On Protecting Yourself Legally: Creating Business Contracts

signing a business contractIt goes without saying, but doing business is always full of agreements. You will always find yourself agreeing and disagreeing with suppliers, partners, and even customers. With all these transactions, you will always see compromises in one form or another. It’s important that you protect yourself legally, especially if there’s a large sum of money involved.

This is why contracts are important. What you need to do on your end is come up with a well-written one and be alert and vigilant when you are handed one. This guide, however, will focus on creating a good business contract.

Never complicate

Many businessmen make the mistake of using too much legalese in the hopes of sounding intimidating and intelligent. That always comes with a price: misunderstanding. Misunderstanding will then result in a string of consequences, such as complaints and costly problems. Instead, use simple language — the one that even your customers can understand.

Be specific

Other than using simple language, you need to make sure that the provisions and clauses in your contract are specific. This means that there should be no room for loopholes that others can exploit. Before stipulating all your provisions and clauses, have a lawyer from Townsville review the contract. Let them find generic clauses and ask for help on how you can simplify it.

Always include closure clauses

You need to note how you, your customers, and partners can terminate the partnership, transaction, and sale. Legally, the dissolution of agreements should be done gracefully so that there will be no problems. Specify all these in a separate clause, which is usually found at the last page of the contract.

These are just some things to keep in mind if you want to create a foolproof contract. What you should do before having your partners sign it: review, review, review.