When your business begins to boom, and you begin to make a lot of contracts for partnerships as well as new customers, it is an indicator of success. However, you also need to be careful as the consequences of getting those contracts wrong can be huge. Hence, it is important to know the most common issues and mistakes you can commit while drafting business contracts yourself or getting them done by a business law firm in Santa Rosa, so that they can be avoided. Here is a list of the common mistakes you must watch out for:
1) Not taking into account what constitutes a breach – When your company is drawing up a contract, it is imperative to think about the various things that could possibly go wrong in your new business relationship, and the workaround to solve it. For instance, what if the party you are forging a partnership with doesn’t deliver a service on time? How do you propose to resolve this? You must enlist the exact details of all the potential breaches in your contract, so that the potential damage to your business is minimized. In short, it is important that you take into account, and document what constitutes a breach of contract, so that you know the steps to resolve it.
2) Business contract does not include dispute resolution provisions – Soliciting the services of a tribunal or court to decide the way to resolve a conflict in contract can turn out to be an expensive affair. Instead, you may consider including provisions for alternative dispute resolution. In most cases, this will involve getting a third party to assist both parties in coming to a resolution. While it is not mandatory for the parties involved to come to a resolution, a mediation agreement is binding and beneficial for both parties to enjoy a good working relationship.
3) You have not established a relationship with other business contracts – If you have more than one contract with the same party, you must also check if the new contract you are drafting fits in with them. Does the contract supersede the other signed contracts, or can it work alongside them? Enlist the minutest details that must be included in all your contracts.
4) The contract is way too vague– Be sure to use a language that is specific and not too broad in order to avoid more contractual issues down the line. Using the language that is vague can cause issues for both the parties. Drafting a business contract is by no means an easy task. Hence, it is a good idea to hire a lawyer to guide you through the entire process.
If you are looking to draft a business contract with a new customer or a new partner, fret not; for help is at hand. Hire the professional services of a reputable and reliable business law firm in Santa Rosa – Johnston Thomas Law – to help you draft the perfect business contract. Waste no time, call us today at 707-545-6542.