Whether you are purchasing materials, hiring an individual, or rendering services, the basis of any business transaction is an accurate and enforceable contract. It’s unlikely that you would do business without one, but have you had your business contracts looked over by a professional?
Simply having a contract isn’t good enough. If it comes to the point where the contract needs to do its job, that is: taking it to court in the event of a breach of your agreement with another party, many contracts that have been written and signed leave out a lot of important information. While these contracts may be enough to detail your agreement with a person or company so long as the business relationship stays honest, it’s very likely that your contract will not hold up in court if it hasn’t been professionally written and reviewed by legal counsel.
In reality, there are multiple aspects a contract needs to fully protect both parties who are entering into an agreement. First and foremost, you need to have your facts in place and they need to be thoroughly and clearly detailed in the contract. What are the terms and conditions of your agreement? Who exactly is involved? When will this agreement start, and for how long will it last? Are there certain conditions that will end the contract early? Can it be extended at the end of its term? All of these questions and more need to be answered by any legal agreement you enter into.
Without this information, a contract simply wouldn’t be enforceable. Vague, short, or unclear contractual elements can all lead to financial harm for your business. If you do not detail the complete agreement and what you expect of it, the other party can very easily decide not to uphold their end of the deal, putting you in legal jeopardy. While you know why the contract was signed, unless the judge is able to read through the contract and have a complete understanding of the agreement (without any supplemental claims or evidence), your contract is not clear and complete enough.
When you look at it this way, it becomes rather simple to figure out what your contract is missing. You could pull out any one of your previous agreements and read through the fine print from the perspective of a judge who has no knowledge about your business or the other party. If you can not answer all of the crucial questions (due dates, timelines, pricing, and specific materials/expectations) about the agreement, your contract is leaving important aspects out.
A contract should be able to provide a full understanding of a given agreement without any prior knowledge about what is expected. A lawyer reading your contract should learn a great deal about the parties involved and why exactly the contract was signed without having to ask you any questions. If they do not have a clear view of what a contract is meant for after doing so, your contracts are either too vague or missing important details.
If you take the time to ensure that every contract you sign or issue meets these criteria, your business will remain completely protected. You will be able to have confidence that you will receive the services or payments that have been agreed upon, and if something does go wrong in the relationship, you can expect that your side of the deal will be enforceable in court, meaning you may be entitled to compensation if the other party decides to reject a claim or back out (so long as their obligations are clear in the contract).
All of this means that acquiring legal counsel to look over your future contracts is paramount to your business’ success. As one example, a lawyer may be able to open your eyes to things that simply haven’t crossed your mind. For instance, if you are signing a contract with a supplier, you can list specific terms and conditions that the price you have agreed to pay cannot change for however many months or years, regardless of how high the market price climbs. This will help your business save money in the long run and continue operating with a good profit margin.
Finally, never use a “verbal contract” in a business agreement. Even if you know the person personally or you have worked with them before, verbal contracts simply aren’t easily enforceable in court. Like poorly written contracts, they leave out a lot of details. And, the existence of a verbal contract has to be confirmed by both parties. If it ever comes to going to court, it’s unlikely you and the other party will be looking to agree on what was said. There needs to be a clear and concise recording of the agreement that includes all important details. Both parties need to sign this agreement to validate its existence and terms.
If you are not using a legal consultant right now, you need to get in touch with one to protect your business going forward. Not only can they look at future contracts before they are signed, they can also aid you with reviewing previous agreements and revising them as needed when it comes time to extend them. This can save your business a substantial amount of time, money, and hassle down the road and it will give you the peace of mind that you have done all you can to protect yourself from legal issues.