Underpinning a business deal with the correct legal documentation is integral to making sure both parties know what’s expected of them. It gets down in writing the terms of the deal and the responsibilities of each party.
In the event that you find yourself taking the other party to court, having a legally sound contract is your vehicle for doing so. It is the best way to protect your interests, personally and professionally.
The benefit of a sound contract
- Protection – while you may feel like you can trust your client or business partners completely, things can quickly become acrimonious when a relationship breaks down. If you prepare a contract at the outset, you can both document in writing what your responsibilities are. If one party then breaches that contract you can use it to take legal action. For example, if a party fails to pay you halfway through the contract, you can use it to sue them for the money you are owed.
- Clarity – you can use the contract to have specific information in writing. This can include the amount of consideration (including the method and frequency of payment), important deal-specific obligations, the duration of the agreement, what form of dispute resolution will be used in the event of a disagreement and the parties to the agreement. Making sure it is crystal clear to every party involved what they’re responsible for, and what they should expect, helps to avoid any unnecessary misunderstanding later down the line.
As a business owner, you need to make sure you’re protecting your interests when entering into deals with clients and third parties. Having sound legal contracts in place can give you peace of mind that you will be covered in the event of a dispute later down the line.