Contracts are inherent business agreements that typically outline what a business owner needs to do and also give employees, suppliers, or clients guidelines as to how they are expected to conduct themselves. A well-formulated contract can usually save a business significant time and money when it comes to disputes and also reduce the chances of errors because of miscommunication.
A reputable small business lawyer can play an extremely beneficial role in helping small businesses get the contracts they need to conduct their operations. A written contract or agreement is usually a legal document between two parties defining a contractual relationship over the course of a transaction, and they are legally binding with provisions known as clauses.
Steps to Drafting Contracts
The first step to drafting a contract is gathering all of the relevant information. This will mean that the top of a contract will include the names of the parties involved in the contract as well as its effective date.
The next item to be considered will be the products or services being provided in exchange for a payment. People should be sure to be highly specific in this section because leaving anything open to interpretation can lead to one party seeking more work than was originally intended.
A contract should also specify how long a contractual relationship will last, as many contracts will be valid for 90 days but there can be other finite dates as well. If a client is willing to agree to work on an ongoing basis, such an agreement could also be spelled out here.
When it comes to business deals, breach of contract claims or negligence claims are extremely common, so both parties will want to make sure terms are clear relating to penalties for any kind of non-payment or delivery of products or services. It will also be important for a party to be sure that the phrase “null and void” is included such that a party will no longer be obligated to perform any work when the other party does not fulfill its contractual obligations.
A contract should also specify how the parties will resolve any disputes, as civil litigation is a common outcome but not always a desirable one for most parties. A contract can include a provision forcing the parties to participate in an alternative dispute resolution method, like mediation or arbitration.
The final aspect of any contract will be lines for signatures and dates, because a contract will not be enforceable until both parties have signed on the bottom lines. It typically does not matter which party signs the contract first.
Additional Contract Tips
Business contracts should always be written in a language both parties can easily understand, and the parties should be sure the right terms are being used. This will mean making sure a contract does not confuse some of the common misspellings that can dramatically alter the meanings, such as affect versus effect, among versus between, insure versus ensure, bimonthly versus semimonthly, continual versus continuous, mean versus median, and practical versus practicable.
Language in a contract also needs to be highly specific, so if a certain date is desired, that specific date needs to be mentioned. When either party wants to make a change to a contract, it will be necessary to add a written amendment to a contract instead of relying on an oral agreement because courts often will not accept oral agreements as being part of contracts.
Many contract disputes concern money, so it is also important to ensure that a contract spells out the terms of payments. This means that when payments are conditional based on work performed, the terms need to be outlined so they are clear.
When confidentiality is a concern, then a contract should also include provisions binding one party from disclosing business information or information included in a contract to any other parties. There should also be provisions relating to how either party can terminate the contract.
Speak with an Experienced Mountain View Small Business Attorney
When you need help with any kind of small business contrast in California, Kalia Law P.C. is ready to help. Our firm understands how important these kinds of agreements can be and we will be able to help you craft the contract that protects your company and serves all of your long-term interests.
We offer a flat fee for business legal services such as contracts and agreements. You can call (650) 701-7617 or contact us online to arrange an initial appointment.