In business dealings, three words are key: Get it in writing. Even though a handshake and a verbal agreement may seem like enough—and even though you may have heard that contracts are just made to be broken, you have a much greater chance for gaining legal recourse with a signed and notarized business agreement fully outlining the details of a transaction or ongoing relationship. And although an airtight business contract may be what allows you to win in court should litigation be necessary, it may also be what prevents a court case from developing to begin with.
A contract with a vendor would be a typical example where a business contract is helpful, as they are providing goods and services to you for payment. In working with your business attorney to create a solid agreement, focus on the following:
- List all the individuals and companies involved in the agreement.
- Use language that is clear, so everyone is in complete understanding of all the details. While every contract is prone to having some legalese, the agreement should be easy to read, with all parties involved comfortable in making necessary changes before signing.
- Outline terms of the contract, and goods and services being offered, in as much detail as possible. Any necessary timeframes should be written into the agreement (especially if this is a finite deal with a beginning and ending date), along with the payment schedule. If there are grace periods for payments or penalties for late pays, make sure that is all explained in detail as well.
- Create a dispute resolution clause. While this may seem unnecessary in the beginning—and especially if you are working with someone you have known for a while—creating a dispute resolution plan is much easier to do while everyone is still getting along! Deciding ahead of time how a dispute would be handled allows you to designate what type of setting you want any issues decided in, whether in court with litigation or a more casual setting in mediation or arbitration. Typically, location is included too, stating which county (or courthouse) the dispute would be settled in, as well as who would pay legal fees.
Creating a good working relationship with a business attorney as soon as you begin setting up the structure of your business can be vital to your success as you make decisions regarding what type of corporation or partnership you want to set up, begin hiring employees and contractors, protecting intellectual property, and more.
Do you need legal assistance with a business dispute? If so, contact the Bolender Law Firm. Our attorneys are experienced in representing clients in state and federal courts, at both the trial and appellate level. Call us at 310-320-0725 now or submit an easy consultation request online. We are here to help!