This contract tip is not to be misled by the names of documents.
Some years back, one of my supply chain leads asked if he could sign a credit application. I asked to see it first and was quite surprised.
This document was labeled “Credit Application.” As expected, it had typical credit terms.
The problem was everything else in there. It disclaimed any warranties and capped liability for everything related to the sale at a minimum amount. It required signature and stated that it superseded any purchase order placed by my company.
I call this the contract bait and switch.
The document has a name that suggests it would just say X but in fact it includes Y and Z.
This contract bait and switch occurs with lots of different documents. I see it frequently with statements of work, letters of intent, credit applications, and work authorizations.
It is the nightmare for in-house counsel because it makes it so much harder to identify what needs review.
We don’t want to review every single document. But we also don’t want to miss something important slipped into a document with an innocuous name.
Don't be fooled. Train your team on what should be in these documents and to send you any that include other things.
Have you seen this happen with your clients or teams?
