Link To Guest Website: https://www.tbhr-law.com/
Title: “How Terms & Conditions Can Make Or Break Your Business Deals”
Guest: Mark Furman – Tarlow Breed Hart & Rodgers
Interviewer: Jeffrey Davis – MAGE LLC
Click here to read the transcript
Well, hello, everybody. Welcome back to Radio Entrepreneurs. Again, if you’ve forgotten my face, my name is Jeffrey Davis. I am a hosted Radio Entrepreneurs. Also. I am a founder CEO of Mage LLC, shockingly since 1985, providing executive leadership development, organizational work, strategic work, the family business transition work in that kind of shocked how long it’s been. Known this person on my screen, almost as long as we started the firm that I’m at a networking group myself many, many years ago, you looks exactly the same. And so I’m talking about the one and the only Mark Furman, a partner, I’m a member of the Tarlow Breed Hart and Rodgers.
A welcome back, Mark.
Hi, Jeffrey grey to be with you. You certainly look the same. And a, and as far as the way I look at it is time for an eye exam, Jeff. Well,
I remember, you know, they probably have a little bit more a gray suits and ties back then we all had suits and ties,
Mark (1m 4s):
Right? As well as hear or whatever. But anyway, so I want to talk today about, ah, the subject of terms and conditions, where we keep reading about all of the supply chain problems or the shortages of different parts and how hard it is to get them and, and how much more the costs all since the some combination of the beginning have tariffs a few years ago under the prior administration, and then the impact of COVID, which has been overwhelming.
Mark (1m 48s):
So I always tell clients, you know, can we take a look at your terms and conditions? ’cause if you are buying things or you’re selling things, these terms and conditions, one of the most boring subject for business owners have real life consequences in times like these, in fact, half of the cases that I’m getting now relate to these kinds of problems relating to the availability of goods. So I’ll give you an example of a, you know, somebody agrees to supply X parts at Y price, or what happens when the, some, the costs to the supplier exceed in some cases dramatically, what the supplier has agreed to sell them for your terms and conditions are going to decide how big a problem you have.
Mark (2m 54s):
And these problems can actually be threatening to the very existence of the business. You take the example of what happened with cost or the wood. Well, what increases in costs by for a hundred percent, five, a hundred percent people or more people who were committed to supply would under purchase orders. They had excepted under the original price. So what do they do when it’s going to cost them three times the amount that they can sell the wood floor. So what’s going to decide, well, if you terms and conditions, I give you an out a way that can save your business.
Mark (3m 40s):
And if they don’t, it puts you in the world of gray, where you may not be able to get out of the contract. So attend to your terms and conditions. You know, you don’t want to be relying on a hope in a prayer. Yeah, no, there’s
Jeffrey (4m 4s):
And you’re bringing it up a really important point. Okay, here, I’ll put on my consultant hat and my client is asking me about terms and conditions. I’m going to want to read it, to make sure that there is nothing to triggers the prospect from not doing the deal, because I’m concerned about building top line, but if you were reading it at the same time, you and I might have a debate. And a lot of times when I’m reading terms and conditions, there’s no lawyer involved
Mark (4m 30s):
In well that’s right. A year. And a reason that there is no lawyer involved in as many people don’t attach importance to it who were business owners. ’cause of course they want, they want the business, but like in all of, you know, the terms and conditions represents contracts. What’s the contrast between the seller and buyer and just like it. If you’re selling the business or buying a business or selling real estate and buying real estate, when you sell goods or buying goods, there’s this tension.
Mark (5m 15s):
We want to lock it in the other side, but you don’t want to be locked in. So it’s sort of more art than law in a way is how you do strike the right balance for you and, and your company. So they’re our, the, you know, express terms that relates to when you can get out of a particular contract, but there’s also things that indirectly impact a, you know, what are the ramifications of, of, of inability to perform things like our U if you are a supplier goods, you want your terms and conditions to a eliminate, a buyers chance to Sue you for as much as possible.
Mark (6m 12s):
So you’d want to have in there that you can’t recover indirect damages loss, profits, consequential damages, incidental damages. If you wanna kind of a drastically reduce the damages that you couldn’t be liable for you. We want to have a choice of law clause because we got 50 different states and the laws are different in different states. And the attitudes of courts are different. And the damages that are recoverable can be different. So the choice of law clauses is very important.
