If you’re going to enter into a contract, you want to make sure it is a strong one. Every transaction is unique, but below are a few general tips for ensuring your agreements are solid:
Get it in writing
Although some verbal agreements can be binding, they can be extremely tough to enforce. You should never take the risk with your business – get your contracts in writing. It will lessen the likelihood of confusion and disputes. Additionally, keep the language simple. Legalese can often make matters unnecessarily complex.
Negotiate with the proper person
It is imperative that you negotiate with the person who has the authority to make binding decisions on behalf of the other party. Failure to do this can result in a significant waste of time.
Confirm the parties are correctly identified
This may seem obvious, but it is a common mistake for contracts to use names for parties that are not their legal names. For example, they use “XYZ” instead of “ABC, Inc. doing business as XYZ” or they include the names of the owners of the business.
The terms and conditions of the contract should be clearly spelled out in full detail. If it was verbally agreed upon, it should be included in the document too. If you discover a detail was forgotten, have a short amendment to the contract drafted as soon as possible. The agreement should also specifically state which state law governs the interpretation of the contract.
Cover contract termination
Although nobody wants to think about terminating the contract before it is even signed, it is essential to do so. Not only should the agreement contain a termination date, but it should also set forth what will happen if a party defaults under the contract. This may include clauses that outline how disputes will be resolved.
Keep it private
If the contract covers sensitive business information, the agreement should include mutual promises that it will be kept confidential.
If you have questions regarding business law matters, contact us today to schedule an initial consultation. Leslie S. Marell has been practicing business and commercial law for over 25 years. She is established in private practice and has extensive legal experience counseling companies in the areas of business contracts and transactions, purchasing, sales, marketing, computer and technology law, employment law and day to day legal matters. Let us provide your company the advice and guidance you need.