No matter what, sometimes your deal will go bad and you’ll suffer the consequences. In my experience, many bad business deals can be avoided if you know the signals of a oncoming deal wreck. So, here are 5 Signs You’re About to Get Screwed in the Deal:  MB8GDC4E5U3J

1.  The other guy talks and talks and talks. You understand every 37th sentence.

If someone talks incessantly, he could be a narcissist, an insecure nebbish or a sociopath. These personality disorders bode badly for getting him to work productively. His personality disorder will warp his judgment. Deep insecurity will make him easily angered or hurt and nearly impossible to validate. Even if he is just a rambling man, he probably has a focus problem.

What if he makes no sense to boot? People of good faith try to be clear. People who don’t know what they are talking about, or are trying to seem like something they are not, deliberately confuse.

Let’s say you are considering investing $10,000,000 to fund an engineer’s solar technology. If the engineer cannot explain the technology to you so you understand it, maybe that is because the engineer either doesn’t want you to understand it or doesn’t understand it himself. If a potential business partner talks too much or makes no sense, reconsider.

2.  Your adversary acts like one.

If the other guy refuses to be fair or reasonable before your relationship even starts, imagine how much worse he’ll be when you are locked into a contract. And if he makes it personal?  Dysfunction junction.

Bonus Red Flag: The emergence of a killer noncompete can be a red flag of bad times ahead. Noncompetes that prohibit you from using company secrets or people to help yourself are fine; noncompetes that keep you from working are not. A noncompete that tries to punish you for deserting the company may indicate a company culture that veers towards cruel. Of course, such a broad noncompete probably would not be enforced, but, enforceability is beside the point. Any future employer could be reluctant to take you on with all that legal baggage. Some future employer could make you pick up its legal costs for your noncompete.

3.  “Don’t you trust me?”

If he has to ask, you shouldn’t. Another favorite of mine is, “I only do business on a handshake.” That guy always turns out to be a bad guy.

4.  “These are the contracts. Sign here. Here and here.”

Look, many contracts don’t say what the parties think they do. Contracts have errors and people have flaws. You should not only insist you be given a full chance to review the contracts with a lawyer, but you should also insist that other parties do the same. An attempt to deny you the time to review the contracts, even if due to a ticking shot clock, should trigger an urgent desire to read them even more carefully.

5.  You sign. He reneges.

Sometimes the efforts involved in doing a deal sap the company of all its energy. You’d be surprised how many Closing Dinners are followed by requests to renegotiate.

Would love to hear your red flags for bad deals. Please add a comment.

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