If you want to ensure that your small business is protected and try to avoid a potential breach of contracts and business disputes, it is imperative that solid contracts are drafted from the get-go. If you are new to owning a business, here are a few simple steps that will help you as you begin to draft business agreements.
Don't Rely on Oral Agreements
Any time that you are making a business deal, you need to make sure that you get it in actual writing. You should never rely on any kind of oral agreement. While oral agreements may be binding at times, it is risky for your business overall. After all, oral agreements can be hard to enforce or prove in a courtroom.
Use Simple Language
A business contract does not have to have a significant amount of business terms and legalese. As a small business owner, you simply need to use simple language that is clear, straight to the point, and easy for all parties to understand what is being signed. Any specific details and terms need to be clear in the event that the contract is indeed breached.
While legalese may not be required in a business contract, details most definitely are. After all, you can never be too cautious when it comes to business law. You do not want to be vague or generous when it comes to details. There should never be any room left for interpretation. This way, if you wind up in court due to the contract being violated, you will be able to defend yourself and the agreement.
Keep the Contract Confidential
If you are interested in the agreement remaining confidential, you will need to ensure this is clearly outlined in the contract. Draft a clause within the contract that binds all parties from disclosing your business practices, trade secrets, etc.
Specify Each Party
Any and all parties should be clearly identified — using their legal names — in the agreement. In the event that something goes awry at some point in time, those who should be held responsible need to be specified in the contract.
Identify How the Contract Can Be Terminated
As a general rule, contracts are not designed to be infinite. You can decide to include specific details in the agreement to give permission to end the business contract if the other party fails to uphold their end of the bargain, such as making on-time payments after a certain period of time, or however you see fit.
Drafting a business contract is not an easy task, so if you feel this isn't something that you want to do on your own, reach out to a business lawyer for assistance.
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