Contracts...

[kdw75]

We have been dealing with our 4th largest client for over ten years, but over the last year, they have started sending us a lot more work that was previously going out of state. They have become our largest client and they pay when they order. We enjoy working with them and the people we deal with locally are the nicest people you could imagine.

Well, of course, that was too good to be true and for some reason, their national headquarters emailed the other day saying that they needed us to sign a 36-page contract ensuring that we had multi-million dollar insurance with them named as the beneficiary in case of a printing mistake and multi-million dollar policy with them as a beneficiary in case of cyber attacks resulting in us losing their data and finally that we erase all of their files after 30 days including emails, which our attorney said violated federal laws.

Their parent company deals with other printers that I know of which are far larger than us, with hundreds of employees and I wonder if they just sign the contract or if they go back and forth negotiating details. This contract isn't purely for printers, it is apparently sent to every vendor that deals with them. I would think that if they went to someplace like Apple and asked them to sign a contract like that they would laugh them out of the place, but maybe this is common and why places are always in court.

Have you had similar situations and how did you handle it?

 

[tngcas]

I've actually heard similar stories of this from several people now, but we haven't had to deal with it yet.
I imagine that your attorney's can add language that says something like "we agree to this contract except in instances where it violates local, state or federal laws." Then you're not saying no to anything but you're also not agreeing to violate laws.

The new ESG scores for large parent companies include their entire supply chain. There is a LOT of money tied up in these things and recent events are showing how exposed large corporations can be to mistakes made by companies in their supply chains.
It's a trickle down problem. They're being required by their customers to make sure their supply chain is tight otherwise if someone finds out that for example - A huge name brand company is doing business with a company that is also doing business with another company that can make the huge name brand company look bad then that can blowback on them online (social media).

If you want to get into conspiracy theory realms, people are saying it's a way for the giant corporations and/or government entities to control what businesses are doing indirectly. They can say they won't sign contracts/do business with people who won't sign the contracts and then they can force the mid-level corporations to force all the smaller businesses below them to sign similar contracts.

 

[kdw75]

Maybe I am a conspiracy theorist then, because my first thought was that this was that this was about making sure we were under their thumb. They don't want to deal with anyone they aren't in complete control of. Kinda like the mob in the old days. If you want to be successful and work in this neighborhood you have to pay protection money. lol My impression has been that you either sign it or we are gone. The local people pretty much said so.

 

[chriscozi]

which our attorney said violated federal laws.

Right here.

As you imagine they are being legal 'bullies.'
They will ask for EVERY thing they can get - expecting large corps to hammer the details and lil guys toeing the line.
So here is what you can do:
PAY for a good Contracts attorney (Big Customer, correct?)
DO what they tell you to do with the contract. They are the expert.
And you can make sure your atty understands any reservations you have about perceived business threats.
And you should ask them about everything you don't understand ABOUT the contract.
They should be willing to answer questions - if only as an hourly expense.
So yes your customer is costing you money vis a vis lawyers BUT:
You'll learn more about large businesses and their needs.
You'll convince the customer you are serious about their business.
And that should solidify the relationship.
In other words - act like a big Corp.
IANAL (I am not a lawyer)
YMMV (Your Mileage May Vary)

 

[tngcas]

Maybe I am a conspiracy theorist then, because my first thought was that this was that this was about making sure we were under their thumb. They don't want to deal with anyone they aren't in complete control of. Kinda like the mob in the old days. If you want to be successful and work in this neighborhood you have to pay protection money. lol My impression has been that you either sign it or we are gone. The local people pretty much said so.

I feel the same way about the union bug. It's all a racket to line someone's pockets.

I always get nervous about having any client become "too large" of a percentage of the business to the point where if we lose the client the business could potentially go under without it. We're careful to watch and make sure that we don't have too many eggs in one basket. I'd rather have a smaller basket than have one client be able to dictate/threaten our long-term stability.