Why You, Dear Founder, Can’t Escape Contracts
Welcome to the thrilling world of business contracts — the adult equivalent of “Did you read the instructions?”
Spoiler: You probably didn’t. But now you’re running a startup, raising money, signing vendors, hiring people, and promising everyone the moon, so… congratulations! You’ve entered the land where every single thing you touch is secretly a contract.
Renting an office? Contract.
Hiring your first employee? Contract.
Buying a laptop? Yup — contract.
Using AWS? Oh yes, that’s a contract that will haunt you later.
Even ordering chai on credit from the tapri is technically a contract — though your lawyer may refuse to take that case.
So before the universe hands you a lawsuit as your surprise Series A gift, let’s break this topic down.
What Contract Law Really Is (According to People Who Wear Black Coats for Fun)
Is contract law a neat little guidebook?
Ha! No. It’s a giant chaotic scrapbook made of:
- Centuries of judges arguing with each other, and
- Modern legislation sprinkled on top like coriander that may or may not belong.
This book (and this rewrite) isn’t here to make you memorize obscure Latin phrases like consensus ad idem.
It’s here to help you, a brave founder, answer the only question that actually matters:
“Am I getting screwed?”
The Contract Life Cycle — Founder Edition
A contract goes through stages, just like your startup:
1. Negotiation
This is the flirting stage. Everyone pretends to be reasonable, nobody reads the fine print, and both sides think the other side is “being chill.”
They are not.
2. Signing
Someone finally asks, “So… are we exclusive?”
You sign — boom, you’re legally married.
3. Performance
Now you actually have to do the things you promised.
Awkward.
4. Variation
Somewhere along the line, someone says, “Hey, let’s change the deal.”
Usually the more powerful party. Usually not you.
5. Termination
A breakup, often messy. Occasionally polite. Frequently expensive.
Contract Law in One Page (Because Founders Don’t Have Time)
To form a valid contract, you need:
- Offer – “I’ll do X if you do Y.”
- Acceptance – “Deal.” Not “Maybe.” Not “Ok but also…”
- Consideration – Each side must give up something. (Not necessarily money. Could be rights, promises, or your sanity.)
- Intention – You must actually mean to be legally bound (most founders accidentally do).
- Certainty – The terms can’t be written like a cryptic WhatsApp message.
- Capacity – Minors can’t sign contracts. (Founders with no sleep are sadly still treated as adults.)
- Legality – The contract can’t be for something illegal. (Sorry.)
- Consent – No duress, no trickery, no “Sign here for free pizza.”
Once signed:
- Only the parties in the contract are bound. You can’t rope in your co-founder just by naming them, nice try.
- You are bound even before performing anything. Signing is enough.
- Not performing = legal disaster. Courts do not accept “I wasn’t feeling it” as a reason.
Common Myths (AKA How Founders Accidentally Lose Money)
❌ Myth 1: “I didn’t sign anything, so it doesn’t count.”
If you acted like you accepted the deal, congratulations — you accepted the deal.
❌ Myth 2: “We discussed it, so it’s binding.”
Unless it made it to the final written document, it’s as binding as your New Year resolution.
❌ Myth 3: “The deal isn’t profitable anymore, so I can exit.”
Nope. Not even a little. The law does not care about your runway.
❌ Myth 4: “They broke something, so I can walk away too.”
Not unless they broke something major.
❌ Myth 5: “Unfair terms aren’t enforceable.”
Oh they absolutely are.
The universe is unfair, and so are contracts.
Big Picture: Contracts vs. Contract Law
Contract law exists to help you once things go wrong.
But here’s the catch: going to court is like going to the dentist — painful, expensive, and something you should avoid unless you have no teeth left.
This is why smart founders:
- Write clear contracts
- Add dispute resolution clauses
- Don’t rely on “bro trust”
- Never say “We’ll sort this later” (You won’t.)
TL;DR for the Busy Founder
Contracts are everywhere.
They matter.
They bind you even when you don’t read them.
And understanding the basics can save you lakhs, your startup, and your sanity.