Comment by gamblor956 | Hacker News Reader

Comment by gamblor956 | Hacker News Reader

Ran it by our Legal Department. The inability to customize all aspects of the contracts to handle specific needs for each contract renders this DOA.

What you see as unnecessary negotiation over "standard terms" they see as protecting the company's specific interests based on its needs and risk tolerances. By eliminating that, you've eliminated most of the potential market, since differences over "standard terms" usually reflect significant differences in each parties' specific legal needs and risk tolerances. It seems that you're targeting SV tech companies that all use the same group of VCs, which explains why they have a lot of standard terms they can all agree on. But once you expand outside of this narrow niche (and especially if your contracts involve foreign counterparties), this list of common standard terms selected by a third party that both counterparties can agree on without review or negotiation goes to zero. Even just a cursory review of the Professional Services Agreement raised several huge red flags that no competent Legal Department should agree to...

Also, any company that needs standardized contracting so they can automate processes based on that is large enough that they can simply demand their counterparties use their standard contracts...you're not getting Oracle and Apple or large companies to use these contracts (and especially not non-tech companies), and that means any customers who are dealing with such counterparties will need a separate process for handling those contracts, which makes contract management more complex, not less.

You also are going to quickly run into scaling issues. A main sell is that you have a team of “experts” draft the standard terms. But this means a new “expert” team for every new contract-type AND industry. The same type of contract (e.g., an MSA) can look very different in tech (where most of your expert attorneys work) than in pharma, ag, or oil & gas, for example.

Trust is also a big issue. “Standard” is never really standard. Contract language is always going to be biased towards one side of a deal. Take NVCA forms. They claim to be “model” but the language generally is drafted to favor VCs over founders. How can one trust that your “expert” group is creating truly neutral forms?

This also has malpractice / UPL written all over it. You are representing that your standard contracts are fair and balanced, but then are simultaneously attempting to disclaim liability by stating that you don't provide legal advice about the suitability of your standard contracts. Who bears responsibility if a 100M+ deal goes bust because of your standard contract?

I agree that ours isn't necessarily the right model for every industry. We do plan to expand beyond tech eventually. When we do that, we would need to work with a new set of attorneys with experience in that field as you suggest.

On your question about how to tell whether the forms are truly neutral, you don't have to take our or the committee's word on it. Since the docs are public and available for free, you and/or your attorney are welcome to review them. Lots of companies have done that and decided that they do represent a balanced standard, but some decide it's not for them.

We work closely with an attorney who specializes in the practice of law. They've helped us to strike a balance between offering something that we hope is useful while not running afoul of the UPL rules.

Totally agree that this won't work for all companies or situations. You're right that our initial target market is technology companies, although many of our users are outside Silicon Valley.

I also agree that getting large companies to agree to use the standards will be hard, but there examples of them adopting other standard contracts:

Here's Bank of America entering into the ISDA Master Agreement for financial derivatives https://www.sec.gov/Archives/edgar/data/1065696/000119312511...

and Disney using the IAB Standard Terms for online ads https://disneyconnect.com/dpep/disney-ad-guidelines/

We've already seen our users closing deals with Fortune 500 companies using the standard contracts, but we have a lot more work to do on that front.

Bank of America and Disney's ad department are using industry standard contracts for high-volume automated transactions where negotiation is not required or allowed, and review is not required by Legal prior to entry or execution.

Your product is intended for low-volume transactions that are intended for Legal to review before signing.

It's not even remotely the same thing, and if your advisors have suggested otherwise you need to replace your advisors.

I agree that many of the transactions on the IAB Standard Terms and ISDA Master Agreement are automated and don't involve negotiations. There are, however, also higher dollar value ad buys and derivative transactions that use those standard agreements and do involve negotiation.

I had a helpful conversation with an attorney who was previously at Facebook about this. They use the same basic addendum to the IAB Standard Terms for most of their ad sales, and they sometimes negotiate it with large customers.

We see a similar pattern among our users, where their lower dollar, high volume transactions don't involve negotiation, but their bigger deals do.

We don't yet have the same distribution as the IAB or ISDA, but our goal is that over time more and more companies will be able to focus just on the variables in the cover page of our standard agreements because their team has already reviewed our standard terms.

Came here to say this.

I'm a small real estate owner (alongside running a tech co). I spent about 90 minutes yesterday reviewing an agency agreement giving a brokerage the exclusive right to market one of my units (commercial) for lease.

Even in such a "simple" contract, I demanded many changes. They wanted the exclusive right to represent us in case the building was sold - I took that out. They wanted a flat 5% commission for the length of the lease - I changed that to only the first seven years. They wanted indemnity, and to be reimbursed for expenses, and many other things I just wasn't going to do.

It was the same thing with a lease earlier this year. We argued for months over the terms - how much rent, who was responsible for HVAC (me as owner, for replacing one unit, the tenant for ordinary repair and maintenance), late charges, whether or not we were doing ACH (my preference) or paper checks, whether or not a renewal option was included (I took that out), and a bunch of junk their lawyer wanted that I mostly managed to keep out.

Now, maybe there are some very basic agreements that can be relatively boilerplate, low-value things, or maybe it's valuable to start from some kind of common standard.

But in my experience, the whole concept of this product is flawed. It actually reminds me of something I built 5-6 years ago, a simple chat bot (called Interval) to handle scheduling for low-value items like tennis courts, or conference rooms. My view of scheduling was a practical problem, almost algorithmic, of making it easy to reserve something. What I didn't understand, was the huge amount of social context inherent in scheduling--who's important, who's friends with who, who's doing somebody a favor, who gets special treatment, and why.

There's a lot of social context there that means scheduling is going to stay in the human realm, for a LONG time, long, long after 50 more people try replacing it with an LLM.

This product feels the same. Every business contract is a complicated dance involving negotiating power, who needs who more, who cares more, what language stays in vs comes out, settling some kind of score (I did this for you last time, you owe me this time), and 100 other things.

There might some kind of low-value contracts that aren't customarily negotiated, or maybe real estate is a particularly negotiation-intensive field (very possible), but I have a very, very hard time seeing all of this getting "standardized" in the name of efficiency improvement. It just isn't going to happen.

It sounds like you're way more experienced than me with commercial real estate. I've done a handful of office leases, and I had a similar experience with tons of negotiation and arguing. It was a tremendous pain.

On the other hand, I live in Pennsylvania, and I bought my house using the PA Standard Agreement for the Sale of Real Estate. https://www.parealtors.org/standard-forms/ I spoke to a local real estate attorney who told me that there's no point in trying to negotiate the boilerplate in the doc, and I should only focus on a handful of variables like price, escrow, closing period, etc. He said that virtually all of the houses in our area are sold on the standard contract.

So my hope is that we can make tech commercial transactions more like my experience buying a house and less like my experience signing an office lease (or your experience with the agency agreement).

Honestly, good luck trying. Seriously. (Fellow founder here.)

Thank you!

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