The Old Joel on Software Forum: Part 4 (of 5)

Language in contract

Here is a section of contract with a broker in a corp-2-corp situation. I haven't signed it yet. But several of the clauses have to be modified. What is the best way to do this?

Can I strike them out with pen and initial it? Is that enough or does the broker have to initial it too?

The broker sent the contract as an attchement to an email. Can I delete the clauses I don't like and print and then send it in? Is that legally allowed?

Broker has said he can prepare an addendum to the contract. Why can't he strike out what I won't sign?!

Here are the clauses that concern me. (rather long)

11. Term. The term of this Agreement shall correspond to the term as set forth in the Primary Agreement between Primary Supplier and Customer and can be canceled by Secondary Supplier only in accordance with the terms of said Primary Agreement. Primary Supplier reserves the right to terminate this Agreement upon not less than five (5) days’ prior notice at any time without cause during the term of this Agreement.

I AM NOT PRIVY TO THE AGREEMENT BETWEEN THE CUSTOMER AND PRIMARY SUPPLIER (BROKER). I WON"T ACCEPT THE LANGUAGE.

13. Good Faith. It is understood that all parties will operate in good faith. It is further understood by the Secondary Supplier that the Primary Supplier will serve, in effect, as the “Customer,” and that all correspondence, communication, transmittal and communiqués, both verbal and non-verbal, will take place between the Secondary Supplier and the Primary Supplier, and that the Secondary Supplier is in no way permitted or allowed to contact Primary Supplier’s Customer for which the Secondary Supplier has been engaged to perform services, which contact includes marketing activity, without the prior knowledge and consent of Primary Supplier. This is in effect during the term of this Agreement and for a period of one (1) year thereafter.

I DON"T TRUST A BROKER TO TELL ME THE TRUTH. THIS IS KIND OF LIKE A GAG ORDER.

14. Non-interference with Business Relations. During the term of this Agreement and for a period of one (1) year thereafter, Secondary Supplier shall not (i) do anything, intentionally or otherwise, to discredit or otherwise injure the reputation or goodwill of Primary Supplier; or (ii) in any way interfere with the relationship of Primary Supplier with any customer, employee, independent contractor, engineer or business relation.

ONE-SIDED. WHAT ABOUT THE BROKER DOING THIS TO ME.

15. Restrictive-Covenant Conversion/Right to Hire. Secondary Supplier agrees that during the term of this Agreement and for a period of one year thereafter, that Secondary Supplier will not solicit or attempt to hire any employee of Primary Supplier or Customer. Secondary Supplier understands that violation of this provision would cause severe financial hardships and irreparable harm and that Primary Supplier and/or Customer would be entitled to injunctive relief, damages, and other available remedies.

I DOUBT IF I WILL HIRE ANYONE FROM PRIMARY SUPPLIER AND CUSTOMER BUT THIS SOUNDS LIKE IT HAS TO GO.

The question is how to modify these clauses and make the contract legally binding. Thanks.

Rob
Thursday, May 13, 2004

Sometimes people just delete clauses. Of course you have to sign it and then so does the broker. If they're dead keen on the money, they might do this and hope it won't matter.

More likely they will not sign and, if a dispute occurs, claim the original contract stands.

Your concerns are all valid. Note that in the UK, they've just introduced legislation that makes it illegal for brokers to stop you dealing directly with the employer, and makes it illegal for them to stop you working for the employer without going through them.

No doubt the American, Australian and Canadian brokers will be desperately hoping such laws don't spread any further.

For you to move further, you have to work out suitable phrasing and be prepared to stand your ground. You should also tell the employer what you are doing, so the broker can't reject you for standing up for your rights.

It might be handy to get a lawyer to assist you with drafting and negotiations.

Inside Job
Thursday, May 13, 2004

Yeah, Jesus Christ, hire a lawyer.

IANAL
Thursday, May 13, 2004

A lawyer is appropriate in this case because you're drafting actual clauses. Lawyers do that all the time and can save you time and grief.

Secondly, if you're going to stand up for your rights, this is where push comes to shove. The broker can betray you completely by not signing or not signing each page, or something like that. He will know he's shafting you, but you won't.

A lawyer, on the other hand, will know the mechanics that the broker must honour, and he will know to insist on them.

