A contract, simply put, is a formal agreement put into writing. It’s when entire businesses are involved, however, that can make a business contract quite a bit of an overwhelming phrase to hear. After all, not being able to fulfill contracts, or even just writing the wrong set of information, can bring a whole host of troubles of you.
In fact, according to numbers from the International Association for Contract and Commercial Management, 9 percent of all contracts made will most likely end up having some form of dispute or claim in the future. While these don’t necessarily evolve into full blown lawsuits, the number is still something that should be taken to mind. It’s also precisely because you don’t want any hassle in your business that you need to be getting it right. Here are some considerations when making a business contract:
- Cut the fluff and focus on writing what you understand. Sometimes, a lot of individuals get the impression that just because it’s a contract means it has to be written with all the fluffy words in mind. Knowing how to write in “legalese” isn’t a requirement when it comes to writing contracts, but understanding how some terms can have different meanings is an important plus. This means the best contracts really are the ones that can be understood by laymen, and the best contracts are those that both parties can understand thouroughly.
- Be as detailed as you need to be. A lot of contracts tend to cover a lot of parts, and as such can be very long at first glance. However, segmenting and separating the contract into different units can be easily understandable by the party. You can even label each paragraph with a topic and number, allowing for easy navigation. Try to make sure the rights and responsibilities of each party are written in a language that doesn’t leave a lot of room for interpretation.
- Make sure payment details are specified, especially when there are specific assets, properties, and monetary agreements involved. Try to indicate as to when and how specific resources will be released as well. For instance, if you have a contract with someone that’s supposed to paint your business office, there can be a part of the contract that states a certain amount of payment will only be paid depending on the number of rooms painted that fits a particular set of standards.
- Consider termination as well. It’s safe to include terms that will terminate the contract when they are done, or if certain rules are violated, or if certain conditions are met.
Try to remember that confidentiality counts as well. A confidentiality clause will allow you to protect the information on your business practices especially when they are being seen by other parties.
- Try to check if your business contract is legal in the first place. Try to consult if the terms of your contract are within the legal parameters of state rules and laws that are related to your business. A lawyer can help in this regard.
Do remember however that when it comes to creating a business contract, there’s no such thing as “perfect.” You can’t be pulling off a perfect draft in one go, as not only do you need to have the right kind of technical know how in terms of terminology, but you will also have other parties to deal with in terms of making sure everything in the contract is up to par. A legal consultant or a lawyer might be able to give you valuable insight when it comes to the language you have to use, and even write the contract themselves. Click here to learn more.