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Isn't changing the terms of a deal without even sending you a new contract pretty much illegal anywhere sane? Even between business entities?

by p_l 1y ago

lelanthran 1y ago
We don't know (but the norm is) if the original contract had a sunset clause. Almost every special rate I have ever negotiated had specific clauses about when the rate will end, even if there was no specific date there's always something about "rate is reviewed annually" or similar. I am constantly surprised by the number of people with "manager " in their title who don't know how to read a legal document. The other thing is you cannot build anything sustainable by depending on the charity of a single company.
- Dylan16807 1y ago
  > The other thing is you cannot build anything sustainable by depending on the charity of a single company. This wasn't charity from Slack. They paid for the service, and they can migrate if it's truly necessary.
  - eru 1y ago
    The special rate was charity.
    - raphman 1y ago
      If a special rate that better fits an organization's usage patterns is "charity", then any rate that is not extracting the maximum amount of money from the customer is also "charity", no? To some degree, reduced rates for non-profit organization and schools are not offered because large companies want to be nice, but because they want to catch future customers.
      - lelanthran 1y ago
        > If a special rate that better fits an organization's usage patterns is "charity", then any rate that is not extracting the maximum amount of money from the customer is also "charity", no? Maybe, but that's not what happened here. It wasn't "a rate better suited to an organisation's usage patterns", it was, more precisely "A heavily/1% reduced rate." No reasonable person can have the expectation that a discount of $195k on a $200k bill is going to continue forever! At this discount, it really is charity.
        swiftcoder 1y ago
        > it was, more precisely "A heavily/1% reduced rate." It's more a tacit admission by Slack that their pricing model can't possible work for orgs that don't match a strict employer-employee model. Nobody would agree to pay per-seat for every customer who uses a support tool, for example (which is much closer to the model this nonprofit is operating)
        mlyle 1y ago
        No one is ever going to pay per-seat for tens of thousands of teenage volunteers. If you're an unusual customer (nonprofit, with lots of volunteers and program people in the slack) you might end up with a long term special deal recognizing those circumstances (charging you for employees but not others). The biggest issue is the abrupt change in policy. Slack had wanted Hack Club's patronage and had supported it. (Shoot, getting Slack visible to tens of thousands of future decision makers instead of Discord where these users all naturally congregate was a major win!) To abruptly demand a massive immediate payment after a month's worth of mixed signals, from a small nonprofit, is messed up.
        Dylan16807 1y ago
        Saying that only the 50 workers need to pay $100 a year, and not all the program participants, is a perfectly reasonable amount of money to pay for a chat server. It doesn't matter that an alternate method of counting would be a lot more. They paid a reasonable amount for what they got. $200k for this service is a joke, not the 'real' price.
- eru 1y ago
  > I am constantly surprised by the number of people with "manager " in their title who don't know how to read a legal document. Well, that's what you have lawyers for. Otherwise, agreed with your comment.
  - behringer 1y ago
    You have a lawyer to warn you about things you might not notice in your contract. But to not know your general payment terms comes off as pretty lazy.
    - lelanthran 1y ago
      > But to not know your general payment terms comes off as pretty lazy. TBH, in this specific case you don't even need to read the fine print to know that getting a $195k discount on a $200k bill is only a temporary thing!
  - drob518 1y ago
    No, you don't. You have lawyers to assist managers in legal matters. But you can't simply throw a contract at a lawyer and ask "What do you think?" All the terms need to be understood by the manager. It is however reasonable to ask a lawyer "What does this say in normal language?" and "Is there any provision in this thing that sticks out as being really out of line or would trip us up if we had to litigate it?" Understanding a contract is not difficult. I've negotiated contracts with some of the largest companies in the world over my career and it only worked because I was also reading the contracts and interacting with the lawyer as a partner.
zeroq 1y ago
In EU a vendor can amend a contract but it gives the client the opportunity to breach that contract without consequences. On a smaller scale it happens on a monthly basis with telecomms - almost never with rates, but they amend privacy policy and stuff - as a customer a change in the contract gives you an opportunity to say you're not accepting new contract, within certain timeframe, and walk away. I guess this is simmilar - they told them they are changing the contract, and under new circumstances they will have to pay this and that, but they are free to walk away and pay nothing. Still a dick move.
- p_l 1y ago
  Well, you can amend a contract, but you need to send the new conditions, and it gives the other party option of not accepting the new contract, which means either amending party needs to accept continuation under old contract, or dissolution of the contractual relationship with no fees/damages/etc for the party that didn't accept new contract. The part that I find egregious is that apparently Slack didn't even send a new contract.
- chii 1y ago
  > but they are free to walk away and pay nothing. not so for a service which holds your data hostage (unless 'walking away' means you're also able to walk away with your data).
  - p_l 1y ago
    That's an interesting topic that someone should sic some lawyers on, tbqh.
Aeolun 1y ago
You need to be able and willing to fight the other party in court. I doubt anyone there is enthusiastic about that.
- p_l 1y ago
  Depends on what you want to fight about. If your rates were raised and you have not received new contract, if you can drop the service at that point, they can't collect including any cancellation fees. If you want to continue using the service, that's a bit trickier.
conductr 1y ago
The terms of the deal almost certainly specified they are allowed to change terms at their discretion in the future
- p_l 1y ago
  "We can change the terms at our discretion" is a line that gets the book thrown at you in court, at least in EU, and that's the start of the humiliation conga for whoever tries to claim such a clause. You cannot insist on a clause that lets you change the contract at your discretion and having the resulting amended contract be valid without acceptance by the other party.
  - rchaud 1y ago
    You just explained why EU software startups do not cause VCs to rain money down on them.
    - p_l 1y ago
      I've seen a lot of bad takes about this topic, but "there's no VCs because you can't ransom your clients for extra money" is... out there, special extra. You can raise prices, you're just not guaranteed that a client will remain your client, and when you change the terms of the contract you void any contractual penalties as well.

