3 contract essentials 

On Behalf of | Dec 11, 2022 | Business & Commercial Law

As a business owner, you will need to deal with hundreds of people. Any one of them could cause you a problem that requires a legal solution.

Contracts can reduce the possibility of that happening. Provided, of course, they are well written. Here are some of the things they should contain:

1. Time limits

Things change. You don’t want to be tied into a contract that no longer serves you. Put expiration dates on your agreements and stipulate when you can renegotiate prices, what actions can cause a contract to be canceled unilaterally and any other kind of “escape clauses” you may need.

2. A way out

What if you don’t wish to continue working together and your contract still has time to run? Clarifying how you can end the agreement is crucial from the outset. When one of you is upset with the other or desperate to leave is not the time to negotiate. Consider notice periods, early termination penalties and, if in a partnership, rights to buy the other out.

3. Transparency 

Let’s say you’re selling vacations. If you don’t want to be held responsible when strikes or landslides disrupt plans, make it clear in the contract that you will not cover extra costs due to those two things. The more transparent and upfront you are, the less chance you lose any contract dispute that results. A court is likely to rule against anyone who fails to clearly explain their expectations in the contract, reasoning that the other party cannot have known what they meant if it was not written down.

Getting legal help to write your contacts is the best way to reduce the chance you need it to sort out problems caused by poorly written ones.