Business Basics: Creating Concrete Contracts
As a business owner, it’s important to appreciate the essence of legal documents. People have lost thousands and even millions for not having foolproof contracts. It doesn’t matter whether you are doing business with a long-time friend or family member. Having everything done legally can save you a great deal of money and stress. Here are some of the tips you need to know when it comes to creating concrete contracts.
Always Have Everything in Writing
If you’d like to do business with someone, it’s a good idea to agree on the terms of exchanging value. Both parties need to have clarity on what expectations the other has to meet for the business deal to be fair. Whether you are dealing with another business or a client, having the terms in writing is critical. Jot down all the terms you’d like to have considered in your agreement. This way, the other party can take a look at it to see whether they agree with everything or not. Having the contract in writing makes it legally binding, and easy to enforce. A written contract is something both parties need to sign to prove consent. People have lost huge sums of money because they only had verbal contracts. Unfortunately, such agreements are harder to prove or enforce in a court of law. If the contract has to be verbal, take time to study the requirements of such an agreement. That way, you can learn what a court needs to see for the agreement to stand. These requirements may vary depending on your state’s laws. If you are in different states, you should both agree on which state’s laws will govern the contract. Verbal agreements are the hardest to enforce, so it is worth your time to look into cheap and easy written contracts that can be signed and recorded, such as DocuSign templates.
Hire a Professional
Since it’s not easy to know all the business laws, it is a good idea to work with a professional. If you are new in business, you don’t need to hire a full-time business attorney. You can hire a legal consultant to help you draft the document. Working with a professional will help you ensure that you’ve used correct legal terms. Your contract needs to have zero loopholes. Writing it on your own isn’t a good idea if you don’t know which areas an expert can exploit in court. If your opponent finds a lawyer to poke holes in the document, you can count on losing that legal battle. And this could mean thousands of dollars. With an expert, you will easily be able to spell out the terms of terminating the contract. Since they have all the experience, they can also help you out when it comes to dispute resolution. Moreover, a professional also helps you to learn about any new trends that are likely to save you time. For instance, people have moved to creating and signing contracts online. This is perfect for keeping contracts simple. The best part is that the parties involved can be far away from each other.
Correct Identification of Each Party
It’s important to appreciate the correct identification of the parties involved in contracts. Remember, each party is a legal entity. That means you should use the correct legal names of the people or businesses in question. Leaving out a simple suffix such as “LLC” could render the contract useless in court.
Wrapping Up: The Take-Away
Always take your business seriously. This is critical even when you are dealing with close friends and family members. Putting too much trust in the other party can lead to huge losses. Make sure you only agree to what you can deliver-never overpromise. Also, remember to keep your contracts confidential. You don’t want any business information getting out to people who do not need to know anything about it.
