Please indulge me. Pretend that these flies are your customers and suppliers. Further pretend that this flypaper is your standard contract that you have posted on your website, no doubt to save time - and trees.
Your standard contract is essential to protecting your company, right? It probably contains an indemnity, warranty or warranty disclaimer, a liability limitation, a remote damages exclusion, and a governing law provision. But what it doesn't contain is the business terms of your deals. Those are neatly packaged in a one-page document that you can quickly create and email to your suppliers (as a PO) or to your customers (as a sales acknowledgment). Ah, you are amazed by this beautiful simplicity of managing your customers and suppliers! You are enthralled by this well-oiled business process!
Not so fast. Are the flies really stuck to the flypaper? Are you certain that your standard contract is legally binding on your customers and suppliers?
Here's the fly in the ointment. Your customers and suppliers likely have their own contracts that they want to control the deal instead of your contracts. And their terms and conditions will probably conflict with yours - to your detriment if a dispute ever arises.
Now you may say, "the likelihood of a big dispute with our customers and suppliers is small." If you extend that logic, then feel free to cancel your company's commercial general liability insurance because the odds are you'll never need it. Even one commercial dispute can adversely impact your company's bottom line, hurt your reputation, and cause other mischiefs in the workplace. No, you need to take steps to make sure (to the extent you can) that your contract will prevail over any other contract presented by your customer or supplier. What steps should you take to win this battle of the forms?
First, don't rely on non-negotiated form contracts for larger deals where your company has substantial liability exposure if things go awry. You need to specially negotiate these deals - both the legal and business terms - with competent legal counsel working closely with your senior management team. The result should be a comprehensive, mutually signed and dated contract rather than hyperlinks to your website agreement.
Second, if you must rely on website-posted agreements, consider including an "I ACCEPT" button at the end of each form and logging the date and time of your customer's or supplier's acceptance that will be permanently retained in a secure, backed-up database. And implement a business rule that you don't issue a PO or sales acknowledgment unless your agreements are expressly accepted.
Third, if you don't want to log your customer's or supplier's acceptance, make sure that your business paper (those one-page POs or sales acknowledgments that contain business provisions) properly incorporate the legal stuff posted on your website. Don't say something like: "See additional terms and conditions posted at [URL]." Rather, say "Additional terms and conditions posted at [URL] are incorporated by reference as if they were entirely stated herein." And make this statement stand out by using bold text and a larger font than the surrounding text. (But don't put the statement in CAPS.)
Fourth, make sure that your website-posted contracts contain the correct language to knock out your supplier's or customer's conflicting legal terms. This language can take several forms, and you'll excuse me if I don't print a sample here for fear that you will use it incorrectly. (Call me instead.)
Losing the battle of the forms can be costly as discussed in a previous post. Why not do what you can to make your agreements prevail? To make 'em stick?
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