You Signed It. But Did You Know What You Agreed To?

A client came to me in a tough spot.

She had signed a services agreement without having an attorney review it first. At the time, it felt fine. The relationship was good, the work was moving, and reading through a lengthy contract was not at the top of her list. So she signed it and moved on.

Then she realized that under one statement of work, she was losing money. And not a little bit of money, but a lot of money.  And every month, the numbers got worse.

And when she finally sat down to look at the agreement to figure out how to get out of it, she realized that she had no right to terminate the statement of work where she was hemorrhaging money. She was locked in unless she wanted to terminate the entire relationship. So the losses were mounting, and the agreement she had signed…without reading it…without having counsel review it…gave her no exit.

What no exit actually looks like

I want you to sit with that for a second.  Imagine building your business, doing the work, showing up every single day, and then finding out that one of your agreements is quietly draining you with no way out.

That is not a hypothetical. That is exactly what was happening.

We had to go back to the other side and negotiate an amendment that gave my client something that was never in the original agreement because the original agreement was never read!

It was not a given that the other side would agree. They could have said no. And if they had, my client would still be in that situation today.

But the other side agreed and the termination right got added. She got the out she needed and should have always had.

But here’s what you need to understand: that resolution only happened because the other side was willing to come back to the table. That is not always how it goes.

The exit she needed was not in the original agreement because the agreement was drafted by the other side and the other side is not required to consider the other party’s interests.  And the client did not have someone in her corner before she signed who would have had her interests at heart and been able to identify the huge gap.

Now let me tell you about my best friend

This one is a little lighter. But the lesson is the same.

My best friend handles my bookkeeping and accounting. She goes through my QuickBooks, makes sure everything balances, and works with my CPA when needed. She is amazing at what she does and I trust her completely.

So when I brought her on, I sent her an independent contractor agreement. It was a tailored version – shorter than my standard – but it was still eight pages. She called me almost immediately to say, "Mel…what is this? I need something shorter."

I told her it was already on the shorter side for what it was covering.

Her response “Yeah…I’m not reading all of that!” 😊 And then she signed it.

Now…fast forward a couple of weeks. She reached out to me about getting the invoice paid that she had sent me at the beginning of the month when she signed the agreement she didn’t read. She I pulled up the agreement and pointed her to the payment terms that said that the invoice would be paid within 30 days of the invoice date. We had not come close to that date yet.

Her response?

"Okay. Gotcha. As you know, I did not read the agreement."

We cracked up! (Side note: Months later – she still hasn’t read it, she’s still thinks an 8-page contract was uncalled for, and we still crack up about it!).

Laughter aside…think about what just happened. She had signed a document that governed exactly when and how she would get paid and she had no idea what it said until the moment it mattered.

Now in this case, everything was fine. The terms were fair, I was not trying to take advantage of anyone, and it worked out. But what if it had not been me on the other side of that agreement? What if the payment terms were 60 days or 90 days? What if there had been a clause that limited what she could invoice for?

She would not have known. Because she did not read it.

The pattern underneath both stories

These two situations look completely different on the surface. One involved significant money and a negotiation to get a client out of a bad situation. The other involved my best friend and a payment terms conversation that made us both laugh.

But underneath both is the exact same thing.

Someone signed an agreement without fully understanding what they were agreeing to. And at some point, that agreement governed a situation they were not prepared for.

This is not about being careless. It is about being busy. It is about trusting that because someone handed you something, or because it looked professional, or because you just needed to get moving, it was probably fine.

Sometimes it is fine. And sometimes it is not. And the hard part is that you usually do not find out which one it is until you are already in the middle of it.

Is this you?

Have you ever signed something because it felt like too much to get through? Because someone you trusted said it was fine? Because you needed to move fast and reading the whole thing felt like a luxury you did not have?

I am not asking to make you feel bad about it. I am asking because I want you to think about it for a second.

The agreements sitting in your files right now – the ones someone handed to you and you’ve signed, the ones you’re sending to clients – do you know what they actually say?

Because knowing is the first step to being protected. And you deserve to be protected.

Drop it in the comments and tell me. Have you ever signed something you never actually read? What happened? I want to know!

Mel

Since 2022, small business and healthcare attorney Mel Green has helped many small businesses write good contracts. She knows the perils that come with many of the common contracts. She can help you write contracts that will protect your business and preserve good relationships with your clients and business partners. She can review contracts offered by others to help you avoid any onerous terms that will be destructive to your business. She also offers a wide range of other legal services to protect your business from drafting business formation documents to securing your intellectual property.

To get Mel’s help with business contract law, please contact us today. MDG Law Virtual serves clients in Chicago, IL and the surrounding areas, Lansing, MI and the surrounding areas, and Cincinnati, Ohio and the surrounding areas.