The lifeblood of every business is the contracts that it has with its employees, vendors, independent contractors, customers, and more. Having a well written contract can mean the difference between the continued success of your business and legal and financial distress. The following are five things that every contract should include in order for your business to continue operating successfully in your industry. To learn more about business contracts, speak with an experienced business law attorney in your area today.
Do you know what you need to have in every business contract? Learn about five things that every contract should include in order to run a successful enterprise.
Get it in Writing
The most important part of every contract is that it must be in writing. Handshake agreements or verbal agreements document nothing and are extremely difficult to enforce in court if one side does not follow through with its end of the bargain. You should always get a contract in writing. By writing out a contract, all of the terms are memorialized for all parties and signed in agreement. Each party retains a copy of the contract that holds them to the terms of the agreement. If one party does not hold up its end, it is easy to go to court with the physical contract in hand to seek enforcement of the agreed-upon terms.
Be Specific in Your Terms
Your contract should be specific in its terms. This includes everything from naming the correct parties involved to the rights and obligations of each side beholden to the contract. Depending on the type of contract, this can include employment terms, inventory and supply terms, lease agreements, and more. Your terms should also be specific as to payment obligations for who is obligated to pay whom, for what amount, and at what intervals. You may even get into the specifics of what methods of payment are acceptable. Do you prefer a wire transfer, check, Bitcoin, or cash? The more specific your terms are in the contract, the easier the contract is to complete and enforce.
Dictate Terms for Contract Termination
Your contract should also include specific terms for what constitutes a valid termination of the contract. Circumstances can arise in which you no longer wish to fulfill the terms of the agreement, and putting terms into the contract for when a party can legally terminate the contract without a breach of contract claim is important. For example, if one side misses too many deadlines, the other party may be allowed to terminate the contract without repercussions.
Include Dispute Resolution Terms
You should dictate terms for dispute resolution into every contract should disagreements arise during the course of the agreement. If a problem occurs while the contract is being fulfilled, you can include in the contract that the parties go to arbitration, mediation, or attempt another type of alternative dispute resolution before terminating the agreement or suing for breach of contract.
Confidentiality Matters
Finally, include as part of your business contracts a confidentiality clause. Oftentimes in business, when your company does business with another or hires an employee, those parties becomes privilege to sensitive business information. Incorporating a confidentiality clause into every contract ensures that no one will steal or appropriate your protected business property for his or her own use.
Talk to a Counsel for Creators attorney to learn more about business contracts and what yours should include to protect your business.
