Contracts Red Flags

Contracts are guardrails on business relationships, but they're often imperfectly entered and imperfectly performed.

When working in a business relationship--governed by a contract, as most are--you'll sense when things are shifting, when things might not be working out as expected.

In any contractual arrangement, you should pay attention for red flags--for early warning signs, such as:

🚩 communication inconsistencies and breakdowns;

🚩 missed deadlines, or multiple requests to push deadlines;

🚩 unexplained changes in behavior;

🚩 noticeable decline in quality--evidence that the commitment to you and your company is faltering;

🚩 increasing disputes, conflict, or pushback;

🚩 late (or missed payments) and/or requests to change payment terms;

🚩 declining transparency;

🚩 requests to amend or renegotiate contract terms;

🚩 sudden or frequent personnel changes; and/or

🚩 sudden or increased negative feedback.

Listen to your gut. Trust your instincts.

Like any relationship (personal, professional, or in business), you'll notice shifts, even small ones.

Don't ignore them, but also: don't rush to terminate or send a notice of breach.

The first step should be to document the changes and ask why. You want, if at all possible, to maintain a line of communication, to seek opportunities to right the ship.

Businesses are made up of humans. Business people are, in fact, humans, too.

So, use your human (interpersonal) skills and instincts to guide your analysis and initial approach.

If that doesn't work, then, perhaps a demand letter is appropriate. More on that later.

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