4 Contract Issues Keeping You Up All Night4 Contract Issues Keeping You Up All NightYour Contracts MatterWritten by Craig M. Kaiser, Founding Partner Written by Craig M. Kaiser, Founding Partner Written by Craig M. Kaiser, Founding Partner Are legal contract issues keeping you up at night? Many CEOs, CFOs, and business owners have one thing in common: they lose sleep at night thinking about the what-ifs that could derail their companies. The stock market, employee dissatisfaction, industry competition, or changes in technology can all cause an impact. At any given moment, if you’re a business leader or owner, you carry all of the scenarios that are in and out of your control when it comes to keeping a business afloat. One of these midnight-hour concerns we often hear about as contact lawyers at our law firm are legal contracts. A Fortune 2000 company has as many as 40,000 active contracts at any given time. You probably have legal agreements between your business and vendors, contractors, building leases, technology services, the list goes on. For most of your operations, a legal contract will be required and for someone who isn’t a contract lawyer by trade, this can be quite daunting. Consider the numerous cases where companies have lost millions due to something as simple as a single comma in a contract. For example: A case involving Oakhurst Dairy resulted in a $5,000,000 settlement due to one misplaced comma. In 2014, the famous Caesar’s Casino fought a $450,000,000, no-holds-barred war with investors that turned on the word and. In 2007, Rogers Communications of Canada, the nation’s largest cable provider, won a lawsuit over a contract worth $1,000,000 that hinged on the placement of a single comma. A case in which a single letter typo in a dense, 732-page offering plan cost Extell Development Company and the Carlyle Group tens of millions in lost revenue. In 2013, Bertha, the world’s largest tunneling machine came grinding to a halt after overheating. Contract disputes due to vague language in the contract over who would be responsible for the repair led to repair and delay costs estimated at over $480,000,000. "As contract lawyers --- your legal contracts matter." --- CRAIG M. KAISER, HOUSTON BUSINESS ATTORNEY Your legal contracts matter. As contract lawyers who have been in the industry for a long time, we’ve noticed several common areas where business owners and CEOs tend to worry about their contracts, wondering if they are vulnerable to these risks. Fortunately, simply being aware of these risks and having legal counsel on hand could save your company millions, in dollars and headaches. 4 Legal Contract Issues Keeping You Up At Night 1. Dates and Deadlines Dates and deadlines in contracts specify delivery of work, how long the contract is viable, when payments are due to which parties, and more. Missing these deadlines can nullify a deal and put you at great legal risk. Knowing that you have expert legal counsel handling your contracts ensures you will not miss a deadline. Additionally, if your agreement has expired but you have, say, a vendor on an autopay system, you could risk revenue leakage you don’t even know about until it’s too late. Working with an expert to set deadlines you and the other party both feel comfortable with and can stick to will protect you from unnecessary revenue loss. 2. Security While it’s important for contracts to be accessible and easy to find by upper- and lower-level employees, depending on the circumstances, digital contracts do undergo the risk of data security breaches which are becoming far too common. Knowing how and where to store your legal documents in a way that is safe and still accessible is key. As contract lawyers, we deal with this on a daily basis and can help guide you to a system that works for you, so you are not stuck without access to a contract when you need it, and your documents are not at risk for being accessed by those who have no business accessing them. 3. Compliance When it comes to business operations and developing new legal contracts, you must be familiar with both regulatory and operational compliance. Regulatory compliance is government-mandated regulation such as HIPPA or Sarbanes Oxley. Operational compliance are regulations specific to your company. In all of your contracts, clauses and terms that comply with both regulatory and operational compliance should be included. This can be tricky to keep track of and will require the highest level of legal contract expertise. 4. Reputation If one of your deals goes bad, your reputation is at stake. Consider Facebook who recently lost $150 billion of market value due to the Cambridge Analytica scandal, in which the latter company used Facebook users’ personal information illegally, violating a contract they had with Facebook. Facebook is still dealing with what turned into an incredibly costly PR nightmare. Every time you sign a contract, your business’s reputation is at stake. If you fail to avoid loopholes and pitfalls, set realistic dates and deadlines, or don’t store your contracts in a safe way and put them at risk of exposure, your reputation could be ruined as well as your bottom line. (Crisis PR firms and lawsuits aren’t cheap.) We know that contracts can either keep your business safe and running or do the opposite. This is why having sound legal experts in the room when you’re drafting and signing each one is so crucial. Get expert contract lawyers on your side It’s good to be aware of these four vulnerabilities when signing and creating contracts, but you don’t have to lose sleep over them.