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A public service announcement about contracts

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Every so often, when I am called upon to sign some contract or other, I have a conversation that goes like this:

Me: I can't sign this contract; clause 14(a) gives you the right to chop off my hand.

Them: Oh, the lawyers made us put that in. Don't worry about it; of course we would never exercise that clause.

There is only one response you should make to this line of argument:

Well, my lawyer says I can't agree to that, and since you say that you would never exercise that clause, I'm sure you will have no problem removing it from the contract.

Because if the lawyers made them put in there, that is for a reason. And there is only one possible reason, which is that the lawyers do, in fact, envision that they might one day exercise that clause and chop off your hand.

The other party may proceed further with the same argument: “Look, I have been in this business twenty years, and I swear to you that we have never chopped off anyone's hand.” You must remember the one response, and repeat it:

Great! Since you say that you have never chopped off anyone's hand, then you will have no problem removing that clause from the contract.

You must repeat this over and over until it works. The other party is lazy. They just want the contract signed. They don't want to deal with their lawyers. They may sincerely believe that they would never chop off anyone's hand. They are just looking for the easiest way forward. You must make them understand that there is no easier way forward than to remove the hand-chopping clause.

They will say “The deadline is looming! If we don't get this contract executed soon it will be TOO LATE!” They are trying to blame you for the blown deadline. You should put the blame back where it belongs:

As I've made quite clear, I can't sign this contract with the hand-chopping clause. If you want to get this executed soon, you must strike out that clause before it is TOO LATE.

And if the other party would prefer to walk away from the deal rather than abandon their hand-chopping rights, what does that tell you about the value they put on the hand-chopping clause? They claim that they don't care about it and they have never exercised it, but they would prefer to give up on the whole project, rather than abandon hand-chopping? That is a situation that is well worth walking away from, and you can congratulate yourself on your clean escape.

[ Addendum: Steve Bogart asked asks on Twitter for examples of unacceptable contract demands; dealbreaker clauses. Some I thought of

so many that I put them in a separate article. ][ Addendum 20150401: Chas. Owens points out that you don't have to argue about it; you can just cross out the hand-chopping clause, add your initials and date in the margin. I do this also, but then I bring the modification it to

immediately include: Any nonspecific non-disclosure agreement with a horizon more than three years off, because after three years you are not going to remember what it was that you were not supposed to disclose. Any contract in which you give up your right to sue the other party if they were to cheat you. Most contracts in which you permanently relinquish your right to disparage or publicly criticize the other party. Any contract that leaves you on the hook for the other party's attention, because that is the honest and just thing to do. ]

losses if the project is unsuccessful. ]

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tante
2441 days ago
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A public service announcement about contracts.
Berlin/Germany
marcelweiss
2422 days ago
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Berlin, Germany
popular
2441 days ago
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5 public comments
smadin
2417 days ago
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Remember not to sign anything that says the other party can chop off your hand.
Boston
reconbot
2436 days ago
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It's better to just not sign anything
New York City
Courtney
2437 days ago
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Attention everyone about to sign an employment contract: this goes for non-compete clauses and durations. Some of the "default language" I've been handed is utter garb.
Portland, OR
MotherHydra
2441 days ago
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Good info to remember during those pesky NDA discussions.
Space City, USA
toddgrotenhuis
2441 days ago
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Hand-chopping clauses
Indianapolis

Rückkauf von Staatsanleihen scheint erfolgreich

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Die Frist für den Schuldenrückkauf Griechenlands ist am Freitagabend abgelaufen. Ob das Rückkaufprogramm gelungen ist, blieb zunächst unklar - doch es sieht gut für die Griechen aus.


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marcelweiss
3279 days ago
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Berlin, Germany
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