One-Sided Contracts

Yesterday I once again reiterated the fact that if you don’t own your infrastructure, you’re at the mercy of whoever does. Today I want to discuss why third-party providers can so easily pull the rug out from underneath you.

Businesses all over the world rely on third-party providers for any number of goods and services. They do so without too much concern that those third-parties are going to suddenly kneecap them. How do they accomplish such a feat? The answer is contracts. Large business deals aren’t made by one business clicking the accept button on a provider’s terms of service of end user license agreement. They’re made by lawyers on both sides negotiating terms. If one party only offers a deal where they can do whatever they want and the other party simply has to accept it, the other party will likely walk away. But such one-sided deals are common with online service providers.

If you sign up for an account on Amazon Web Services, Digital Ocean, GoDaddy, or any other hosting provider, you are presented with terms of service that you have to accept in order to use the service. There is no opportunity for you to negotiate. If you bother to read the terms of services, you’ll realize that they tend to put a lot of obligations on you as the paying customer but almost none of them as the provider. The terms of service usually allow the provider to cut you off for any reason without notice. But do you get any guarantees in return? Do they guarantee you uptime, reliability, or anything along those lines? If they do, do they agree to pay a financial penalty if they fail to provide what they guarantee? Do they offer a concise list of specific terms that are the only terms under which they are allowed to terminate the agreement without paying a financial penalty to you? They don’t.

I’ve been fortunate enough to observe contract negotiations between businesses. It’s both an interesting and painstaking process. They can take weeks, months, and even years. During that time both parties will strive to ensure every detail that could impact them is hammered out. Neither party wants to be in a position where the other can screw them.

Every end user license agreement and terms of service you’ve accepted over the years was likely entirely one-sided. The company you’re paying probably reserved all of the power for themselves. It’s likely that they dictated who will arbitrate any disagreement between them and you (if any disagreement is even allowed to you under the terms). This is one reason, perhaps the biggest reason, you can’t rely on a third-party service provider. If you decide to host your site on Amazon Web Services, Digital Ocean, GoDaddy, etc., they can remove your site for any reason without any advanced warning. In return you get to take it and ask for more.

No competent business would knowingly enter a one-sided contract. Take a page from their book. If you’re looking to purchase a good or service and the only offer is a one-sided agreement where the provider gets all of the power, walk away.

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