Terms & Conditions

Just out of curiosity...does anybody ever read (and understand) all of the Terms & Conditions you accept on the web? I've thought about this before, but today I observed several people at work scrutinizing the Terms & Conditions that were associated with a purchase order we received. These were executives who had to scrutinize the documents independently as well as with legal counsel...a timely and thereby costly task. It wasn't a large order that was going to generate significant revenue, but in these economic times you tend to fight for every order you can to keep the workforce busy and employed.

While there were multiple terms and conditions that were troublesome, the biggest point of contention stated (in layman's terms) that even if the customer was at fault in using or installing the piece of equipment we sold them, we would have to indemnify the customer...or essentially pay for any losses or lawsuits that was a result of THEIR negligence.

Applying this principle in a real world situation...let's say I manufacture steak knives which are intended for the purpose of cutting a juicy prime rib. If you had as a condition of sale this same type of legal condition, I could be sued and required to pay any damages if you who used this knife to destroy somebody's house, or worse, if you went postal and stabbed and murdered a bunch of people. How crazy is that? Would you agree to that?

What makes matters worse, is that all of this legal nonsense escalates the cost of doing business. This increases the cost of everything the U.S. consumer has to purchase. You have manufacturers who spend way too much money consulting with attorneys to create their Terms & Conditions, and then you have the distributor and ultimately the end customer such as a Wal-Mart that do the same thing in generating their own legal Terms & Conditions...none of which are the same....and each of which protect only the entity that created them. In this day and age, where everybody is sue-happy (not so happy), all of these businesses have to spend all of this money to TRY to protect them from the current legal environment. Common sense is out the window. Consumers (you and I) aren't capable of assessing the risk associated with hot coffee...you will get burned if you spill the hot coffee in your lap.

Next time you come across a Terms & Conditions you have to accept to say...update your iTunes, take a few minutes (okay maybe a few hours) to read and try to understand what you are actually agreeing to. Thank goodness there were a few people that read the Terms & Conditions that Facebook recently tried to put in place which changed user's rights associated with the content they post.

Now imagine, if you will, trying to operate a business (and make a profit) where every item you purchase and most services you purchase come with a different set of Terms & Conditions that you have to evaluate and sign off on, or negotiate, or you must find another vendor or service provider. Then for every different customer you want to sell to, you get a different set of Terms & Conditions you have to evaluate and sign off on, or negotiate, or decide not to accept any orders from the specific customer. And while you've spent all that time and money trying to cover your ass, you are still going to spend out the whazoo defending in court if you do get sued.

What Scares Me

It doesn’t scare me that our economy is experiencing a slowdown, recession or maybe even a depression. Our society has faced these crises before, and we have come out of them stronger than before.

It doesn’t scare me that there are businesses that might go bankrupt if the government doesn’t bail them out. Our history is rich with examples of businesses that have gone bankrupt – some of which rebounded after restructuring and others that have become obsolete or irrelevant and ceased to exist. I tend to consider this natural selection within the economic world. Businesses that don’t manage their debt structure or ride too high and spend too freely during the good times are vulnerable to service their debt when their revenues drop. Businesses that don’t keep up with changing market trends or technologies are likely to become obsolete. That is a good thing. Businesses should not be bailed out and rewarded for failure to run a good business.

What scares me is the total lack of any leadership in both government and businesses alike. I’m afraid that the most recent example of Gov. Blagojevich in Illinois is more of a rule than an exception. Lack of ethics is not exclusive to one party, because there are examples including Sen. Stephens (R) from Alaska who failed to acknowledge the $250,000 he received in gifts. Sen. Chris Dodd and Sen. Barney Frank getting loads of kickbacks from Freddie Mac and Fannie Mae while repeatedly denying that there were any financial problems. There is former Governor Eliot Spitzer of NY who was involved with a prostitution ring. Now we have just named Timothy Geithner as Treasury Secretary with duties of overseeing the IRS. He has admitted to not paying $35,000 self-employment taxes for several years, even though he had acknowledged his obligation to do so, and had filed a request for, and received, a payment for half the taxes owed. He sounds like he is a very smart qualified individual; however, his confirmation sends a message to others that it is really okay to cheat on your taxes. Furthermore, why should we think that he won’t make decisions based on his own selfish greed, since he has demonstrated this in the past? Personally, I don’t think he can be entrusted to look out for the best of our country. Then there is Tom Daschle popping up with tax issues...at least he withdrew his nomination.


What scares me is that we have political leaders that are more interested in lining their own pockets and securing their own future instead of pursuing policies or legislation that secures America’s future.

What scares me is that we have business leaders that are more interested in how they can get bigger bonuses, more vacation homes, and nicer offices than they are in managing the businesses they run. These CEO’s have been entrusted by shareholders and employees alike to make decisions that build the business, not destroy the business. Bernard Manoff, former head of NASDAQ, is accused of a Ponzi scheme in which he took $50 billion from investors in his hedge fund. Reports indicate that this will be larger than the Enron scandal. Now you have all of these companies who recently took TARP money...every day it seems there is some new report of siphoning the money off for bonuses or trips or some other wasteful endeavor.

What scares me is that if this type of short-sightedness and selfishness continue...where will our country end up? Where are the political leaders and business leaders who are willing to step up to the plate and make decisions for the companies and the governments they are charged to oversee and lead. Where are the political and business leaders who can make decisions for their constituents and organizations instead of making decisions only looking out for themselves?