A business contract is important to not only secure the daily operations of your business, but also for avoiding confrontations, conflicts, and other disputes down the line. This is why it is strongly recommended that you consult with a business attorney to help minimize the potential for contract issues.
But what goes into drafting a business contract? What should a business contract say and not say?
Read on to learn more about some of the most important tips for developing a contract.
1. Always Use a Written Contract
Although there are some cases in which an oral contract or even a handshake agreement might be legally binding, it’s much more difficult to enforce in court.
In some cases, these oral contracts are completely unenforceable. This is why you should never depend solely on oral contracts or a handshake.
Any time significant or substantial interests are involved, the best form of protection is always a written contract, signed by both parties, with witnesses.
Using any kind of contract on its own warrants the entire document being written. There is much less risk for all individuals signing a business contract when it is in writing.
2. Make Sure You Have the Right Person Signing the Contract
It is essential to ensure that any individual signing a written contract with you in Florida has the authority to do this. You need to verify this information well in advance of organizing the signing meeting.
Signing a contract with an unauthorized person can make a contract null and void in some circumstances.
3. Have the Document Reviewed for Straightforward Language
A Florida business attorney can help you craft a compelling and clear business contract that protects your interests.
Since this can be the cornerstone of preventing legal disputes down the line, it also needs to be easily interpreted by a judge in the event that you do have a conflict that goes to the point of litigation.
Investing a little bit of time into clarifying the language can be significantly beneficial.
4. Always Identify Key Stakeholders
The contract needs to clearly identify the individuals who will be involved in the contract. The legal name for each party has to be clearly outlined in order for the contract to be enforceable in Florida court.
Meaning, do not use pseudonyms or nicknames, and double check to make sure all of these details have been addressed appropriately.
5. Clarify All Payment Obligations
Since many different business contract conflicts can emerge as a result of confusion over payment terms, it is imperative that this section of your contract be written very clearly.
Make sure that it is clear about who is responsible for paying whom, when payments should be made, and what conditions that payments should be made as well.
Money is frequently the heart of many different business contract disputes, so be sure to clarify this information well in advance.
6. Explain Termination Clauses
Protecting you and the other party is critical by including termination clauses. There may be one or more reasons in which both parties may be interested in terminating the contract or even in situations where one party wants to end the contract before incurring future losses.
For example, if one party is responsible for delivering goods or services but repeatedly misses deadlines, then you may have a claim for terminating the contract.
Putting this in writing well in advance in the contract itself can help to minimize confusion and increase the chances of compliance. It also gives you a way out in the event that the other party does not hold up his or her end of the deal.
7. Mention Confidentiality
In many business contracts in Florida, it is unavoidable that one party will learn private information about the other. Maintaining confidentiality and explaining this clearly in the written contract is crucial.
It can help to avoid a great deal of legal disputes if you explain the importance of confidentiality.
In the event that the issue does become a matter of litigation reviewed by a judge, terms of confidentiality explained in the contract can clearly stipulate to situations in which one party has not held up his or her end of the deal.
Read more about the importance of business contracts and why many startup businesses skip this step.
Get a Solid Business Contract with a Business Attorney
If you have a contract dispute and need help from a knowledgeable Florida business attorney, do not hesitate to reach out for assistance sooner rather than later. Doing so could be an important step forward for protecting your interests and resolving an issue effectively.