One of my favorite clients asked me to review another marketing vendor’s contract; a contract he was winding down and exiting. What I saw was stunning, reminding me that many of our small business owner clients might benefit from our discussion about a contract’s terms and conditions.
Terms and Conditions are not sexy. They may be missed entirely. After all, they’re often found buried in the fine print at the end of a contract. A new vendor relationship is a bit like a new romance; you may be wearing rose colored glasses, allowing you to see only the things you like. But this is a vendor relationship, not a romance, and the beginning of the relationship is when you need to be especially clear-eyed. Reading and understanding terms is critical to establishing the relationship you want — the relationship that best serves you, the customer.
The contract I reviewed did not adequately protect the customer. It appeared designed to allow the company to pad their monthly revenue while limiting their customer commitments wherever possible. Here are just two of the clauses that were especially damaging to my customer:
TERM OF CONTRACT: “The term of this contract is for twelve (12) months….This agreement automatically renews for a subsequent one year on the day immediately following the end of the initial term, unless either party gives the other 90-days prior written notice of its intent not to renew this Contract.”
- If you are not happy with a vendor’s service you shouldn’t be locked into another 90 days. Ask to redline this term! By requesting the cancel clause be reduced to a 30 day requirement you’ll be better protected. And nix that twelve month term and automatic renewal for another twelve months. Hogwash. Companies that earn long partnerships by delivering superior results and service do not need a twelve month guarantee or to bury automatic renewal clauses in their terms.
REVIEW, APPROVAL and ACCEPTANCE PROCESS: “Unless otherwise noted…acceptance must be obtained prior to distribution or upload….The review, acceptance and approval process as specified in this scope will be the responsibility of THE CLIENT. THE CLIENT will be responsible for ensuring that the approval process follows the proper procedures prior to acceptance of deliverables.”
- The first sentence simply says that deliverables must be approved by clients prior to distribution. Fair enough.
- The rest of the clause, IMO, is written to protect the service provider at the customer’s expense. It’s backward legalese, not the best practices clause of an ethical, topnotch marketing services company.
- Stating that only THE CLIENT is responsible for defining and ensuring the review/approval process is just plain wrong. In my experience, top marketing firms specify their own process clearly so that customers know what to expect–they don’t try to wiggle out of clear expectations by dumping the entire definition of process on the customer. Even more important, a provider’s process reflects their expertise — including what they know is needed to produce top quality work for customers. This is huge for service providers — not stating your own process gives not one hint of the professional support your clients are owed. How do they know how long you need to provide a brilliant solution? Should they expect to receive three reviews or one? Are review inputs and client change requests due within one working day or what? How do clients know when a project is in jeopardy if your service company or ad agency can’t define HOW they work?
- In the example here, baldly stating that only THE CLIENT is responsible for picking the review process AND ensuring it happens is a loud, clear signal that you may very well be deeply disappointed with the project’s final quality or delivery.
IN CONCLUSION: Should you discover you’ve signed a less than optimal contract, all is not lost. We’d encourage you to negotiate or renegotiate if you feel you are owed. If needed, your largest ‘stick’ is your ability to speak publicly by sharing bad reviews or social comments. You want to be fair and honest, of course. But if you’re requesting a renegotiation because your contract is not written in your best interest your vendor should want to understand and address your concerns. And they sure won’t want bad reviews.