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Contract Negotiation: Saving Time and Protecting Business Interests

by Global Link Law
May 21, 2024
contract negotiation

Startups often handle contract negotiation themselves to save costs, but this approach can have drawbacks. While prioritizing quick deals, they may overlook potential risks that could harm their business in the future.

Financial constraints are common in the early stages of startup growth, requiring careful resource allocation to reach critical milestones.

Despite their need for speed, startups must balance efficiency with risk management. Rushing into contracts without thorough review can lead to costly consequences down the line.

The Pitfalls of Rushed Deals

Prioritizing speed over thorough contract negotiation can lead to costly repercussions in the future. Take the following example:

A non-U.S. Digital Wellness App Provider secures a Fortune 500 client, offering access to 50 million new U.S. members. While this presents a significant revenue opportunity, it also involves obtaining valuable personal health data. However, if the provider signs the standard contract provided by the Fortune 500 company without negotiating key terms, it may inadvertently surrender its intellectual property rights, including any innovations developed during the service provision. 

Additionally, the contract may impose limited rights regarding the usage of the acquired data and expose the provider to unlimited liability. Given the potential consequences of a data breach, which can result in multimillion-dollar settlements, such an agreement could jeopardize the provider’s business viability. In the U.S., where the average cost of a data breach is $9 million (and often settlements reach double digits in the millions), a large-scale data breach could put it out of business.

Having a Strategic Partner Can Help You Make Informed Decisions

Consider a scenario where your company is not the service provider but rather the purchaser of a service. Imagine allocating a significant portion of funds for a project only to find that the service provider fails to deliver as promised. This failure not only results in wasted time but also raises questions about how to replace the service provider without additional costs. Does your contract adequately address these potential issues? Furthermore, what if the service provider delivers the product or service, but you later face allegations of intellectual property infringement? 

Upon reviewing the contract, you discover that the service provider’s liability is limited. In such a situation, who bears the financial burden of defending your company in a lawsuit? Are there alternative solutions available for the product or service on which your business heavily relies? Contracts play a crucial role in business operations, as they carry both value and risk. Having a strategic partner who can provide guidance on navigating these complexities and making informed decisions is essential in today’s business landscape.

The Value of Strategic Contract Negotiation Partnerships

Contracts play a crucial role in business operations, carrying both value and risk. Collaborating with strategic partners who provide legal expertise can educate businesses on potential risks and empower them to make informed decisions, mitigating future challenges in today’s dynamic business landscape. Contact Global Link Law to see how we can help with your contract negotiation.


The information provided on this website is for general informational purposes only and should not be considered legal advice. No attorney-client relationship is created by accessing or using this website. Please consult with a qualified attorney before making any legal decisions. Global Link Law is not liable for any reliance on the information provided. Prior results do not guarantee a similar outcome.

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