Inside Job
Thursday, May 13, 2004

I hate when everybody always says "hire a lawyer" -- geez! Do you people all hire lawyers before buying a car? Applying for a credit card? Signing up for a cell phone? A written agreement doesn't have to be in legalese, you can write it in crayon on a napkin. Judges use common sense if it ever gets to that.

If you don't like a clause in any written agreement, tell them what you don't like, or ask for clarification, or cross out what you don't like and write in something else. They may say their policy is only to go by their original, and they just won't hire you (if they do, the modification you signed is the only one they have, whether or not they 'signed' it themselves).

But if you get some lawyer in it they're definitely going to tell you to get lost -- nobody has time or money to mess around with every single client like that.

Ron
Friday, May 14, 2004

When you hire a car or take out a credit card, the contracts are covered by consumer protection laws. That is, there are limits as to how far the car yard or credit company can stick you. Recruiting has no such protections.

Lawyers are not the answer to everything, but anyone wanting to be on an even footing with a broker could benefit from having one do the negotiating.

If the broker has nothing to hide, he should have no issues with this at all. If he's trying to stick you, he will.

Inside Job
Friday, May 14, 2004

"Do you people all hire lawyers before buying a car? Applying for a credit card? Signing up for a cell phone?"

A 2-year deal at $75/hr is potentially a $300,000 deal. Rest assured the broker has an attorney (who do you think drafted the contract?). Why shouldn't the OP?

And if the broker is going to get all weird when you want a lawyer involved in a $300,000 deal, then you need to go find other opportunities, because there's something wrong with this one.

Philo

Philo
Friday, May 14, 2004

More like "rest assured the broker will pull out another copy of the standard contract from the pile in the filing cabinet."

The reality of the broker world is if you come in with a lawyer and talk about "negotiating" where they'd have to hire their own attorney, they're going to say forget it.

Ron
Friday, May 14, 2004

> The reality of the broker world is if you come in with a lawyer and talk about "negotiating" where they'd have to hire their own attorney, they're going to say forget it.

The employer has selected the candidate and the broker stands to make money. It's not worth it for the broker to reject a candidate over trivial paperwork. Most of the clauses of concern don't usually affect the broker's profit.

Usually brokers' contracts are massively one-sided and the broker knows this. He can accommodate some changes easily, and respects that the candidate is not stupid.

Inside Job
Friday, May 14, 2004

Exactly, and it's likewise not worth retaining an attorney over "trivial paperwork."

Ron
Friday, May 14, 2004

How is $300,000 "trivial"?

anon
Friday, May 14, 2004

Working a regular job for 3-5 years at $80-100K is the same thing. Does anyone actually hire an attorney to review and "negotiate" your job offers? (no)

When you get a mortgage approval for a $400K home do you hire an attorney to rewrite it and "negotiate" for better terms? (no)

There are certain instances where attornies in the loop are guaranteed deal killers, in my experience. Not to mention you're not going to find one taking walk-ins off the street for simple contract reviews, they'll want to be retained, and they won't be experienced in this field, and the best they'll do is explain what things mean and cross out what you don't like and put in what you want. Then send you a bill for $1,500.

Then you submit it and the other side will say "we only use the original contract, sorry".

Ron
Friday, May 14, 2004

Ron, you wouldn't be a broker yourself would you?

The paperwork is "trivial" to the broker, but not to the candidate. It has significant negative effect on him. Changes that are desirable often don't have any negative effect on the broker.

People don't need an attorney to negotiate staff job offers because those arrangements are tightly controlled by law. Contract work is not. Same goes for home buying.

By the time you get to signing the contract, the broker is committed to a certain extent. That's their own fault, because they avoid any commitment to you until they have a commitment from the employer. So there's a big incentive for the broker to confirm a deal with the candidate too.

Checking a contract and making a phone call to a broker can cost as little as $200.

I personally got about $15,000 from a 5 minute phone call by a lawyer once. He didn't even have to write the letter. He simply looked at the contract and a letter the broker had sent, knew they didn't have a leg to stand on, and phoned the broker.

Inside Job
Friday, May 14, 2004

No, I'm not a broker!

But fine, hire a lawyer, maybe I've just had bad (and expensive) experiences with them.

Ron
Friday, May 14, 2004