S.T.O.P. and READ

Transcript

ELIOT WAGONHEIM: If you are confronted with a contract, meaning somebody has asked you to sign theirs, what I tell my clients is to S.T.O.P.

"S" stands for "scope of work" - meaning, what does that contract hold you responsible to do? Just because you and I may actually talk about something and I may walk away from that conversation with an expectation that I understand what the scope of work is, it does not matter what you and I discussed because what is in the contract is what I am going to be judged on.

The "T" is the "time of performance." Can I do what the contract says I should do within the time specified? I may expect that I only have to finish my work by June 30th, but the contract may say either to finish your work by March 1st or you have to finish your work 30 days after Tom Smith finishes his work. And, because that is a variable I cannot control, I have to make allowances for the fact that according to the contract my time of performance is going to be much faster than I originally assumed.

"O" in S.T.O.P is for "other documents." Certain contracts may say such and such agreement is "incorporated by reference herein as a contract document" and that is a big legal phrase and most people's eyes glaze over when they see the word "herein" or "wherefore" or "thereto" or any of those combination words. But it is an important sentence because what it means is your agreement is not just what is in front of you in the pages that you are reading, but some other document outside of the pages that you are reading is actually deemed to be part of the agreement that you are going to be signing.

Do you know what that document says? If you do, that is great then you understand your risks and you can move on. But frequently people do not know. They have never read that outside document.

The "P" is "payment." For businesses that is where the rubber meets the road. How much am I going to get paid? When am I going to get paid? What happens if I do not get paid? What are my rights? If I perform 90% of my scope of work and then the other 10% through no fault of my own is postponed or eliminated from the scope can I get paid or do I have to wait until everything is finished for me to get the first dollar?

S.T.O.P.!

So I tell my clients, if they run through those four analyses, at least they are signing an agreement that they fully understand.