In business dealings, a well-prepared contract is essential. Contracts outline what is expected from all involved parties, and what happens if the specified terms are not met. Effectively, this provides a level of protection for you as the business owner as well as the client.
If you have never prepared a business contract before, knowing what to include can be quite confusing. An effective business agreement should contain all the required details, but it should also be easy to comprehend. Here are six tips you can use to write a bulletproof contract.
1. Include Specific Payment Terms
The payment section is arguably the most crucial part of any contract. Knowing exactly when and how you’ll be getting paid will eliminate much of the stress from your business dealings. When writing your contract, be specific as possible with the payment details. It is vital to include any information regarding the total payment amount and any required deposits.
If possible, avoid using general timeframes. Doing so can create loop-holes in your contract, potentially leading to late payments. Instead, outline the specific dates that you must receive payment by.
2. Use Simple Language
While an effective contract should be very specific, it also should be easy to read and understand. Many businesses tend to use fancy legal terms when writing a contract because they think it makes it appear more professional. However, the vast majority of the general public doesn’t use this kind of lingo in their day to day speech. An overly wordy or complicated business contract can be hard to understand and may confuse a potential client.
3. Keep the Client in Mind
As mentioned before, a business contract not only serves as a protection for you but your client as well. When preparing the document, make sure that it is balanced and doesn’t favor one side—ensuring that all parties are treated fairly and with respect is key to all successful business dealings.
4. Have a Dispute Resolution Plan
Unfortunately, not every business dealing or transaction will go exactly as planned. Whether the client is unsatisfied with the product or service provided, or you have failed to receive payment, its a good idea to have a plan on how to settle a disagreement. It is up to you to decide whether you wish to settle the dispute privately or through the court system. Just be sure to specify in your contract.
5. Specify Contract Termination Details
All professional contracts will include a list of reasonable circumstances in which it is acceptable to terminate the business agreement. This prevents any involved parties from being locked into a contract, given the failure to meet the agreed-upon terms.
6. Work With a Lawyer
Attorneys have invaluable experience when it comes to contracts. They know exactly what information needs to go into a business agreement to protect both you and your client.
It is wise to consult with an attorney before putting your contract into use. They can help you to ties up any loose ends and ensure that there are no loop-holes in the document. Having an established relationship with a lawyer can also simplify the resolution process if a dispute arises.
Get in Touch
At Reddy and Feldhake P.C., we specialize in the preparation of business contracts. For years we have been helping the residents of Tulsa, Oklahoma, with all of the legal aspects of owning a small business. If you have any questions or need assistance in writing your contract, please don’t hesitate to schedule a free consultation today.