Mark (6m 52s):
Also a choice of forum clause were can any dispute B settled? Do you wanna be an arbitration, or do you want to avoid the possibility of somebody bringing a class action suit against you? Or do you want it to be re if you wanna be in court, if you want it to be in a forum, a state that’s most convenient to you, or do you want to be able, if you want the other side to be able to Sue you in the form, the state most convenient to it, none of this matters when everything goes great, when it does it go great, all this stuff matters.
Mark (7m 40s):
It matters on the costs of the fight. It matters on what your exposure is. It matters on weather. You can get out of the contract or not if it matters, but it’s boring. So even though it’s boring, I think it would be wise for business owners to it leased periodically, look at the terms and conditions at some point, have a well, I’ll call him a non, a deal breaker, lawyer. Talk me through the issues with him because you know, it, you don’t want a lawyer.
Mark (8m 22s):
Who’s just focused on the negative. If they want someone who understands business and understands the importance of the top line, as you say, because a, I have, I have to say without top line, you don’t have a business, but it at least. So you thought through when with the assistance or the pluses and minuses a different, different closets, and what you want is a buyer is different than what you want is a cellar.
Jeffrey (8m 51s):
Well, I think your making a good point, we thought we had some money on the show today. A it was in the food business and a unlike most of it as competition, he has increased is distribution a substantially, but a lot of people I know, or having trouble getting product and selling product and these low, and that’s even true from professionals is, you know, a lot of law firms like yourself are very busy to COVID. And so delivery responsiveness has changed for a lot of law firms and face-to-face meetings, court dates. So I think reviewing your letters of engagement, your contracts, everything I think are important because it’s just gonna to protect anyone from a potential liability or a receivable issue, a collection issue.
Jeffrey (9m 37s):
There’s a lot of problems that can come from that. And I think what you’re basically, I think you’re concept of being boring. His safe is a very smart, I know that you’re positioning statement for marketing a
Mark (9m 48s):
And Mr. Excitement, Jeffrey, you, as you know,
Jeffrey (9m 52s):
Well, I’m one of those few people actually does find you kind of exciting. And I don’t know what it says about me. So, so yeah, but if you’re right and these, these letters go out all the time, people don’t want them reviewed. I know for me personally, I’m not even an attorney. I have to say to someone, yes, yesterday, you should have me take a look at that. I’m already on retainer and you’re not paying for it that, and you know, the idea of bringing in it, you know, and they were always like, oh, I don’t want to send it to my attorney. What’s the bill going to be? But it’s nominal, nominal compared to the expense that it’s going to cost the firm.
Mark (10m 28s):
All right. If you can, if you can prevent a litigation, it’s, it’s incredibly valuable in a fit. If you have to bring sued and you have an attorney’s fees clause, that if the folks don’t pay you, that they’re responsible for your, a collection costs, including a reasonable attorney’s fees. If you have a default rate of interest in, in your terms and conditions, or all of these things are a helpful, as you tried to negotiate disputes, ’cause the goal is to stay out of court, to stay out of arbitration so that you can spend your time making money as opposed to dealing with historical problems.
Mark (11m 16s):
So anything that helps you a minimize the impact of historical problems on the business is worth an occasional investment. You know, these aren’t things you’re going to review every week, but if you do it once and make sure that they’re consistent with your business, as opposed to something you get caught on the internet, that has no relationship to your business. So our, our then, and maybe you look at it again in five years, the, the, you know, if it’s not a major investment, but it’s a important process to talk through.
Mark (11m 60s):
Jeffrey (12m 0s):
Always very practical advice from you, mark your, or a very practical person a again, and you can be found that the law firm of Tarlow Breed Hart in Rogers, but if someone wants to contact you directly, how would they do that? Mark?
Mark (12m 12s):
I can be reached at 6 1 7 2 1 8 2 0 2 5, or at MFurman@tbhr-law.com.
Jeffrey (12m 28s):
Thank you very much, mark. And we look forward to speaking to you every week on Radio Entrepreneurs.
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