The success of your business relies heavily on the quality of your contracts. Poorly written or overly vague contracts can leave you vulnerable to legal disputes that could escalate quickly, necessitating litigation. Additionally, always put business agreements in writing, as verbal agreements are much more difficult to enforce in court—if at all. Protect your business from potential legal issues by preparing clear and effective contracts. Here are some tips to help you get started.
While many businesses may be tempted to use online templates to create contracts, these tools are usually vague and leave you open to misunderstandings or disputes. When you establish a written agreement, use as many specifics as you can to ensure that you cover all of the important elements. Should you forget to include something, you can create a short written amendment. Make sure to identify each party correctly and spell out the specifics of any payment obligations.
Address Circumstances That Would Terminate the Contract
Include a section that lays out actions or circumstances that would prompt the termination of the business contract. For example, if a party fails to meet crucial deadlines, the other party should be able to terminate the contract without legal repercussions. Again, pointing to specific circumstances and identifying how the parties should address them as they arise will allow you and your business to navigate potential issues with greater clarity and confidence.
Include Plans For Dispute Resolution
A vital component of a solid business agreement is addressing how you will handle potential disputes. Having a clear plan of approach for navigating conflicts can save you time, money, and energy as you move toward a resolution. Many businesses state that they will attempt mediation or arbitration before proceeding to litigation. Including these details in your business contracts is a great way to protect your business from major stress and headaches in the event a dispute arises. As you finalize your business agreement, have a trusted business law attorney review the document to ensure that it affords you the necessary protections.
Contact Judex Law, LLC, today at (303) 523-4022 to learn more about how we can help you protect your Colorado business.