Contracts are an essential part of business life. However much you trust someone, business is business, and you need to ensure you understand anything you sign and that the contract protects your interests.
These are some key characteristics of a good business contract:
- Fair: If there is a problem between the two companies, a judge may overrule a contract if deemed one-sided.
- Clear: While it might seem smart to make a contract purposefully vague, thinking you can slip out of an obligation, it could backfire. Many companies have lost contract disputes due to a lack of clarity.
- Legal: There are specific state and federal rules you need to play by in the business world. If your contract does not abide by these, it may be worthless.
- Up to date: Laws change. You should ensure your contract is written according to the current laws. You should revisit it regularly to make sure it is still current.
- To the point: Do you really need a clause stating that alligators are not allowed in the property, and all hamsters must be kept on a leash? No contract can cover every eventuality, so consider what is essential and forget the rest. Would you sign a 50-page contract to lease a holiday home for a month? Put yourself in the other person’s position and make sure your contract does not put them off.
Trying to write business contracts by yourself may seem like a great way to save money, but it could prove costly in the long run. A business attorney can help you protect your business, whether you are just starting up or have been in business for years.