Contracts should be an integral part of a business’s processes because they ensure that duties and obligations are fulfilled on either end of a contractual agreement. However, drawing up such an intensive document can be stressful if you don’t know where to begin. That said, here are some tips on how to draw up a business contract that you can depend on.
Keep it simple
Suffice it to say, it's not enjoyable to read through long and complicated contracts, nor is it that easy or enjoyable to create one like this either. Instead, it is far better to create an agreement that is clear, concise, and easy to make sense of. And while it may be necessary to include legal terms when appropriate, too much legal jargon can make the contract challenging to understand for the reader on the other end of the contract. So, try to break up paragraphs with headings or subheadings to make your contract easier to understand. And summarize where needed to ensure paragraphs don’t end up going on and on unnecessarily.
Negotiate with the right person
Let's assume that your contract is completed and ready to be used. You now need to negotiate a purchase agreement with the relevant person in charge. However, finding who that is may be easier said than done. Often you’ll have to go through someone or multiple people to reach that person higher up who has the authority to sign off on an agreement. Nonetheless, it is vital that you do to ensure that the person you reach has the signing power to enter into a contract.
Identify the parties involved
Contracts are often very complex, and every detail matters. That’s why it’s essential that you correctly identify the parties involved and make sure that this information correlates to the details specified on the contract. This is especially true if you're entering into an agreement involving a company, and the individuals are signing off the contract. Be sure not to confuse the details of the two, but rather identify the names of the parties involved. For example, if a contract applies to an LLC, make sure that you include the correct company name on the contract in its entirety to avoid the possibility of the agreement becoming null and void.
Include all pertinent details
Each party should clearly state their rights and obligations in any agreement and the terms and conditions of the contract. Again, you want to ensure that no detail is left out or overlooked to avoid disputes at the end of the day. Furthermore, it is also more credible to have a written contract in place instead of a verbal agreement, as it is recognized more in a court of law.
Establish how a contract should be terminated
It is crucial to define clearly the circumstances in which the contract may be terminated. For instance, if one party fails to meet essential obligations, the other party should be able to terminate the contract without being held liable for ending the contract early. It should also detail how disputes should be resolved without referring the matter to court.
Specify your payment obligations
When negotiating payment terms, it is crucial that your client knows when payment is due so that they pay on time. An invoice maker can save the day by allowing you to create invoices online using a premade template to which you can add all the relevant information. It’s also a good idea to be well aware of your financial standing before heading into a negotiation. Cloud bookkeeping software can assist with this by giving you an overview of your financial situation at any point in time. Furthermore, online tools such as Bonsai and Shake can help you create contracts by providing you with the basics of where to begin.
Keep it confidential at all times
When a business hires another company to perform a service, they often have access to business information that is strictly private and confidential. Therefore, it is essential to include a clause in the contract to prevent any breach of information that may cause either party undue harm. That way, you can rest assured that your contract will serve the purpose it's meant to and that everyone involved will be afforded the protection they deserve at the end of the day.
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