As a business owner, one of your biggest responsibilities is ensuring you protect your business as much as possible. When you reach a deal with a big client or choose a supplier to work with, you can’t rely only on a handshake agreement. You need to have a solid, strong contract, to protect your business interests and hopefully avoid a dispute later down the road.
So, here are seven tips to follow to create a strong contract for any business deal:
1. Make sure your contract is in writing and properly identifies the parties entering the contract. You want to ensure you include each party’s full business name to avoid making that aspect of the contract open to interpretation.
2. Include a detailed description of what services and/or products the contract is for. You want to identify clearly, in simple language, how each party will fulfill the contract.
3. Identify payment terms for the contract. If you will pay a consultant a certain amount upon contract signing and then the rest of the payment when their work is complete, lay that out. Plus, include information on what will happen if payment isn’t received on time. Or if one party does substandard work, how will that impact the payment terms?
4. Lay out how you and the other party will deal with a potential dispute. Maybe you want to agree on entering mediation or arbitration if you can’t work out a dispute on your own.
5. Give details on how and when this contract will end. As part of this, you may want to include language that gives a party notice to resolve an issue before it breaches the contract.
6. Protect your business’ confidential information by including language that the other party can’t divulge your business’ private information. You may even want to establish what damages one party will have to pay if they don’t follow this confidentiality clause.
7. Have an experienced business law attorney write and review your business contract to ensure it really does protect your business interests well.
You want to see your business thrive and grow. Creating strong business contracts is an important part of that. With strong contracts, you help set up your business for long-term success.