September 26, 2011
I’m in the process of working out contracts with two different clients.
For me this is always an emotionally tough time. We’re at the beginning of the relationship where we trust each other and we have to take a break in that love-fest to look at how we should protect ourselves in case things go wrong.
It makes you wary when you should be excited and gung ho.
At its worst a contract is a recitation of things that one party (usually the company crafting the contract) can sue the other party for. At its best, a contract is mainly a reminder of what we’ve agreed on.
I recently had a situation where I remembered I used to be paid at a higher rate than the current contract specified. A quick look at the previous contract showed me that I’d remembered wrong.
Some contracts specify how long it will take you to get paid. Well, that’s technically not true. They actually specify that the payment will be made within 30 days or 45 days or 60 days…. In my experience, the bigger companies have a note posted that says “don’t pay until the very last minute”. The smaller companies tend to pay much more quickly.
I love contracts with people in small companies like mine. They know how they like to be treated and they are pretty good at treating my company the same way. Large companies aren’t set up to allow that sort of flexibility. There are great people working for large companies — they just are constrained by internal policies and procedures.
Generally, a contract does little to protect me. It most often protects the larger party. There are clauses I always look to eliminate from contracts. I’m willing to agree to protect my employer’s confidentiality and to not poach their employees or their clients for a reasonable time. Those never bother me.
It’s the unreasonable ones I strike out of the contract. They will, by nature, push back – but I’m fortunate to have worked with reasonable and reputable people who see my point and agree that they’d never sign a paper that obligated them to such things.
Sometimes companies can’t budge. They, reasonably, object that it’s too complicated to have different agreements for different employees. They want one document. Sometimes I’ve worked with them sometimes I haven’t but there are never hard feelings — a contract is an agreement. Sometimes we just can’t agree to the terms each side needs to work with the other.
Here’s the main thing I’ve learned about contracts over the years.
If you’re working with good people who you can trust then a contract isn’t necessary and if the relationship goes bad and you can no longer trust the other party then a contract isn’t sufficient.