Solid contracts are critical for every business. Unfortunately, this is an area that business owners often neglect…with disastrous results.
Below we identify five especially common mistakes. Is your business making any of these mistakes?
- Reliance on oral contracts.
Oral contracts are often legally valid, but they can be almost impossible to enforce. In a disagreement, it’s easy for one party to state that they recall your agreement differently – potentially costing you huge amounts of money. For a contract that’s enforceable and that represents the interests of all parties, you should have a written contract.
- Writing contracts by yourself.
If you’ve written the contract yourself, your contract may leave you vulnerable. An experienced business lawyer can help you make sense of the legalese and create a contract that reflects the needs of your business and provides powerful protection should something go wrong.
- Not ensuring that the other party to the contract is authorized to sign for the business.
Many a business contract has turned out to be invalid because it was signed by someone who wasn’t authorized to do so. If you’re dealing with a large company, or even a small one, be sure you understand the chain of command. And make sure all of the details are correct – including properly spelling each name!
- Failing to include payment details.
Payment due dates, amounts, and the goods or services that are to be delivered in exchange are among the most important parts of any contract. If there are any conditions that must be met before payment is made—for instance, the product quality needs to be approved—these should be carefully spelled out. You can’t afford vague or unclear payment details…doing so could literally cost you a fortune.
- Not specifying how the contract ends.
Can the contract be terminated if one party is failing to perform or missing deadlines? Will there be penalties involved? What are your options if you no longer wish to remain in the agreement? All of these details need to be spelled out clearly in the contract agreement.
Strong contracts are essential when it comes to protecting your interests. If you’d like to learn more, or if you’d like assistance creating solid contracts for your business, please contact us today!
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