Tripping over the Fine Print – How to Avoid Pitfalls When Negotiating Vendor Agreements
October 19, 2006
Samuel Goldwyn once said, “A verbal contract isn’t worth the paper it’s written on.” Are the days of a handshake deals gone once and for all? Perhaps. Businesses and customers increasingly require written vendor service contracts as opposed to relying on verbal agreements. This trend is likely to continue given the heightened prevalence and rising cost of contract dispute litigation, as well as the increased emphasis on the importance of having clear contracts in place.
To reduce the likelihood of a contract dispute, a complete agreement should set forth the clear expectations and obligations on the contract party. Once agreed upon, a satisfactory written agreement provides both sides with a level of certainty, and thus, piece of mind. As the old adage says, an ounce of prevention is worth a pound of cure, or in this case, the avoidance of potentially significant litigation costs.
Don’t wait for it to end up in court
Despite the fact that business owners and managers may look at lengthy agreements as burdensome, those who have been involved in a prior contract dispute find the contract review process an essential part of their risk reduction strategy. When it comes to negotiating vendor agreements, the end goal is conflict and litigation avoidance. The finished and executed agreement should be a complete and unambiguous document that accurately reflects the “meeting of the minds” between the parties without confusion, and most specifically, conflict…
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by: Jeffrey I. Fialky, Esquire
October 16, 2006