Isn't changing the terms of a deal without even sending you a new contract pretty much illegal anywhere sane? Even between business entities?

by p_l 1y ago

Isn't changing the terms of a deal without even sending you a new contract pretty much illegal anywhere sane? Even between business entities?

lelanthran 1y ago

We don't know (but the norm is) if the original contract had a sunset clause. Almost every special rate I have ever negotiated had specific clauses about when the rate will end, even if there was no specific date there's always something about "rate is reviewed annually" or similar. I am constantly surprised by the number of people with "manager " in their title who don't know how to read a legal document. The other thing is you cannot build anything sustainable by depending on the charity of a single company.

Dylan16807 1y ago
> The other thing is you cannot build anything sustainable by depending on the charity of a single company. This wasn't charity from Slack. They paid for the service, and they can migrate if it's truly necessary.
- eru 1y ago
  The special rate was charity.
  - raphman 1y ago
    If a special rate that better fits an organization's usage patterns is "charity", then any rate that is not extracting the maximum amount of money from the customer is also "charity", no? To some degree, reduced rates for non-profit organization and schools are not offered because large companies want to be nice, but because they want to catch future customers.
    - lelanthran 1y ago
      > If a special rate that better fits an organization's usage patterns is "charity", then any rate that is not extracting the maximum amount of money from the customer is also "charity", no? Maybe, but that's not what happened here. It wasn't "a rate better suited to an organisation's usage patterns", it was, more precisely "A heavily/1% reduced rate." No reasonable person can have the expectation that a discount of $195k on a $200k bill is going to continue forever! At this discount, it really is charity.
      - swiftcoder 1y ago
        > it was, more precisely "A heavily/1% reduced rate." It's more a tacit admission by Slack that their pricing model can't possible work for orgs that don't match a strict employer-employee model. Nobody would agree to pay per-seat for every customer who uses a support tool, for example (which is much closer to the model this nonprofit is operating)
      - mlyle 1y ago
        No one is ever going to pay per-seat for tens of thousands of teenage volunteers. If you're an unusual customer (nonprofit, with lots of volunteers and program people in the slack) you might end up with a long term special deal recognizing those circumstances (charging you for employees but not others). The biggest issue is the abrupt change in policy. Slack had wanted Hack Club's patronage and had supported it. (Shoot, getting Slack visible to tens of thousands of future decision makers instead of Discord where these users all naturally congregate was a major win!) To abruptly demand a massive immediate payment after a month's worth of mixed signals, from a small nonprofit, is messed up.
      - Dylan16807 1y ago
        Saying that only the 50 workers need to pay $100 a year, and not all the program participants, is a perfectly reasonable amount of money to pay for a chat server. It doesn't matter that an alternate method of counting would be a lot more. They paid a reasonable amount for what they got. $200k for this service is a joke, not the 'real' price.
eru 1y ago
> I am constantly surprised by the number of people with "manager " in their title who don't know how to read a legal document. Well, that's what you have lawyers for. Otherwise, agreed with your comment.
- behringer 1y ago
