Sat, 21 Mar 2015
Examples of contracts you should not sign
Shortly after I posted A public service announcement about contracts Steve Bogart asked me on on Twitter for examples of dealbreaker clauses. Some general types I thought of immediately were:
Any nonspecific non-disclosure agreement with a horizon more than three years off, because after three years you are not going to remember what it was that you were not supposed to disclose.
Any contract in which you give up your right to sue the other party if they were to cheat you.
Most contracts in which you permanently relinquish your right to disparage or publicly criticize the other party.
Any contract that leaves you on the hook for the other party's losses if the project is unsuccessful.
Any contract that would require you to do something immoral or unethical.
Addendum 20150401: Chas. Owens suggests, and I agree, that you not sign a contract that gives the other party ownership of everything you produce, even including things you created on your own time with your own equipment.
A couple of recent specific examples:
Comcast is negotiating a contract with our homeowner's association to bring cable Internet to our village; the proposed agreement included a clause in which we promised not to buy Internet service from any other company for the next ten years. I refused to sign. The guy on our side who was negotiating the agreement was annoyed with me. If too many people refuse to sign, maybe Comcast will back out. “Do you think you're going to get FIOS in here in the next ten years?” he asked sarcastically. “No,” I said. “But I might move.”
Or, you know, I might get sick of Comcast and want to go back to whatever I was using before. Or my satellite TV provider might start delivering satellite Internet. Or the municipal wireless might suddenly improve. Or Google might park a crazy Internet Balloon over my house. Or some company that doesn't exist yet might do something we can't even imagine. Google itself is barely ten years old! The iPhone is only eight!
In 2013 I was on a job interview at company X and was asked to sign an NDA that enjoined me from disclosing anything I learned that day for the next ten years. I explained that I could not sign such an agreement because I would not be able to honor it. I insisted on changing it to three years, which is also too long, but I am not completely unwilling to compromise. It's now two years later and I have completely forgotten what we discussed that day; I might be violating the NDA right now for all I know. Had they insisted on ten years, would I have walked out? You bet I would. You don't let your mouth write checks that your ass can't cash.
[ Addendum 20191107: Our FIOS was installed in January of 2018. Lucky I hadn't signed that ten-year contract, huh? ]
[ Addendum 20220420: More about why it's important to push back ]
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