Don't Get Burned: What to Look for Before Signing That Vendor Contract
- Tenon
- Feb 18
- 2 min read
Q: "I'm about to sign a contract with a new marketing agency. What are the absolutely critical things I need to check first?"
A: Great Question. Before you put pen to paper, you need to be a bit of a detective. Here are the four key areas to scrutinize:
Scope of Work (SOW): This is the heart of the contract. It needs to be crystal clear about what the vendor will do for you. Don't settle for vague phrases like "marketing services." It should specify deliverables, timelines, and milestones. If it's not in the SOW, don't assume it's included.
Payment Terms: When and how much do you pay? Are there milestones? What are the penalties for late payments? Make sure the payment schedule aligns with your cash flow and that there are no hidden fees.
Termination Clause: How can you get out of the contract if things go south? Can you terminate for any reason with notice ("for convenience"), or only if they mess up ("for cause")? You need a clear exit strategy.
Intellectual Property (IP): Who owns the work they create for you? If they're designing a logo or writing code, you want to make sure your company owns it right from the start. The contract should state this explicitly.
Disclaimer: I am a lawyer, but I am not your lawyer. The information provided here is for educational purposes only and does not constitute legal advice. Laws change all the time, so this information may be out of date or no longer accurate by the time you read it; you shouldn't rely on it without doing your own research. Every business situation is unique, so I strongly recommend consulting with a qualified attorney to discuss your specific needs.
