If It Cannot Run the Deal, It Cannot Protect the Business

By Tanzi Cannon-Eckerle, Esq.

Contracts are supposed to reflect the ‘meeting of the minds’ of the contracting parties. Yes, that is a legal term. It means the contract is supposed to be well thought out, and that, when Monday morning arrives and something goes sideways, as it inevitably does, both sides should understand the deal the same way.

A contract should not be a stack of recycled clauses, optimistic assumptions, and whatever someone copied from the last transaction. It should be a negotiated operating framework that turns business expectations into actual obligations, decision rights, escalation paths, and exit routes. If the document does not tell the business what performance is expected and what happens when performance slips, costs rise, or milestones move, it is not done. It is simply signed. And those are not the same thing.

By the way, I have heard from many business owners that they do not want to jinx the deal or upset the other company by negotiating or making changes to the contract. Negotiating material terms of the contract is not an offensive act. It is a thoughtful and prudent act, and it is expected by the courts. Furthermore, most companies want to do business with savvy companies that have transparent and honest business practices. A heavily negotiated contract is the epitome of transparent — when you draft what you mean.

When the Contract Is Vague, the Dispute Is Already Brewing

Most contract failures do not begin with villains or cinematic betrayal. They begin with imprecision. Most people leave the signing table thinking the business terms are clear, and then the team responsible for delivery opens the agreement and finds words like ‘timely,’ ‘reasonable,’ ‘commercially acceptable,’ and ‘best efforts.’

“A contract should not be a stack of recycled clauses, optimistic assumptions, and whatever someone copied from the last transaction. It should be a negotiated operating framework that turns business expectations into actual obligations, decision rights, escalation paths, and exit routes.”

Those are legal terms with legal meaning for sure. But for operational purposes, those phrases are only workable right up until a launch date slips, a service level is missed, or a deliverable turns out to be neither clearly defined nor practically achievable. The terms need to be clearly defined in plain language and measurable. Otherwise, operators are set up to fail, and a dispute is teed up for the first round of litigation.

What smart leaders do instead: they force the contract to say what the deal actually is. Deadlines. Service levels. Acceptance criteria. Payment triggers. Dependencies. Who approves what. What happens if any of those things fail. If a supplier reads a delivery date as aspirational and the customer has built a production schedule around it as fixed, the dispute did not begin later. It began in the drafting. The same goes for “full onboarding support,” “industry standard quality,” or “small event.” Those are not terms; those are opinions. If the contract leaves core obligations to assumption, the parties are not aligned. They are simply optimistic. Draft what you mean.

Boilerplate Is Where Leverage Hides

Executives sometimes treat boilerplate as background noise — the legal equivalent of the fine print nobody reads on the back of the shampoo bottle. That is a mistake. Those supposedly standard provisions often determine where a dispute gets decided, how notice must be given, whether a missed deadline can be cured, what damages are recoverable, and whether a party can force performance or is left holding a claim for money after the operational damage is already done. Boilerplate is often where the real allocation of business risk is hiding in plain sight. Don’t just cut and paste.

I have seen contracts Frankensteined together from well-loved templates where one clause requires litigation in Massachusetts and another mandates arbitration in New York. That is not efficiency. That is deferred cost wearing a nice suit. The same is true when a company signs a form saying time is ‘of the essence’ while the internal team is quietly thinking, ‘well, within reason.’ If the contract says one thing and operations is prepared to do another, legal will eventually be cleaning up the misunderstanding with invoices attached.

The operational takeaway: treat every clause that affects timing, money, remedies, notice, forum, exclusivity, or termination as a business term. If it changes leverage when something goes wrong, it is not filler.

If You Did Not Negotiate the Exit, You Did Not Finish the Deal

A surprising number of contracts explain (at length) how to begin a relationship and then get very coy about how to end one. That is a problem. There is nothing wrong with a prenup. Every meaningful agreement should address not only termination for cause and termination for convenience, but also what happens when one party signals ahead of time that it is not going to perform. That is called ‘anticipatory breach.’

It is not letting anyone off the hook, either — it is smart and practical and anticipates that things happen. If your supplier tells you in June that it cannot possibly make a September delivery, you should not be forced to sit there politely until the formal breach date arrives like some sort of legal waiting room. 

What belongs in the contract: clear, practicable, and articulable exit rights. Who can terminate, on what grounds, after what notice, with what cure period, and with what post-termination duties. Can the customer walk for convenience on 30 or 60 days notice? Does the vendor get paid for work properly performed and non-cancelable commitments? Is there transition support or data return? And if anticipatory breach is in play, define what statements or conduct count, whether adequate assurances can be demanded, and how long the other side has to respond.

Remedies Deserve the Same Level of Practical Thinking

If delay creates measurable but hard-to-prove harm, liquidated damages may make sense, but only if they are drafted as a reasonable pre-estimate of likely loss. In real life, that means tying the number to something you can explain with a straight face: downtime costs, lost margin on delayed production, replacement costs, service credit exposure, or the carrying cost of idle labor and equipment. Where money is not enough, the contract should also preserve the right to seek specific performance and injunctive relief. Courts do not hand those remedies out automatically. If they matter, draft it.

A Signed Contract Still Needs an Owner

Even an excellent contract can fail if nobody owns execution after signature. This is why contract management should not be treated as clerical aftercare. It should be part of someone’s official duties, with authority and accountability to monitor milestones, approvals, change orders, notice deadlines, renewal dates, pricing adjustments, service levels, insurance certificates, and termination triggers. Once the agreement is signed, someone should be responsible for translating it into operational reality for the people who now have to live inside it.

What that looks like in the real world: a company misses an automatic renewal cutoff because no one owned the calendar, and suddenly it is committed to another year of underperforming service it never wanted. Strong contract management does not eliminate risk. It catches the problem before it grows teeth.

What Smart Operators Negotiate Up Front

For CEOs and COOs, the playbook is not academic. It is operational discipline in legal form:

• Write in executable terms. If the people running the deal cannot tell what happens next, the document is not ready.

• Negotiate for failure, not just success. Define what counts as breach, anticipatory breach, delay, non-conformity, and inadequate assurance.

• Build an exit before you need one. Termination rights, cure periods, transition support, data return, and payment consequences should be explicit. This is not expecting failure; it is just being prepared.

• Match remedies to real business harm. Use liquidated damages where losses are hard to measure, and preserve specific performance or injunctive relief where money is not enough.

• Assign an owner after signature. Contract management should be an actual responsibility, not an assumption. It is an essential function. 

• Document changes while the relationship is healthy. If scope, pricing, or deadlines move, the paper should move with them. Review contracts often. 

Heavily negotiated contracts are often the cheapest contracts a company will ever sign. The time spent clarifying scope, defining remedies, pressure-testing exit rights, and aligning the document with actual operations is almost always less expensive than litigating ambiguity later. A good general counsel does not just mark up clauses and hand back a cleaner draft. The job is to translate business reality into contractual architecture that protects the company when the relationship is working — and when it is not.

The Bottom Line for CEOs and COOs

Most contract disputes do not begin with dramatic table-flip moments. They begin with avoidable ambiguity, weak ownership, and a document that never captured how the business expected the relationship to function in real life. A contract must clearly express the deal, define the early warning signs of failure, and provide a practical off-ramp when performance breaks down. When that work is done well up front, companies spend less time arguing about what they meant and more time doing what they set out to do.

For more information about drafting contracts or fractional general counsel services, reach out to Tanzi Cannon-Eckerle at General Counsel by Cannon, PLLC, a New England-based labor and employment and business law firm offering fractional general counsel services in New England; [email protected]