Basic Training: Vendors Who Want to Bind Your Heirs
Get the working capital your business needs from Entrepreneur Lending, powered by CAN Capital. Learn More »It's bad enough that the fine print in agreements often comes in microscopic font. But what if your vendors want your heirs to be responsible for your debts?
Q: I want to sell my product online. One of the credit card processors has in their contract a paragraph for me to sign an acknowledgment which will bind my heirs, administrators or representatives, payment upon my demise of any outstanding debts, etc. Is there a particular insurance that I should look into covering such credit card processors' contractual obligations? Also is there any comparative spreadsheet for credit card processors' requirements? They promise you the world until you're ready to sign but won't let you see the end contract up front . . . all that fine print which you almost have to give away your first born.?
A: Credit card processors are, not surprisingly, very concerned about getting paid given that so many of their clients are brand-new businesses without track records. But you are wise to want to know what you're getting into before you sign on the dotted line. Often, entrepreneurs (or, rather, their estates) will apply life insurance proceeds to handle outstanding debts (both business and personal) upon their death. Although I have not conducted a comparison of credit card processors myself, a Google search for "online merchant account comparison chart" may help steer you in the right direction. If you find a company whose rates look promising, their website may have links to their terms and conditions (look for links on the bottom of the webpage in tiny type called "legal agreements" or words to that effect).