When it comes to business transactions, you need a contract to protect yourself as well as any other parties involved. These documents are upheld by the legal system and will outline the duration of the agreement, the services, and the requested compensation. If these key elements are not included in the contract or the agreement is not fully understood by all parties, there may be a dispute at the end of the business transaction. To ensure that there are no headaches and frustration, here are a few mistakes that you will want to avoid as you draft business contracts.
1. Signing a Contract Without Reading It
Some contracts are short (one-pagers), while others are quite lengthy (10 pages or longer). Regardless of its length, it is imperative that you always read it in its entirety and do not simply skim over the text before signing your name on the dotted line. You could miss very important information regarding your obligations in upholding your end of the agreement, which could lead to the agreement becoming null and void due to your future actions. If you read the contract thoroughly, you will have time to request clarification for anything you are uncertain of. In addition, if there are any objections to the text within the contract, you will have a chance to request amendments.
2. Not Properly Identifying the Parties Involved
When you are drafting a business contract, there is always the risk of discrepancies in the future if the parties involved are not properly identified. Therefore, it is imperative that the accurate names and spellings of all businesses, independent contractors, etc. are used in the contract. When the contract is signed, make sure that the LLC is included if applicable to ensure professional liability instead of personal liability in the event of a dispute.
3. Failing to Include Provision
It is impossible to see into the future, so there is a risk that a company could go under before the transaction is complete. To ensure that a company does not default on its obligations, provisions should be written into the agreement. This particular section of the contract should specifically outline any steps that should be taken should a party go out of business for whatever reason and the contract needs to be dissolved as a result.
If you need assistance drafting business contracts for business transactions, consult with business transaction law services to avoid the aforementioned mistakes and others.Share