You rely on a wide variety of different contracts to keep your business running. Lease or purchase agreements give you a place to do business. Contracts with suppliers ensure that you can provide quality products and services to your customers. Employee contracts protect both your workers and your company. Your agreements with clients ensure that you are paid on time. However, the contracts you rely on could offer one other important benefit: keeping your business out of legal disputes.
Be specific and clear.
Many legal disputes begin with misunderstandings. Writing a contract with clear language allows both parties to understand the agreement and their part in the agreement. It is also important to be as specific as possible about the terms of the contract so that the agreement details all the important points regarding your rights and obligations.
Specificity is especially important if your contract involves one party paying the other for goods or services provided. Straightforward instructions about how, when and what one party will pay for those goods or services leave nothing open to misinterpretation.
Consider which clauses will achieve your goals.
Each contract is built for a unique situation, and you may want to include additional clauses depending on that situation. For example, you may include a confidentiality clause in a contract to protect any trade secrets that you rely on in your business.
For some contracts, you may also lay out terms for a potential dispute. This can include an agreement to resolve disputes through arbitration, information about litigation costs and even which state’s laws will apply if the parties do business across state lines.
Review and negotiate as needed.
Because contracts are one of the most powerful tools you have in protecting your business from disputes, it is essential that you thoroughly review these documents and negotiate the terms as needed. Careful review can help you identify terms that would be unfavorable to your business, and negotiation can help you reach an agreement that benefits both you and the other party.
Having an attorney review your contracts can be an important way to prevent future disputes before they occur. A lawyer with experience in business law—especially an attorney with business litigation experience—can help identify potential issues before they arise and help you negotiate a contract that benefits and protects your business and its bottom line.