Before you sign a contract, read it. Here are some real examples of things I’ve run across:
- The employees who work with us must pass a background check.
- All of your employees must pass drug tests. (No wording about if someone lives in a marijuana-legal state, and how we’re supposed to react then.)
- Employees – not just the company – must be personally liable if something goes wrong.
- You must have $1mm liability insurance.
- You must have $10mm liability insurance.
- You are liable for everything that goes wrong, with no cap on liabilities.
- Any confidential data we give you must be stored in an encrypted location.
- We’re not going to tell you what’s confidential and what isn’t.
- If we give you confidential data by accident, you have to report it to our security officer, and participate in the investigation at our headquarters.
- If we ask you to delete our data, you must delete all copies of it, including any backups.
- If we suspect that you leaked any personally identifiable data at all, you’re liable for the investigation costs.
- If we prove that you leaked personally identifiable data for any one customer, you’re liable for personal credit monitoring for all of our customers for the next 3 years, regardless of whether or not their data was leaked.
- If you leak personally identifiable data, you’re liable for a marketing campaign to fix our company’s image.
- You can’t work with any of our competitors for 3 years.
- You can’t work with any of our competitors for 3 years, and we won’t tell you who they are.
- You can’t work with any of our competitors for 3 years, and we may change our lines of business or acquire more companies at any time during those 3 years.
- If you learn anything during the engagement, you can’t apply that knowledge to other customers.
- If you give us advice and it doesn’t work, you’ll do the engagement over.
- If you give us advice and we ignore it, or it’s too hard, you’ll do it over.
- If anything breaks during the engagement, you’re liable, but you can’t stop anyone else from using the system during the engagement. (And oh yeah, we’re calling you because things are broken already.)
None of these requirements are crazy – they’re all based on troubles somebody had once, and now they’re trying to build in permanent protection in their contracts. I get it. Everything’s negotiable, and it doesn’t hurt them to ask.
But it can hurt like hell if you sign, so read carefully.
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My favorite was, “our security software uses Social Security Number as your identifier so we cannot give you access without it.”
My second favorite was a project I was hired on to assist another consulting company as the “replication expert” and was then told not to discuss options about replication with the customer because they had already decided they were not going to do the replication project the customer wanted. I spent two weeks filling out reports and attending meetings where the other company and the client argued over whether the replication project they wanted was feasible or not. Then the project was canceled.
HAHAHA, wow.
Worst one I ever missed (it was a 6 month contract to upgrade a piece of software from one language to another):
Developer will organize and perform upgrade ideas we have collected.
Turns out it was a folder a couple inches thick, with among other things, ideas written on bar napkins.
Of course this guy also expected me to ask permission to go to the bathroom and flew off the handle when I talked to another contractor for ~20 minutes. “Do you know how much money that conversation cost us!!”
Seen some silly non competes, but the open ended ones in the post about new lines of business gave me a good chuckle.
One of the greatest lessons learned since going independent – everything is negotiable, not just rates!
Clearly followed by: connect with a good contract lawyer who is willing to taking the time to understand the type of services you perform and clearly explain where you’re exposed and to what extent.
My wife recently hired on with a company that wanted her to sign a lengthy and intricate contract. My wife is pretty sharp so spent the money to have a business lawyer look it over — and it’s a good thing he did, because he said that “as written, you’d never be able to work anywhere else again.” So he struck out about three-fifths of the text, and wonder of wonders, the employer agreed to it! The kicker? A month later my wife left that job and went to another company that does exactly the same thing. The first employer started giving her some flak about how this “violates the non-compete clause in your contract,” whereupon dear wife fired back, “If you look at MY contract, you’ll find that we took that part out.” She was right, they shut up, she’s now working the other job with equivalent money and MUCH BETTER benefits. So, folks, I heartily recommend having a lawyer look over your contract, not being shy about having stuff taken out that you don’t want, and REMEMBERING what you took out, if and when “push comes to shove.”
(Oh, and at an earlier job, when she left they made her sign a contract that contained a non-compete clause, but right where it was supposed to say “… must not work for …,” the word “not” was omitted! So, technically she’s been in violation of THAT agreement for several years, by NOT fulfilling the contract’s as-written REQUIREMENT that she compete with them…)
Wow! I almost can’t believe several of those contingencies, but it’s like you said anything is negotiable. About 15 years ago I received an attractive offer from a consulting firm located in a capitol city. Nearly 100% of the firm’s business was with state government agencies. The non-compete clause stated that upon separation I could not work for any of their clients or their client’s clients. I had a personal friend who is an attorney offer to review the contract and he advised me to question the severely restrictive nature of the non-compete clause. I questioned it very diplomatically and politely and the company officer never flinched and amended it to read that I could not work for any of their clients that I had not directly served.
On another note, sometimes the consultant ends up getting even with the client. I once worked with a consultant that had a client invite him to lunch. The client paid for the meal and the consultant turned around and billed the client for the time spent at the restaurant. The client griped about it but paid the bill. I still laugh about this one every time it crosses me mind.
The first one that comes to mind for me was, “We can cancel the contract at any time. If we are unhappy with the progress of the project and cancel the project you will have to reimburse us for all money paid to you thus far, and the funds to fix the project.”