Do you run a business? If yes, and if you’ve already started living your dream of being an entrepreneur, you must be now trying to adapt the skills of writing a business contract. As soon as you start running your own business, there will arise several situations when you’ll need to draft a business contract, negotiate, and even sign one on a daily basis. Through business contracts, the two parties establish cooperation and compliance.
Poorly written business contracts don’t serve the intended purpose due to which the ultimate purpose of the contract might get nullified. So, instead of leaving your business vulnerable, here are a few tips that you should take into account while drafting a business contract.
Make sure everything is in writing
Whenever you enter into a commercial contract, you should get everything in writing. Wouldn’t you like to have written proof of the agreement through which both parties are bound? In the case of small businesses, oral agreements work, but these are tough to enforce. Memories of people can’t be relied on as things might be misinterpreted or misremembered. This is when you might need a business contract lawyer. Learn more about them here.
Write in a language that can be understood easily
Contrary to what most lawyers think, a business contract should be written in a language that is understood by all. You don’t have to be under the wrong notion that a business contract should be written in tough legal language. In fact, the best business contracts are those that are written in plain and simple English. The easiest way of writing a contract is to label every paragraph in a separate manner.
Identify every part in the correct manner
You would be rather alarmed to know how most businessmen get this wrong and how vital it is to get it right. You should include the right legal names in the contract who are liable for carrying forward the obligations under the agreement. If a business is structured in the form of a corporation or an LLC, you should recognize it by its legal name.
Mention all payment liabilities clearly
Mention everything clearly – who should pay whom, when payments have to be made, and what sort of conditions are there for the payments to be made. Since you know that money is something that leads to all sorts of misunderstandings, you should pay more attention to this. When you decide to pay in installments or whenever your job gets completed, mention that. Be specific about the times, dates, and requirements.
Accept a way-out in case of issues
Mention in your business contract what you and the other party will do in case something goes wrong. You both might agree on the fact that you can tackle the dispute through mediation or arbitration rather than running to the court.
Therefore, if you were pondering over how to write a business contract, keep in mind the above-listed ways of drafting a professional contract.