Your Small Business Needs Well-Written Contracts
Your Oklahoma small business needs well-written contracts. But how do you know if yours is well-written? Fortunately, contracts today are much easier to read and understand because lawyers are starting to use plain, simple language instead of legalese. When a contract is hard to understand, you’re left wondering if the contract will actually do what you mean it to do.
Signs You Have a Well-Written Contract
Luckily, there are signs to look for to be sure your contract is well-written. A well-written contract should:
- Contain definitions of the terms it uses;
- Contain short, simple sentences;
- Have correct spelling and grammar;
- Not contain legalese or words that are difficult to understand;
- Spell out what happens in the “what if” situations;
- Address all the issues that fall under the contract;
- Not be repetitive;
- Be consistent in form and substance; and
- Be specific to the type of business, business operations, and to the parties involved.
Boilerplate Terms
Boilerplate terms appear in nearly every contract. They’re typically found at the end of the well-written contract. Check these terms carefully to be sure they make sense. Boilerplate terms usually include things like:
- Rules on how the contract will be interpreted;
- What state’s law will govern the subject matter of the contract;
- Which court has authority over disputes arising from the contract;
- Whether the contract can be assigned to someone else;
- What happens to the contract if a court finds any of its provisions to be invalid; and
- Whether third parties are considered to be third-party beneficiaries of the contract.
Negotiate Your Interests
When a contract is first drafted, the terms are often favorable to the party that drafted it. But what about your interests? That’s why it is important to remember that contracts are negotiable. You have the right to negotiate on every clause in a contract, including the boilerplate terms. Negotiating terms is one way an attorney can help you have a great contract.
Avoid DIY Contracts
Small business owners know they need to use contracts in their business. Many business owners try to save time and money by using contracts they download from the internet. But these contracts may contain terms that simply do not apply or do not make sense for your circumstances. So one reason to use an attorney for your contracts is to avoid the risks associated with including these unnecessary or inappropriate terms. Including terms that don’t apply or that don’t make sense for your circumstance can have detrimental effects. You run the risk of the agreement falling apart or damaging the business relationship with the other party.
The result of a failed contract is often expensive and time-consuming litigation. Invest a little money up front with an attorney who will help draft or review your contracts before you sign them. You could save thousands of dollars in court costs and attorneys fees down the road. All parties to the contract will also rest easier knowing that the contract says exactly what they mean it to say.
Your Next Step
If you’re ready to have an attorney help you draft a well-written contract for your business, or want an attorney to review a contract prepared by someone else, schedule a meeting with me today and let’s talk about how to best protect your interests.
