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By Anita Ginsburg
Running a new business is complicated. In addition to simply creating and selling your product or service, you need to take care of marketing, supplier negotiations, building maintenance, and a hundred other things.
Some of the most complicated tasks are the legal ones. Even after filing for a business license and getting everything organized, you may need to make contracts for your business regularly. Contracts that are not well-made could result in financial and legal hassles for your organization. To help avoid this, here are some tips to create ironclad contracts from the start.
Always get it in writing
Never agree on something through a handshake or email. Though this is something that worked for you and your friends, it’s a non-starter between you, your clients, and your vendors.
It’s not difficult to find a basic contract template online. Use that to establish a legal connection between all of the involved parties. In the future, this contract could be used to reinforce an agreement, add clauses, or—worst-case scenarios—initiate a court case.
Keep it simple
If you’ve ever read an official contract before, then you know how complicated they get. The legalese developed over centuries can make even standard documents incredibly tough to decipher for anyone not trained in contract law.
Don’t do this with your clients and vendors. Simple contracts are just as ironclad as those translated into legalese. Simply lay out the rights and responsibilities of each party in your contract. You should also lay out the consequences of what will happen if any party breaches the contract. By making everything as clear as possible, you help prevent misunderstandings further down the line. If it needs to be translated into a more official sounding document later, you can have a lawyer help you.
Specify all details
Contracts are all about specificity, so don’t leave anything out. If you leave out vital information because you think it’s obvious or because you think the other party already knows it, you’re allowing loopholes. These loopholes could damage your position or give the other parties a way to escape the contract without technically breaking it.
There’s no penalty for adding everything possible when it comes to responsibilities and payment obligations. Therefore, include a variety of eventualities to ensure that everything is covered, even if you think certain things are unlikely. The more you include in your agreement, the clearer it is should a disagreement occur later.
Ask for help
Don’t be ashamed to ask for assistance to develop contracts, especially when you’re a new business. There’s a good chance you don’t have complete knowledge of how to construct one. For this, consider business transaction law services.
These types of organizations, like Boynton Waldron Doleac Woodman, provide legal services throughout the life-cycle of a company. This includes the formation of your organization and the contracts required for your clients and your vendors. Should you decide to go with business transaction law services, then look for one that deals with small and medium-sized companies. They have a better handle of your needs than one that usually only works with Fortune 500 organizations.
In the end, your contracts are how you maintain your business’s operations. When they’re ironclad, your new company thrives instead of just surviving. Take advantage of the suggestions above to develop the right agreements for your customers and vendors.
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Anita Ginsburg is a freelance writer from Denver, CO. She studied at Colorado State University and now enjoys writing about health, business, and family. A mother of two wonderful children, she loves traveling with her family whenever she isn’t writing. You can find her on Twitter @anitaginsburg.
