As business owners in Scottsdale, Arizona, know, your success can revolve around the strength of your business contracts. For example, an unclear agreement with few specified terms will not protect you from litigation if a dispute arises.
Unfortunately, entrepreneurs make many mistakes when they create or sign a contract. One of the biggest mistakes is not making sure your business agreements are solid and specific to your needs and not carefully reading the contracts others give you.
3 tips when drafting a contract
Writing a contract is not the most glamorous aspect of operating a business. However, if you learn how to draft contracts properly, they can prevent conflicts that could harm or disrupt your operations. Consider using these three good practices:
- Use simple language. Avoid using large and complicated words or phrases when writing contracts to ensure all parties understand the document.
- Provide details. Make sure each term, clause or provision in your contract contains sufficient details to avoid confusion on behalf of all parties.
- Address possible disputes. All business contracts need to specify how the parties will address conflicts and disputes (for example, arbitration instead of litigation) that may arise.
These simple tips can go far in protecting your company from lawsuits.
3 tips when reading a contract
Reading a contract is nearly as tedious as writing one. However, you must carefully review any legally binding agreement before signing. The tips below can ensure you have read the contract thoroughly.
- Look for your name. Make sure your company’s name is spelled and punctuated correctly, and avoid contracts that use your personal or given name.
- Study boilerplate language. Far too many contracts contain an abundance of boilerplate or standard language that could limit your options if a dispute arises. Make sure to read these sections very thoroughly.
- Request clarification. If you see anything that is not 100% clear or seems to make no sense, always ask the other party for clarification before you sign.
Learning more about contract and business law in Arizona can also ensure that any contract you create or sign always protects your business interests.