Contracts can be oral or in writing. Good business practice is to always reduce your agreement to writing. Regardless whether oral or written, a contract is an agreement between two parties that binds them to carry out (or not carry out) certain or specific actions. The requirements of a contract are an offer, an acceptance of that offer, and some type of “consideration” such as payment in exchange for services provided. A written contract should be the manifestation of the parties’ meeting of minds over those basic elements.
A written contract is easier to enforce than a verbal contract, especially when it is well written and clearly outlines the rights and responsibilities of the parties. Written contracts also help avoid future disputes that arise from confusion or disagreement about what may have been verbally agreed to.
Strong, healthy, and mutually beneficial business relationships are often based on written contracts. In a contract, the expectations between the parties (the people or businesses signing the contract) are defined, and agreements are clarified, so all parties involved know what to expect from the other party, and what is expected of them. A solid contract that details your expectations and explains your rights and remedies is critical to protecting your interests.
Contracts Should Be Specific, Not General
Informal or short summary agreements may feel easier to maintain, or feel like an expression of trust and honor. However, without clearly detailing the agreed terms, an informal or short agreement may place you at unnecessary risk and threaten to destroy business relationships. Contracts that are first negotiated, then well-drafted in detail, can clear up discrepancies and prevent misunderstandings that lead to wasted time, money, and resources in the future.
If a party is uninformed or unsure of what to expect in a business relationship, it can lead to controversy and lawsuits. It is imperative to make it very clear in the contract the expectations of the parties. Be careful not to use vague or open-ended terminology. By being specific, many conflicts can be avoided. In order to be successful, all parties must be on the same page!
Could Uniform Contracts Be a Good Fit for Your Organization?
It can be a great idea to have a standardized form contract, if you provide the same goods and services to the same kind of clients on a regular basis. When you need to develop a standard form contract that best meets your needs, it is always advisable to seek the help of a qualified business lawyer. Business law attorneys will help ensure the standardized contract is well written and includes all the protections you and your business need.
Contract Termination Details: Why Are They Important?
Before a contract is signed, it should be carefully read and renegotiated if any terms seem difficult to meet. Business law attorneys can assist clients with this process. If the terms do not satisfy all parties, the contract can be abandoned and the parties can walk away with no agreement. Once the contract is signed, however, it can only be terminated in certain circumstances. Defining in the agreement when a contract can be terminated can be a valuable tool to prevent future disputes.
Terminating a contract refers to ending it before the parties have completely fulfilled all terms. A termination may be allowed when permitted by certain laws or the terms of the contract. These reasons sometimes include the following: impossibility of performance or execution, mutual agreement, or breach (violation) of certain terms of the contract. Sometimes, this means a party may be released from finishing their obligations under the contract. But sometimes, terminating a contract without good cause or legal justification can lead to an expensive lawsuit. As a result, good legal advice should be sought when considering terminating a contract.
How Should You Go About Building a Contract?
When drafting a contract, it is best to seek the legal assistance of an experienced attorney. Our business law attorneys at Morefield Speicher Bachman understand the laws governing contracts and best-practices procedures, which allows us to determine the language and terms that will best protect you and your business.
Businesses frequently encounter disputes and other issues over contracts. It doesn’t mean that your business can’t continue operations. Our business law attorneys at Morefield Speicher Bachman can help you resolve business disputes, and litigate claims when necessary. As a business owner or leader, you can rely on us to help you successfully navigate every step of the dispute resolution process while you stay focused on operations. Call (913) 839-2808 today to speak with one of our business law and litigation attorneys.