When you refuse to sign the client’s contract…

Alisa BonsignoreI walked away from a contract today.

We had already come to a handshake agreement on deliverables, dates and fees. “But before we get started, we’ll need you to sign our master services agreement (MSA) and nondisclosure agreement (NDA).” While I have a contract of my own, they argued that their contracts superseded mine.

The documents were handed off to me late on a Friday afternoon. I spent two hours of my Sunday evening reviewing and carefully noting problematic sections and editing them per earlier advice from an attorney who warned me about red flags and how to counter them. Why Sunday? Well, the deadline was tight and I wanted to be able to hit the ground running on Monday. I returned the eight-page MSA and four-page NDA to the client and that’s when the pressure began.

Evidently “no one makes changes to the MSA” and a review by a panel of corporate attorneys “could take weeks,” a time frame that the project simply didn’t have. I knew that this was just a ploy to try to get me to reconsider my position and blindly sign the papers. So I had to decide: was it worth the paycheck even if the terms were potentially harmful to me?

I read through the documents one more time. The MSA contained terms that would be potentially damaging in the long term, but also were impossible and financially unreasonable in the short term (requiring $3,000,000 in liability coverage specific to my work with this client).

I stressed about it. I worried. I played out all of the scenarios in my head. Ultimately, I decided to forego the paycheck. I left a voicemail and email for my contact explaining that I needed to walk away because my changes were non-negotiable. And what do you know: within minutes I was told that the attorneys were “reconsidering” my edits and would get back to me ASAP.

I don’t know how the negotiations will end, but now that I’ve accepted that it’s ok to walk away, there’s no more stress. I’m in control of how the situation will work out.

Have you ever walked away from a project because of onerous contractual terms?

2 thoughts on “When you refuse to sign the client’s contract…

  1. Anne C. Kerns, AIGA

    Thanks for the post, Alisa. I have successfully negotiated two client-initiated contracts to make them better for me, and acceptable. For one that had a higher “paycheck” I had my attorney review and advise; one that was a lower “paycheck” I revised myself. They accepted some aspects, not others. I was okay with that.

    I do find it somewhat ironic that lawyers who write this stuff will put in a contract that the project is “work for hire.” They, above all, should know that just saying something is work for hire doesn’t make it so. And I always remove verbiage that says they have a right to preliminary work (sketches or comps).


  2. DS Webster

    I couldn’t agree more that it’s a good idea to walk away from jobs that involve less than fair terms for the vendor, especially in cases where the company asking you to agree to those terms is not willing to negotiate.

    You did the right thing by politely turning away the work. Most of the time that’s all it takes to convince a company that they might want to rethink their position.

    The 3 red flags I always look out for in contracts are:
    1) Company retains all copyrights. This model strips away your right to reuse your source materials such as code, negatives, etc.

    2) No compete clauses. Getting locked into no compete clauses can prevent you from taking on new opportunities with companies in the same industry.

    3) Discounts resulting from project delays. One company asked me to sign a contract stipulating that they were entitled to a 10% discount for each day that any deliverable was overdue. Ironically, in that same conversation, they wanted to “verbally” add two out-of-scope deliverables to our original agreement.

    Ultimately, if you set the paycheck aside and take the time to review these kinds of documents you’ll find yourself avoiding a lot of sticky situations.