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Rule #12 Let Contracts Work For You Not Against You.

As a startup, you can’t afford to be in a position of disadvantage when dealing with the vendors that supply you with your goods and services. Thats why its extremely important to read your contracts thoroughly to make sure that, if your not happy with what you’ve received, you can terminate and walk away with the least amount of damage done to your pocket or operations. Many times startups hurry and sign just to get things moving, not realizing that clauses were put in place to withhold your IP until full payment is made even though you haven’t received what you’ve agreed on. You need to always be able to walk away with exactly what you’ve paid for. Make your milestones clear and frequent. Deadlines are also important. If the vendor passes them, there needs to be penalties or termination clauses in place to allow you to walk away with what has been done so far without paying the next milestone payment. Get an SME lawyer to review it if you find reading contracts long and daunting, which they are most of the time. Better pay a little now then lose a lot later. Contracts are in place to create an advantage over you, so if the other party doesn’t agree for clauses to be put in place which protect you as well as them, then don’t sign. Run. Period.

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