The Proof Is in the Pudding: 5 Common Mistakes for Business Owners to Avoid in Their Contracts

As a business owner, contracts are one of the most important ways to protect your business relationships and dealings. Unfortunately, there are many out there who fail to use contracts to their advantage and often face others who try to take advantage of them and all that their company has to offer. While contracts are one of the most important ways to protect your company, they can also cause problems if not prepared or executed correctly. It’s for these reasons that we’re here to discuss the most common mistakes for business owners to avoid when making and executing their contracts.


  • Failing to use a contract at all

Beware of the handshake deal! This is the single biggest mistake any business owner can make. It doesn’t matter if you’ve known the other party for thirty minutes or for your entire life, never trust a handshake or a verbal agreement when it comes to making a deal. A properly drafted and executed contract is your main line of defense against any problems that may arise in the future.


  • Doing it yourself

Thanks to the internet, everyone is in a “do-it-yourself” mindset these days. From filing their own taxes to drafting their own contracts, this DIY mentality is everywhere. However, there are some things that should be left to the experts and contract drafting is one of them. Contracts are rife with confusing legal terminology and protections that the average business owner might not fully understand. If you don’t have a legal professional draft your contracts, you risk leaving out these very important protections that can often mean the difference between getting sued and not getting sued. An improperly drafted contract might fail to define important aspects of your agreement or even be completely illegal under your state’s laws.


  • Ambiguity

Contractual ambiguities are a major problem because if there is ever an issue between you and the other party, the issue can only be decided in court. Even further, ambiguities tend to cause miscommunication and misunderstandings between the contracting parties. Clear contracts are essential to making sure that everyone is on the same page. It helps define and control expectations. Again, having the help of a professional is key to making sure your contracts are clear, concise, and provide the protection your business needs.


  • Omissions

Another common error is when business owners completely leave out certain important aspects or clauses in their agreement. One of the reasons it’s so common is because its really easy for someone without the relevant legal experience to leave out certain details that may seem unimportant, but are actually vital to the enforceability of your contract. This is yet another reason why it’s so important to consult with an attorney to make sure nothing essential is left off the page.


  • Waiting too long to bring in legal help

If you’ve been served with a legal issue related to an agreement you’ve entered into or contract you’ve signed, then it’s too late to turn back the clocks. As we touched on above, bringing in legal help at the start to help you create template contracts and advise on what should and should not be included is the key to preventing litigation and conflict in the future.

If you are a business owner and need advice or help drafting contracts, our team at IGC is experienced and prepared to help! Contact us today at (925) 399-1529 and let us help protect you and your business.

Integrated General Counsel