While it might seem like a minor point in what can otherwise be more substantive contract negotiations at the outset of a business relationship, wherever possible, you should insist on using your own contract. When negotiating a business relationship, it is common for both parties to have on hand their own version of a given agreement (such as a Licensing Agreement, List Management Agreement, and Lead Purchase Agreement). It is essential that you insist on using your own contract when you are ready to memorialize any joint venture, marketing partnership, or other business opportunity.
Your Contract, Your Terms
The reasons are simple, though significant: a properly drafted agreement by qualified legal counsel should put you at an advantage compared with your prospective business partner. In drafting a contract, your legal counsel will use the nuance of language to emphasize specific prioritized deal points. In addition, your counsel will design the contract to ensure that the agreement tilts in your favor in key sections (e.g., representations, limitations of liability, disclaimers of warranty, and indemnification). With your own contract, you can ensure that you are on a more advantageous footing when entering into a business relationship with a new or long-term partner. On the other hand, using the other side's agreement frequently puts you at a disadvantage for all of the same reasons.
It is true that you can undertake to review and revise the other side's agreement. However, you may miss a section that requires changing and/or you may not have free rein to make as many changes as necessary. Not to mention that you may incur legal costs in connection with the review and revision of the other side's contract.
Contract Negotiations, Dealing with Pushback
Despite the recommendations outlined above, there will inevitably be times, due to deal-specific circumstances, that you will be forced to use the other side's agreement rather than your own. In such contract negotiations, it is highly recommended that you retain qualified legal counsel to ensure that any agreement that you intend to sign is reviewed and revised in order to level the playing field. Further, counsel will remove the advantage that typically accrues to the party that drafted the agreement, with your attorney also flagging the key issues that may require pushback.
Signing the other side's agreement without retaining legal counsel to conduct a review is quite risky, given the ability of the party providing the agreement to frame the relationship.
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The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
