Writing a business contract may look straightforward. Yet, if it were, you would not get so many businesses ending up in disputes because one claims the other has breached the terms of their agreement.
Contracts will be vital to setting the rules for all your business relationships, so you must get them right from the outset.
Here are some things they need to contain:
An offer and acceptance
You can talk about doing business together all you like. Yet until you put it in writing and the other party signs to agree to the terms, you have no contract. Verbal contracts can occasionally stand up in court, yet it is far safer to put every last detail in writing.
A duration
You agree to supply your product for $1,000 a unit. Your costs will increase in time, so you need to limit the validity of your agreement. You do not still want to be tied into selling for that price in 10 years.
Consequences for failure to meet the terms
You may be able to avoid a full-blown dispute if you set out penalties for failure to comply from the beginning. For example, late payment fees can encourage people to meet deadlines and provide compensation for the other party when they don’t.
A way to end your relationship
One of you might need to back out early. What then? Doing this without having an agreed period of notice in place could leave the other in the lurch.
Getting legal help to ensure that your contracts are well written reduces the risk of needing legal assistance because you have fallen into a dispute with those you do business with.
