When you’re just entering into a business with someone, whether it’s a vendor, a customer, or a business partner, you want to make sure that you have a strong contract to protect you from future legal issues. A good business contract clearly explains what is expected from all parties and outlines the consequences of straying from the contract. The best contracts also anticipate future questions or issues that may arise, and lay out the framework for a future course of action. The following are 6 tips to make your business contracts stronger.
1) Get help from an attorney.
Your best bet is to get help from a contracts attorney early in the contract drafting process. Attorneys know the law. It’s their job to be able to structure contracts and use verbiage to ensure that each and every contract is legally enforceable. In addition, it’s never a bad idea to get your existing contracts reviewed by an experienced attorney every year.
2) Ensure you have all the right names.
I know this one might sound ridiculous, but you really need to make sure that all of the names are correctly spelled and placed in the correct places. You would be surprised how many contracts have come unhinged because of a simple mistake. If things turn sour and you end up in litigation, it’s really difficult for a judge to hold John O. Smith responsible when it’s James Q. Smith who is listed in the contract.
Similarly, make sure that you are naming the right entity. For example, is it the individual owner you mean to hold liable for the contract’s contents, or the business entity they operate under? Is it both? For the same reasons, you also want to verify that the names are written in the correct spaces.
3) Make your contracts easy to understand.
In drafting a contract, your main goal is for you and the person that you’re entering into the contract with to come to a clear understanding about what it is you expect from each other. To make sure this happens, it’s best to use plain language. Misused legal jargon in a contract can lead to A LOT of legal trouble down the road. We’ve seen this happen in many DIY contracts like the ones you fill out online. Bad idea. Talk to an experienced contracts/business attorney so everyone is clear about what is being said.
4) Define payment obligations.
Make sure that you clearly explain when payment is due and the consequences for non-payment. You might take the time to explain what happens if the payor is unhappy with what they receive. Then, if this should ever happen in the future, you both can refer to your contracts and find the solution.
5) Agree on what justifies contract termination.
There are justified reasons to terminate a contract. Make sure to list these reasons in your contract. Remember, this isn’t just to list reasons why someone might terminate a contract with you, it’s also to clarify reasons you might terminate a contract with someone else. Contract termination goes both ways, so be sure to think about the appropriate reasons for termination from both perspectives.
6) Think about worst-case scenarios, and try to solve them in writing now.
It’s best to anticipate problems and wrinkles down the road. When you have a plan in place and set it in writing in a legally enforceable contract, it can help make a future problem easier to deal with. Try to brainstorm worst-case scenarios and what you would want to do if they ever happen with an experienced business lawyer. Business lawyers have usually dealt with many contracts and many breaches, and as a result, they can foresee legal problems down the road that you may never have thought of on your own.
Contact Us
For help drafting or reviewing your Florida business contracts, contact Cove Law for assistance. Our qualified Florida business law attorneys are happy to help you create or understand any of your business contracts. Give us a call at (954) 921-1121 today!
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