How to Use Modifiers When Negotiating a Contract

Contracts are a part of every entrepreneur’s journey, regardless if you are a freelancer, small business, or bootstrapped startup. When you are editing a contract, consider using the quick tips below to make things easier on you and the other party.

“Material”

Consider changing:

“The client may terminate this agreement if the contractor breaches any provision in this agreement”
to
“The client may terminate this agreement if the contractor breaches any material provision in this agreement.”

If you are the contractor, this is a good change because it means the client cannot terminate the agreement simply because you make a small error. It may add ambiguity in that you will later need to debate what breaches are “material” but in general, it reduces risk to the contractor without adding too much risk to the client.

“To Your Knowledge”

Consider changing:

“The contractor represents that there are no lawsuits pending or threatened against the contractor.”
to
“The contractor represents that, to its knowledge, there are no lawsuits pending or threatened against the contractor.

In this case, the contractor should know if there are lawsuits filed, and likely if there are any threatened, against it. But it can’t know with 100% certainty. Thus, adding the “knowledge” modifier reduces the contractor’s risk, while not increasing the other party’s risk too much.

“Reasonable”

Consider changing:

“The client shall respond to all of the contractor’s requests for information within two business days.”
to
“The client shall respond to all of the contractor’s reasonable requests for information within two business days.”

Here, the contractor likely needs information from the client to do its job and it doesn’t want to sit around waiting on that information forever. At the same time, the client probably doesn’t want to be on the hook to respond to an unreasonable request that would take it 20 hours to complete over two days. Thus, inserting “reasonable” decreases the client’s risk, while not adding too much risk to the contractor.

(This article is general in nature and is not legal advice. Image: Adobe/Visual Generation)