The Dos and Don'ts of Business Contracts
Whether you’re launching your first company or you’ve been in business for years, creating and negotiating business contracts can be an intimidating experience — especially if you don’t know what you’re doing. Fortunately, there are steps to make the process easier and more successful from start to finish. Whether you’re looking to create or modify a contract, below are some dos and don’ts of contracts every business owner should follow when dealing with lawyers, clients, and vendors alike.
The Importance of a Simple Contract
A business contract should act as a detailed map of how the agreement will function, and it's best to have it written clearly in simple terms. It's essential to each party’s interests to include clauses detailing the rights and obligations of each party, agreeing on terminations, and laying out how to resolve disputes. If disputes aren't resolved using terms in the contract itself, they may have to be decided by a judge or arbitrator. The process can be time-consuming and costly.
Key Information To Include in Your Contract
Never enter into a contract you haven’t read thoroughly or don’t understand. Before you sign any contract, ensure it includes:
Your business address
A description of your company
Contact information for each party if something goes wrong
A statement that neither party will hold itself liable for anything said or done by any other party
Be wary of contracts that include blank spaces — if not filled out, they could lead to costly consequences for your business. Finally, get everything in writing — you can never have too many copies of your contract handy.
What Happens When You Negotiate a Contract?
The idea of contract negotiation can be intimidating, but it's necessary. To begin, set objectives, and research the other party's interests and motives. This way, you'll know what the party is looking for and better understand what's required. Next, don't rush into negotiations — take your time to carefully examine contracts to determine if any clauses might benefit you in the future or impede your success. Lastly, don't be afraid to ask questions during negotiations; never assume you understand everything in a contract before signing.
Common Ways To Modify Existing Contracts
Small businesses often try to negotiate contracts themselves. However, if you’re a small business owner, it’s crucial to know that negotiations without legal counsel can put your business at risk. Always consult an attorney before changing a contract or negotiating with another party.
To present, edit, and modify your contract, use a free tool to extract PDF pages. For instance, you may wish to use sections of an existing business contract to build a new contract. Create an updated PDF for your new contract by selecting the appropriate pages you require.
Entering Into Contracts
If you're a business owner, it’s essential to know what you’re getting into when you sign a contract. The best way to ensure your agreements are clear and legally binding is to seek professional legal advice when entering into contracts.
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