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The typical vendor agreement is often one-sided and fundamentally unfair. I don’t sign them and neither should you.

I don’t mean to imply all agreements should be avoided. We use them in our coaching and digital marketing businesses. We strive to make them fair to both parties and easy to understand. There are many situations where written agreements are unavoidable, like real estate transactions.

The problem

Vendors often use a “standard” agreement or one drafted by their attorney. They are intended to protect the entity that paid for the drafting. They make no pretense about being fair. Unfortunately, many people will just sign these agreements, without understanding the consequences.

Unreasonable clauses

There are a number of unreasonable clauses in “standard” agreements. This is just a sample.

Indemnification

These clauses shift the risk from the vendor to you. You agree to hold them “harmless” from various types of liability. This can include liability for their attorney’s fees.

I never agree to these clauses. If I do something wrong and cause harm to the other party, prevailing law gives them a claim against me. Under the American Rule, each party pays their own attorney’s fees.

Indemnity clauses are inherently unreasonable and often unnecessary.