Things were looking up at Uh-Oh Enterprises. Bill Wiseacre finally landed his dream client, the one he had chased for years. After a tough sales process, the client was ready to sign the contract. This win promised Bill financial security, a chance to hire more staff, and a boost to his company’s reputation. It was everything he had worked for since launching his business.
But there was a problem. Bill wasn’t prepared to handle a client of this size. He had always closed deals with a handshake, relying on trust and goodwill. This client, however, wanted a formal contract before moving forward. Bill found himself scrambling to put together a legally sound agreement.
Sleepless Nights Over the Contract
Despite his excitement, worry crept in. Bill needed a contract but didn’t want to hire a lawyer. Instead, he used a generative AI system, hoping to draft an agreement quickly and cheaply. The AI provided a polished Services Agreement that seemed to cover all the key points. Confident in technology, Bill skipped hiring his attorney for review and sent over the AI-generated contract. His relief grew when the client signed off, allowing him to focus on delivering great work.
The Calm Before the Storm
After landing the major client, Bill let smaller contracts expire, shifting his focus to larger clients. He expected steady revenue from the new deal to grow his business. Tight on cash, Bill paid his employee out of pocket, trusting the big client would pay soon.
For a while, everything seemed smooth. Bill completed the first month of services and sent his deliverables to the client. Every day, he anxiously checked his mailbox, waiting for the check. As the 30-day mark approached, stress began to build. He hadn’t required upfront payment, offering extended terms instead—a decision he now regretted. When the check didn’t arrive, he reached out to the client to ask about the payment status.
The Shocking Truth
The client politely reminded him of the contract’s net 90-day payment terms. Bill’s heart sank. “How can I make payroll for three months without any cash?” he thought.
Unbeknownst to Bill, the AI-generated contract pulled standard language from its data. With improper instructions, the contract ended up favoring the client, including a net 90-day payment term. Bill now faced a harsh reality: cash flow could make or break his business, and a poorly structured contract put everything at risk.
The Momentum Law Group Perspective
A contract review can make or break your client relationships. No two deals are alike, so why rely on a one-size-fits-all template? If Bill had involved his lawyer from the start, the payment terms issue would have been spotted. His attorney could have negotiated terms that fit Bill’s cash flow needs.
This situation highlights a critical point: where business meets law, contracts must align with a company’s internal operations, including carefully structured payment terms. While a generic or AI-generated contract may seem like an easy shortcut, experienced business owners know the truth. Fixing a bad contract later is far more costly than getting it right from the beginning.
What Would You Have Done in Bill’s Situation?
Blog Posts from Uh-Oh Enterprises are cautionary tales from Momentum Law Group. Bill Wiseacre and his family are fictional characters representing real life situations that keep entrepreneurs like Bill from reaching full potential. #donotbelikeBill
