Your First Contract Negotiation

Mary Jane at Hot​Tech​Start​up​.com calls to give you the good news – the project is yours. You are both elated and surprised. ​“Great!,” you say. ​“What’s next?”

M.J., as she refers to herself, tells you that she’ll ​“send you Hot Tech’s vendor onboarding paperwork.” ​“Just take a quick look,” she says, ​“fill it out, and send it back. Then we can schedule a kickoff meeting with the project team.”

You’ve been in business for about a year. To date, everyone has just signed your very pretty and relatively detailed form of proposal. You and your partner have finished three projects, and they’ve all gone very well, with only minor scope creep issues and a few short payment delays.

“Ok; sounds good,” you say to M.J. ​“I’ll keep an eye out for it.” You hang up the phone, and immediately give your partner Sally the good news. She smiles, but instead leaves your high-five hangin’. You look at her quizzically as she asks whether M.J. said anything about Hot Tech’s ​“Master Services Agreement.” Sally is the more business-savvy of the two of you… by far. ​“No,” you tell her; ​“just some onboarding paperwork.”

“Uh-oh,” Jane responds. ​“Huh?,” you inquire. ​“I heard something from John over at Local Design Shop about Hot Tech’s M.S.A. and legal department,” she says. Jane goes on to explain that Hot Tech has a 25-page Master Services Agreement, and is represented by a big Silicon Valley law firm, chosen by Hot Tech’s lead investor. Long story short: she’s heard that both the agreement and Hot Tech’s lawyers are very unreasonable.

Pretty discouraged by the discussion, you return to your desk and see an email from M.J., but it’s not from her Hot Tech account. It’s been generated by something called ​“DocuSign.” You click the link that says ​“Hot Tech Vendor Onboarding Forms.” A new tab appears and opens in your browser of choice. You’re immediately asked to agree to consent to an electronic signing process. You pause briefly to consider whether you ought to consult Jane, and decide the better of it; you check the box and click the ​“Agree” button.

The background lightens and you see that the displayed page is a PDF – something called ​“Hot Tech Startup, Inc. Vendor Qualification Form.” It doesn’t look so bad; they just want some information about your company. There’s a bunch of blank fillable fields, and a place at the bottom for a signature by ​“Vendor’s Authorized Officer.” You think about the fact that this is actually a pretty cool interface, and you might want to use it for your proposals in the future.

The next page is an I.R.S. W‑9 Form; ok, you’ve seen that before. A few more fields, and another place to sign. There’s a link to the instructions for the form, should you want to review them…. [Yeah; cool interface.]

You scroll down, and there it is: the Hot Tech, Inc. Master Services Agreement. It resembles documents you saw back at Multistate Agency, LLC, your last employer, but you weren’t involved in the operations side of things there. With the exception of the bolded and capitalized document title, the font is too small to read without squinting. You next notice that the right-hand sidebar appears to indicate that this document is 43 pages. …. 43 pages!?!? [Shit… Sally was right.]

You quickly scroll through, and see that the first 25 pages are the actual MSA – John was right on the money, as usual – and the next 18 are four different exhibits: a form Statement of Work, and some corporate policy crap, including background checks with drug tests… You think: ​“Drug tests?!? Really?!? I’d fail that shit!”

You lean back in your chair, and just as you start to think that you might just fill out and submit the forms – Sally will understand – you feel your chair hit something. Startled, you turn; it’s Sally’s hip. ​“How long have you been standing there?” you inquire. ​“Long enough,” says Sally.

Welcome to your first contract negotiation.