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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