers of warranties, indemnification, etc.), you can assure that you are on the more advantageous footing when entering into a business relationship with a new, or long time, partner.

On the flip side, using the other side’s versions frequently puts you at a disadvantage for all of the same reasons.  Even where you undertake to review and revise the other side’s agreement, it is possible that you will miss a section that required changing, or that you will 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.

Winning on the Road: Negotiation and Pushback

Despite the recommendations above, there will inevitably be times that you be forced, by the exigencies of the situation, to use the other side’s agreements rather than your own.  Under these circumstances, 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, remove the advantage that typically accrues to the party that drafted the agreement and to otherwise flag the key issues that may require pushback – or at least consultation.

Signing the other side’s agreement without retaining legal counsel to conduct a review is a highly risky practice considering 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, or 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.

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David O. Klein

David O. Klein

David Klein is one of the most recognized attorneys in the telemarketing, technology, Internet marketing, sweepstakes and telecommunications fields. Skilled at counseling clients on a broad range of technology-related matters, David Klein has substantial experience in negotiating and drafting complex licensing, marketing and Internet agreements.

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