Don’t Sign Away Your Right to Negotiate a Better Deal
How many times are you asked to sign a contract for a service that you simply accept without reading? We all know that we shouldn’t do it, but we all do it from time to time. When it comes to signing an agreement with a supplier, however, it pays to look closely at the fine print. Most of us are familiar with “evergreen” provisions that automatically renew the agreement for three to five years if the customer doesn’t specifically give termination notice 60 to 90 days ahead of the contract’s end. Now there is a new provision that is beginning to show up in contracts that effectively prevents you from shopping for a better deal.
Typically appearing in the Confidentiality section of the agreement, the language prevents the customer (you) from sharing details of what you have purchased, prices you have paid, or even the name of your supplier to anyone during the term of your agreement. Breach of these terms can make you and your company liable for legal action. Agreeing to these terms essentially gives away your right to seek alternative bids with anyone — other suppliers, third-party consultants like ACC, business colleagues or any other group. In short, you’re stuck for up to five years.
The best approach is to keep any supplier contracts to two years or less unless there are compelling reasons to go longer, and be sure to read the terms to see if you are prohibited from sharing even basic information (such as a description of what you are buying) with others.
Don’t give up your right to look for a better price … you owe it to your company to get the best deals possible.