The Universe of Discourse

Sat, 21 Mar 2015

A public service announcement about contracts

Every so often, when I am called upon to sign some contract or other, I have a conversation that goes like this:

Me: I can't sign this contract; clause 14(a) gives you the right to chop off my hand.

Them: Oh, the lawyers made us put that in. Don't worry about it; of course we would never exercise that clause.

There is only one response you should make to this line of argument:

Well, my lawyer says I can't agree to that, and since you say that you would never exercise that clause, I'm sure you will have no problem removing it from the contract.

Because if the lawyers made them put in there, that is for a reason. And there is only one possible reason, which is that the lawyers do, in fact, envision that they might one day exercise that clause and chop off your hand.

The other party may proceed further with the same argument: “Look, I have been in this business twenty years, and I swear to you that we have never chopped off anyone's hand.” You must remember the one response, and repeat it:

Great! Since you say that you have never chopped off anyone's hand, then you will have no problem removing that clause from the contract.

You must repeat this over and over until it works. The other party is lazy. They just want the contract signed. They don't want to deal with their lawyers. They may sincerely believe that they would never chop off anyone's hand. They are just looking for the easiest way forward. You must make them understand that there is no easier way forward than to remove the hand-chopping clause.

They will say “The deadline is looming! If we don't get this contract executed soon it will be TOO LATE!” They are trying to blame you for the blown deadline. You should put the blame back where it belongs:

As I've made quite clear, I can't sign this contract with the hand-chopping clause. If you want to get this executed soon, you must strike out that clause before it is TOO LATE.

And if the other party would prefer to walk away from the deal rather than abandon their hand-chopping rights, what does that tell you about the value they put on the hand-chopping clause? They claim that they don't care about it and they have never exercised it, but they would prefer to give up on the whole project, rather than abandon hand-chopping? That is a situation that is well worth walking away from, and you can congratulate yourself on your clean escape.

[ Addendum: Steve Bogart asked on Twitter for examples of unacceptable contract demands; I thought of so many that I put them in a separate article. ]

[ Addendum 20150401: Chas. Owens points out that you don't have to argue about it; you can just cross out the hand-chopping clause, add your initials and date in the margin. I do this also, but then I bring the modification it to the other party's attention, because that is the honest and just thing to do. ]

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