  You have a lawyer to warn you about things you might not notice in your contract. But to not know your general payment terms comes off as pretty lazy.
  - lelanthran 1y ago
    > But to not know your general payment terms comes off as pretty lazy. TBH, in this specific case you don't even need to read the fine print to know that getting a $195k discount on a $200k bill is only a temporary thing!
- drob518 1y ago
  No, you don't. You have lawyers to assist managers in legal matters. But you can't simply throw a contract at a lawyer and ask "What do you think?" All the terms need to be understood by the manager. It is however reasonable to ask a lawyer "What does this say in normal language?" and "Is there any provision in this thing that sticks out as being really out of line or would trip us up if we had to litigate it?" Understanding a contract is not difficult. I've negotiated contracts with some of the largest companies in the world over my career and it only worked because I was also reading the contracts and interacting with the lawyer as a partner.

zeroq 1y ago

In EU a vendor can amend a contract but it gives the client the opportunity to breach that contract without consequences. On a smaller scale it happens on a monthly basis with telecomms - almost never with rates, but they amend privacy policy and stuff - as a customer a change in the contract gives you an opportunity to say you're not accepting new contract, within certain timeframe, and walk away. I guess this is simmilar - they told them they are changing the contract, and under new circumstances they will have to pay this and that, but they are free to walk away and pay nothing. Still a dick move.

p_l 1y ago
Well, you can amend a contract, but you need to send the new conditions, and it gives the other party option of not accepting the new contract, which means either amending party needs to accept continuation under old contract, or dissolution of the contractual relationship with no fees/damages/etc for the party that didn't accept new contract. The part that I find egregious is that apparently Slack didn't even send a new contract.
chii 1y ago
> but they are free to walk away and pay nothing. not so for a service which holds your data hostage (unless 'walking away' means you're also able to walk away with your data).
- p_l 1y ago
  That's an interesting topic that someone should sic some lawyers on, tbqh.

Aeolun 1y ago

You need to be able and willing to fight the other party in court. I doubt anyone there is enthusiastic about that.

p_l 1y ago
Depends on what you want to fight about. If your rates were raised and you have not received new contract, if you can drop the service at that point, they can't collect including any cancellation fees. If you want to continue using the service, that's a bit trickier.

conductr 1y ago

The terms of the deal almost certainly specified they are allowed to change terms at their discretion in the future

p_l 1y ago
"We can change the terms at our discretion" is a line that gets the book thrown at you in court, at least in EU, and that's the start of the humiliation conga for whoever tries to claim such a clause. You cannot insist on a clause that lets you change the contract at your discretion and having the resulting amended contract be valid without acceptance by the other party.
- rchaud 1y ago
  You just explained why EU software startups do not cause VCs to rain money down on them.
  - p_l 1y ago
    I've seen a lot of bad takes about this topic, but "there's no VCs because you can't ransom your clients for extra money" is... out there, special extra. You can raise prices, you're just not guaranteed that a client will remain your client, and when you change the terms of the contract you void any contractual penalties as well.