Don’t Signing Contracts Without An Attorney Review

I learned an expensive lesson a few weeks ago, and I wanted to share my story in the hopes of helping others who might otherwise do the same thing..

In August 2009, we joined an ad network that was offering us better terms than our current provider. CPM rates that were 50% higher, with guaranteed fill rates to boot! There was also talk about revenue sharing from some of the affiliate ads they were going to run across our network. In a time where other networks were struggling because of the economy, this seemed like a great move for us. The company was flush with funding from an industry heavyweight, and we couldn’t see a downside to the deal.

They sent over a 19 page contract, and it seemed like your standard stuff. It was a 2-year deal, and they wouldn’t go for a shorter duration. So after reviewing it, we signed it and started serving ads for the new company.

The first 9 months went pretty smoothly. There were a couple of payment hiccups along the way, but they usually got resolved in a timely manner. By the 1-year mark, we were starting to get concerned, as payments were consistently late, sometimes as much as 30 days behind schedule! So I started looking for other ad network providers, and told my current network that we were breaking the agreement due to repeated breach of contract.

This company went on the offensive, and immediately got their lawyers involved.. Threatening to sue us for damages that far exceeded the amount of money they currently owed us. At this point, I consulted our own legal counsel, who informed me that we were stupid to sign such a one-sided agreement without having it reviewed by our own lawyers.

WHOOPS! Our counsel walked us through the contract paragraph by paragraph, and showed us what we should have asked for. Lesson learned!

Moral of the story? Don’t sign any contracts without first consulting with an attorney!

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