Business contracts may or may not be a common thing for you. However, business disputes are pretty much popular and experienced by most business owners.
While dealing with them is always an option, an ideal solution here is to avoid them when possible.
This is where business contracts are relevant.
As a legal document, business contracts outline the manner in which operations are conducted, what are the duties and responsibilities of all in the agreement, etc.
In case you are not sure how to create a business contract or what you should look for in the contract before signing it, this article will help you with the same.
Here are seven tips you must follow before signing an agreement.
7 Tips To Follow Before Entering Into A Contract
1. Enter Into Written Agreements
It is known that contracts are also done orally which means that the two parties shake their hands and promise to act in a decided manner. While this might sound easy, it is a good practice to have a written document with all of the terms and conditions stated.
2. Research The Parties To The New Contract
You must have significant information about the company or person with which you are entering into an agreement. Having clarity is important and hence the need for due diligence. You can also check the creditworthiness of the party.
3. Consult A Lawyer
Business contracts have legal terms that might not be understood by non-lawyers. It is best advised to consult a lawyer and have him go through the contract so that you can understand each clause in the contract.
4. Payment Terms
Before signing the contract, go through the section that mentions the payment terms of the business. Whether it is a one-time payment or a recurring one, make sure the terms written are valid and agreed upon by both parties. In addition to the above, keep tabs on the clause that mentions the consequences or when you fail to pay the desired amount.
Check the termination clause added in the contract. Even though the two parties pledge to perform their duties for a certain time period, disputes occur and so the need for a termination clause. Specifically, the clause suggests what would happen if the contract is terminated before the scheduled date. Also, what happens when the contract is breached and who is liable for the repayment?
6. Concerning The Law
States have their own governing law, and irrespective of what clause has been added in the business contract, if the same is not acceptable by the law, it is not upheld in court.
Hence, you must go through the contract and further through the state law to be sure of what the contract exactly means and its validity.
7. A Thorough Read
Lastly, go through the document thoroughly.
Read through each and every clause, one line after the other so that you don't misinterpret it. In case of confusion, reach out to the concerned party to know more about it and then if convinced, sign the contract.
Common Terms In A Business Contract
Settlement: coming to terms that all the parties agree and stand by.
Litigation: Handling disputes in the court.
Termination: Willfully ending an agreement.
Follow the steps given above to sign contracts in an effective manner. I hope it’ll help you in your future endeavors, and in saving the business from troubles too.
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Yoel “Mo” Molina, I am a lifelong resident of Miami, Fl. I am a graduate of Miami Senior High, Class of 1992, Georgia Institute of Technology, B.S. 1997 and University of Maine School of Law, J.D. 2001. I have been practicing law in Miami Since 2001. I am a former training prosecutor in the Miami-Dade State Attorney’s Office. I have experience in jury trials, appeals, and administrative hearings. I have appeared before judges across the State. My experience ranges from civil litigation matters, collection matters, foreclosure, business and corporate, contracts, real estate, leases and employment matters..
"Mr. Molina has always been there for us with timely, reliable and competent advice. He is an important and valuable part of our team." Corporate Client Eric Delgado, President of American International Export, Inc., a worldwide importer and exporter of brand name appliance parts.
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"My name is Anastasia Yecke Gude and I am the owner of Healing Hands Therapeutic Massage LLC. In the process of my company’s growth and expansion, I suddenly found myself a few weeks ago in need of a 1099 contractor agreement, and I needed it ASAP. As in, the very next day! I contacted the Law Office of Yoel Molina and his assistant put me in touch with Mo. I sent him what I had drafted up and he replied within a few hours with suggested revisions and clarifications, as well as a few insights I had not even considered. I was thoroughly impressed by the quality of work he provided, especially considering the time crunch I put him in (sorry, Mo!). I definitely recommend his services to anyone in need of a good contract attorney, and I will be calling him again for future work…hopefully in less of a rush next time!"