The Contract Lurking Within: Read the “Fine Print”

A 60-page master services agreement from your high-profile, highly regulated corporate client lands on your desk. Your first thought: “This could be a great, high-paying client!” Your second thought: “I guess I have to read all of this first.” Yes…yes, you do.

Your eyes glaze over by the fifth page because it’s also in size 10 Arial Narrow font. Somewhere on the West Coast, your potential client’s procurement executive and general counsel breathe a sigh of relief because they have successfully created an unwieldy negotiation process that most service providers don’t want to deal with.

So, you skim. You hit the provisions that seem important: payment, termination, indemnification, limitation of liability, and you convince yourself that you’ve got the gist of it. Then, you sign.

Turns out the contract isn’t actually the 60 pages between the title and the signature page.

Section 7.3 incorporates an online privacy policy by hyperlink. Section 11.2 is “subject to” Section 14.6. Exhibit B quietly contradicts high-level terms in the body, including payment terms, data privacy requirements, and insurance limits. Don’t get us started on those innocuous terms incorporating the client’s “then-current service provider policies and procedures.” Those actually live somewhere on a website, can change while you aren’t looking, are dynamic, and contain another 30 pages of obligations you never read.

The point is simple: the agreement you sign may only be the beginning of the agreement you actually made.

Cross-references are easy to breeze past, particularly when you are already 40 pages deep. But phrases like “subject to Section 12.4,” “except as otherwise provided herein,” and “notwithstanding the foregoing” require a second look. These are signals that there is more than meets the eye.

A seemingly broad termination right may be subject to a notice-and-cure provision somewhere else. A representation may look innocent until you follow a defined term through two other definitions and discover that its scope is considerably broader or narrower than you would have liked. If a provision sends you somewhere else, go there and make sure where you land matches the deal you thought you were making.

Those of us who grew up during the birth of the internet were trained not to click suspicious links. Contract review, unfortunately, requires us to unlearn that lesson. Hyperlinks deserve their own special place in contract review purgatory.

Modern agreements routinely incorporate privacy policies, information security standards, vendor codes of conduct, acceptable use policies, technical requirements, and other electronic terms and conditions by reference. It is tempting to treat the hyperlink like a footnote or assume it’s the contractual equivalent of the terms and conditions you definitely, absolutely read before clicking “I Agree” when downloading an app.

At a minimum, get curious and ask yourself: What exactly am I agreeing to? Which version applies? Can the client change the policy after signing? Will I receive written notice if it changes? And does the contract require me to comply with whatever changes that may be made “from time to time” even if those changes materially alter the terms of my agreement?

If the answer to that last question is yes, take a moment and consider the appropriate guardrails needed there.

The exhibits and schedules tend to come after the signature page, which psychologically makes them feel less important. Contractually, that is often very much not the case.

Picture this: the MSA says invoices are payable within 30 days. The order form attached to the MSA says 60. The MSA caps liability at fees paid during the preceding 12 months. The data-security exhibit says liability for a security incident is unlimited.

Which one wins? The answer shouldn’t live in your head; put it on the page.

The biggest traps are not necessarily hidden in microscopic text or buried on page 57.

The moral of the story: some of the most consequential terms in an agreement are hidden in plain sight. So, go ahead and follow the cross-references and review the exhibits (even if it means reading another 30 pages of tiny font).

And if you ever find that your eyes are indeed glazing over while reviewing an agreement, we can’t promise to make size 10 Arial Narrow any easier on the eyes. But as always, if you’ve got questions, you know we’ve got answers!

~ The W + K Team