What you don’t know about contracts could hurt your business
April 17, 2018 – OTTAWA, ON – Competition Bureau
As the owner of a local business, you are extremely busy. You’ve signed a contract with a supplier to ensure you maintain your supply or service. As your company evolves, it turns out a different supplier would be better suited to meet your needs. However, you quickly realize that your current supplier’s contract includes a clause that locks you in to an excessively long term and includes exorbitant fees should you terminate the contract early.
Business owners deal with contracts for virtually everything, from waste removal to uniform rentals, and everything in between. Although contracts can appear straightforward, restrictive clauses may be hidden in the fine print or may even be in plain sight. These can include automatic renewal clauses, price escalation clauses, and exclusivity clauses, among others.
To help you protect your business and get the best out of contracts, the Bureau has produced a video featuring useful tips and the type of clauses to watch out for. Remember, knowledge is power, so before you sign anything:
- carefully read all the terms including any fine print and ask questions;
- shop around, as quotes from other suppliers can help you negotiate more favourable terms.
If you believe your business has been impacted by anti-competitive behaviour, contact the Bureau online or by phone (1‑800‑348‑5358).
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The Competition Bureau, as an independent law enforcement agency, ensures that Canadian businesses and consumers prosper in a competitive and innovative marketplace.
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