Contracts are an important element to doing business, but how do you know you are creating a strong contract that covers all of the elements you need?
Put it in writing!
Verbal agreements do hold some weight, but ultimately they can be hard to enforce. Never take that risk, always get your terms in written down in plain and easy to understand language. Legal language might look impressive, but if no one knows what it actually means, it will be extremely difficult to argue there was a meeting of the minds.
Correctly identify all parties!
As obvious as this may seem, not using correct legal names is a common mistake. Make sure the proper names of all parties are used and DBA is correctly applied if using business names. If it’s between legal entities, then make sure the entities are listed, with an individual with authority signing on behalf of the entity.
It’s in the details!
Make sure to clearly outline the terms and conditions of the contract. Anything that has been previously verbally agreed upon should be added as well. Items that are mistakenly left out can be added with an amendment, generally only if both sides agree. Typically all terms should be in the original contract. Outside oral agreement will generally not be enforceable.
What happens upon termination?
Termination is not something you want to think about, but it needs to be covered in your contract. Not only do you need to include a termination date but also clauses that cover what will happen if one of the parties is in default of the contract. This is also a good section to add dispute resolution terms.
Still not feeling confident? No worries an experienced contract lawyer can look over your contract before you head to the signing table and help you correct areas that need more attention or have been accidentally left out. Need a new contract drafted? Feel free to reach out to our office for help and a flat fee quote.
Sarah E. Holmes is a Philadelphia business attorney and strategist that helps start ups and established businesses looking to expand, protect their assets and increase their profits in an approachable, down-to-earth way. When you're looking for a business lawyer in Philadelphia, the Main Line or New Jersey, we can help.