Lockdown is no excuse to shirk contractual responsibilities

Contracts can be confusing. Terms and conditions are important and no matter how small the print is, deserve your full attention but they are not always the easiest to understand.

If you have missed something and it’s causing you a problem, the last thing you want to do with any contract is bury your head in the sand and ignore the realities of what you’ve agreed to.

Scrutiny right from the outset is vital; otherwise, there can be nasty surprises awaiting you.

Once you sign, you’re committed

I’ve come up against a few good examples of this with photocopier contracts since the Covid lockdown. On a number of todays photocopying contracts, you’re committed to a certain number (volume) of prints per month or quarter. If you sign up for say 5,000 prints a month, that’s what you will pay for, regardless of how many prints you actually produce.

There’s a couple of tricks to be careful of especially with Managed Services Agreements, as they’re usually written with the intention that within six to nine months, you’ll need to change the volume because you’re printing more, or less, than you agreed. The seller will charge you for extra copies you’ve had to print that month, and that cost is often set at a high rate.

So you go back and complain, and the seller will either adjust the agreement, taking what’s left of the old contract and wrapping it up into an amended one, or they write a completely new agreement. Either way, they’re tying you into paying more, and usually for longer.

This type of contract caused problems for many during lockdown when people weren’t earning any money or using any copies. Unfortunately, there was an assumption that they would never be liable to pay for the copies they’d committed to print. Sadly, that’s not the case, the suppliers and financiers want their money.

Non-payment will catch up with you eventually

In a similar scenario, if you had a lease on a machine and had a separate service contract, the leasing company would make an arrangement to defer payment for six, nine, or even 12 months, or whatever. After all, if you’re not in the office, you can’t use the machine.

But it is important you understand, that this type of arrangement is a deferral, not a cancellation. So if you had a five-year agreement and deferred it for a year, that becomes a six-year agreement with the agreed holiday period in the middle.

It’s similar to if you can’t pay your mortgage – you go and see the building society and make an arrangement to defer payment until you’ve got the money. You don’t get away with not paying, eventually, you will have to pay what you’ve signed up to pay.

Unfortunately, there is a misconception that because these managed service agreements are tied up with copies and those copies were not produced. Then there shouldn’t be anything to pay. But it doesn’t work like that.

Never sign a managed service agreement

Managed service agreements are hugely popular in the industry, but they’re only popular in the industry because they’re not there to benefit the customer. You should not enter a managed service agreement, it’s as simple as that. Why not?

Because you’re going to waste money. You might think you’re getting a great deal the first time around, but by the time they have finished adjusting it to match your alleged usage, I promise you, it will not be a great deal anymore.

For some contracts signed in 2018 or 2019, the volume was exactly right for that period, and if everything had carried on as normal, those volumes could still be good.

But, when the world stopped, and nobody wanted copies, scans or prints, anymore the day-to-day benefit was lost, yet businesses had to keep paying – it’s nobody’s fault that the pandemic struck, but the fact remains, those contracts are legally binding and still in place.

Another result of lockdown is that people didn’t go back to the office. Some businesses closed offices for good and left their copiers and equipment behind. While the copiers may have been disposed of, their contracts have not.

So not only has the business got to find the money to settle the contract, they’ve also got to pay to replace the machines that somebody else might have thrown away.

Always read the small print in your office equipment contracts

When you’re in a contract, you can’t just stop paying and walk away from it, you will have to address it, whatever has happened in the world.

Right now, many people are simply putting their head in the sand and hoping the problem wil go away, Or worse still they listen to another salesperson who happens by, who wrongly tells them they’re free of their original obligation and to sign a new contract, only to then find themselves with double the problem because then they’ve got two contracts to pay.

You must read and understand contracts before you sign them because afterwards is too late. By signing, you’re confirming you’ve read, understood and accept all of the terms and conditions, and if you haven’t and it comes back to bite you, well then that’s your problem and no one else’s. Once it gets to that stage, there is little anyone can do to help you.

Fair Contract Associates

With 53 years in the industry, we know the tricks of the trade and have been working hard to stamp out bad practices in office supply contracts. We help buyers at whatever stage of their purchase they’re at.

Alongside help with existing problems and a full procurement service, we offer a fully independent low-cost contract checking service – so you will know exactly what you’re getting into, what your obligations are, what you’ll be paying and any potential pitfalls in a contract, before you sign anything, because prevention is far cheaper than cure.

Need help with a new or existing contract? Schedule a call today.