What Can Meatloaf Teach Us About Avoiding Contract Redlines?
As Meatloaf teaches us: “I would do anything when drafting a contract, but I won’t do that.”
So what won’t Meatloaf do? Here’s my guess…
He won’t hide indemnities
Here’s an example.
Check out this clause about change orders:
Any modification will be set forth in a change order (“Change Order”). Client agrees to pay Vendor according to the terms of the applicable SOW, as modified by the Change Order, for any work done…and to indemnify Vendor for all claims and actions by third parties for damages and expenses that result from carrying out Client’s instructions.
Whoa!
You’re reading a clause about change orders and then BAM!
That indemnity comes flying out of that clause like a bat out of hell!
The problem isn’t necessarily the indemnity itself (although it is very broad).
The problem is that the drafter buried the indemnity in the last sentence of a paragraph about change orders.
That’s one of the last places I’d expect to see an indemnity.
By hiding the indemnity in the change order clause, the drafter:
Now, not only am I going to redline the indemnity, I’m going to distrust the drafter while I review the rest of the contract.
And because they lost my trust, I’m more likely to redline something else that I otherwise might have OK’d.
The end result?
More redlines.
So what could the drafter have done differently?
They could just put this language in the indemnification section.
That way, I wouldn’t have been surprised.
That way, I may still redline the indemnity, but I’m more likely to accept it or at least negotiate it because it wasn’t hidden.
Conclusion
So if you’re drafting a contract, be like Meatloaf and don’t hide your indemnities.
What else do you think Meatloaf won’t do when drafting a contract?
So what won’t Meatloaf do? Here’s my guess…
He won’t hide indemnities
Here’s an example.
Check out this clause about change orders:
Any modification will be set forth in a change order (“Change Order”). Client agrees to pay Vendor according to the terms of the applicable SOW, as modified by the Change Order, for any work done…and to indemnify Vendor for all claims and actions by third parties for damages and expenses that result from carrying out Client’s instructions.
Whoa!
You’re reading a clause about change orders and then BAM!
That indemnity comes flying out of that clause like a bat out of hell!
The problem isn’t necessarily the indemnity itself (although it is very broad).
The problem is that the drafter buried the indemnity in the last sentence of a paragraph about change orders.
That’s one of the last places I’d expect to see an indemnity.
By hiding the indemnity in the change order clause, the drafter:
- defied my expectations
- lost my trust
- burned through their Drafting Capital
Now, not only am I going to redline the indemnity, I’m going to distrust the drafter while I review the rest of the contract.
And because they lost my trust, I’m more likely to redline something else that I otherwise might have OK’d.
The end result?
More redlines.
So what could the drafter have done differently?
They could just put this language in the indemnification section.
That way, I wouldn’t have been surprised.
That way, I may still redline the indemnity, but I’m more likely to accept it or at least negotiate it because it wasn’t hidden.
Conclusion
So if you’re drafting a contract, be like Meatloaf and don’t hide your indemnities.
What else do you think Meatloaf won’t do when drafting a contract?