Media Center

Media Center

If you want contract amendments done right, draft them yourself

Telecom and IT vendors are quick to supply contract forms, and then to insist on working from them.  That puts the onus on the buyer to catch the “gotchas” and one-sided terms that the vendor inserted, a task that can be exhausting and penalizes the unwary or eager.  As any negotiator knows, the author of the first draft has a substantial advantage.  It’s an inertia thing—anything the other side wants is a change.

Unless you are doing a very large deal or working with a small vendor, it can be very difficult to get the vendor to work from your draft of the master agreement—so you’ll likely have to slog through their paper, hopefully with the aid of someone who’s done it before.  But amendments, which by their nature are shorter and less complex, are another story.  

Here’s one recent example.  A client asked us to help them negotiate an amendment to their existing—heavily negotiated—contract.  They advised us of new business agreements on a handful of issues; the rest of the existing contract was to remain intact.  But even though the agreed changes should have taken at most a couple of pages, the vendor’s first draft was 15+ pages long.  At first glanced it looked like the vendor was just restating parts of the deal, but analysis revealed that it had actually changed a lot of things, including increasing rates where no rate increase had been discussed (much less agreed to).  And it hadn’t amended the document to reflect all of the things that the parties had agreed to.  

What can a buyer do?  Next time you need to amend an existing telecom contract, pick up a pen, write up your understanding of the business agreements, and insist that the parties work from your draft.  If the vendor disagrees with your understanding of the deal as reflected in the amendment, address those concerns directly.  If the vendor tries to introduce new issues (like raising prices on services that weren’t discussed), you’ll be on the high ground when you respond that the deal is done.  You may not get a perfect outcome, but you’ll benefit from turning the tables.