"Education is when you read the fine print..."

“Education is when you read the fine print. Experience is what you get when you don’t.” -- Pete Seeger

December 21, 2009—

I never thought I’d be quoting Pete Seeger in a business context. Maybe that’s because I knew of him from a prior lifetime, when I lived and breathed folk music. But truer words were never spoken, and I would guess that Pete learned this from unavoidable contact with the cutthroat side of the music business.

If you’re a business owner, it pays to pay attention to that fine print, whether it’s the “terms and conditions” printed on the back side of a purchase order form, or the insurance and indemnification provisions of a construction contract. I’m not an attorney, but I’ve worked with some great ones in areas that have included (but are “not limited to”) trademark infringement, labor & employment, and construction. As one attorney remarked, regarding extended negotiations on a five-million-dollar agreement, “a contract is like a battle plan. Hopefully, you don’t have to invoke its provisions, but if something goes wrong in the project, at least the rules of engagement have already been established.”

The “handshake” part of a business agreement IS important. The best-written contracts may be worthless if you’re dealing with a snake. But company owners sometimes suffer unanticipated consequences because they are too impatient to “read the fine print.” Instead, they focus only on the scope of work and the price and payment terms of the agreement, when they should negotiate the language that they view as “just boilerplate.”

Contracts are important in any industry, but in construction, the liability issues and how they are addressed in the “fine print” are especially important, since many construction projects have inherent risks of worker injury and of property damage. And if a business, by failing to read and negotiate the “fine print,” gets socked with more than its fair share of liability and costs from an accident, that business suffers financial consequences that include legal fees and higher insurance rates.

So take the time – and spend some up-front dollars – to review that fine print and to understand both the business and legal consequences of what’s in that contract.

-- Steve Caccavo, President of Constructive Business Solutions™, draws on his years of entrepreneurial experience to help owners strengthen and grow their small and mid-size businesses. © 2009 by Constructive Business Solutions™, a division of Positive Employment Practices, Inc.