by Paul T. Cottey

Why IT needs, and even likes, lawyers

Apr 18, 2016
CIOLegalTechnology Industry

Any part of your contract that is in capital letters SHOULD be read by a lawyer.

I admit it. I don’t read anything in a contract in ALL CAPITAL LETTERS unless I absolutely have to. It is not because I can’t read. (I can.) It is not because it feels like the contract is shouting at me. (It is.) It is not because the language does not need to be read. (It does!) It is because the parts of a contract in all capital letters should be read by a lawyer or at least by an expert in contract law.

The parts of a contract in capital letters typically deal with warranties, remedies, indemnifications, limitations of liability, and other items which may constrain or alter materially what you think you are getting with the contract. The capital letters are supposed to make these provisions “conspicuous,” and they do. But that doesn’t mean I read them myself. So, even after almost 30 years of reading contracts, I still partner with a lawyer to review my contracts.

Here is what I do: I deal with the scope of the contract (who is going to do what, by when, with what quality, against what measures, etc.) and then I explain to my counsel (in-house or external, captive or by-the-hour) what I am trying to accomplish with the contract.

Counsel can then review the contract, including everything in capital letters, and ask questions like: “Are you OK that damages are capped at total fees?” “Is it OK that your only remedy for poor quality is having the re-work done for free?” “Are you fine with cost overruns being your responsibility?” “Is it OK that the consultant owns the intellectual property?” and so on. Your answers to these questions are often in the questions themselves, namely “No”, “No”, “No”, and “No” to the above questions. When that is the case, your counsel can propose modifications to the language, and now you are negotiating!

Capitalization does seem to work for me, all shouting aside, because it causes me to involve counsel. It might be nice not to be YELLED AT in a contract, but it is better than being yelled at later about a contract.