End User Contracts are Too Important to Leave to the Attorneys! (Part II)
February 28, 2010
This is the second blog on this topic, and is worth of a second look for any expansion stage company. So what I am trying to say here is that contracting in the IT world is too complex, and don’t leave it all to the lawyers (they need your help).
What Can You Do?
1) Don’t Just Accept what Your Attorneys Provide. Too often clients ask an attorney for an IT contract but don’t thoroughly read what is sent over. You should read the agreement front-to-back, and make sure it includes what it needs to, but leaves out the rest. You don’t have to be an attorney to figure this out, just have a discussion with your attorney and go clause-by-clause through the agreement to see if those clauses are necessary or appropriate for your particular business. This way the important clauses will be there, and the others won’t. Debate this with the attorney, and don’t simply accept what is there (or they say) as the gospel.
2) Ask them to Write it in Plain English. Most lawyers don’t learn how to draft in law school, and instead learn it on the job (usually not in formal training sessions) or by reading existing forms (e.g lots of ‘herewith,’ ‘witnesseth,’ long complex/wordy clauses, and repetitive clauses). The problem here is this way of drafting (which has been around for hundreds of years) does not work very well in the new world of software and information technology transactions (it is simply outdated). . . the problem has also been made worse with the widespread adoption of work processors at law firms in the past 20 years (I am old enough to remember a time when lawyers did not really use them). There are several leaders in this Plain English drafting movement (Adam’s Drafting (he calls is Modern Drafting) and Bryan Garner (Changing the Way Lawyers Communicate)). The way you can tell if an agreement is in Plain English is when you can read and actually understand the agreement (seems pretty basic). If you think the agreement is too complex you should ask the attorney to simplify it and write it in Plain English.
At the end of the day, think about it this way: your contracts are an extension of your business and are part of what you are selling/selling process. You should think about what they say about your company (we are hard to work with vs. we are easy to work with; we provide a one sided agreement vs. we provide a more balanced agreement). Remember that not only are you going to have to read the agreement, but your customer will have to read it before they purchase. So whether you are looking for investors or venture capital financing, your end user agreements are too important to leave to the attorneys!