With a business comes a contract, and ensuring that a contract is sound and written properly to provide protection and cover each party’s goals is critical. Contracts are an important facet of running a business, so getting them done right is incredibly important. However, when mistakes are made with contract formation, then this can pose a difficult and potentially costly challenge for a business owner to work out.
As a business owner in California, it can be helpful to have an attorney’s assistance when drafting or signing contracts. The Los Angeles business attorney at the Leiva Law Firm can review all your contracts and any commercial agreements you have to ensure they are written with your best interests in mind and that they accomplish your objectives.
Mistakes to Avoid During Contract Formation
Avoiding these common mistakes during contract formation can help your business minimize the risk of disputes arising.
Not Putting the Contract in Writing
It may seem like just a formality that is unnecessary in all situations, but the reality is that having any type of contract put in writing benefits everyone involved in the agreement. Clearly stating, in writing, the goals of the contract and the obligations of each party can be helpful in avoiding confusion and keeping everyone on the same page. A written contract that can be referred to when there is any question about what responsibilities or requirements a party in an agreement has can help keep relationships strong and help to achieve the desired results.
Identifying and Defining What Happens if a Breach Takes Place
When a contract is first signed off on, it is likely that all parties intend to live up to their obligations. But, sometimes, things happen, and services or products are not delivered as they were promised. A contract should address issues that would be considered a breach of contract and what steps will happen if a breach takes place.
Including a Termination Policy
Including fair terms in a contract that detail what situations allow each party to terminate their relationship allows for flexibility and protections when an agreement may not continue to be mutually beneficial.
Using Basic and Standard Templates
It is very risky to rely on a generic contract because these agreements do not take into account your specific needs, including custom protections. Without a personalized agreement, there is a good chance that issues can arise which can prove to be problematic for a business and its operations.
Signing Without Paying Attention to What Is in the Contract
It is essential that when you sign a contract, you first take the time to read it and understand it. There could be different terms that do not suit you and can tie you into conditions or responsibilities that are not in your best interest. If you decide that there are certain aspects that you agree with but others that you don’t, taking the time to thoroughly review a contract gives you the ability to negotiate its terms before you lock yourself into something that may be detrimental to your company.
Speak with an Attorney at Leiva Law Firm Today
Contracts are an essential part of running your California business, and it is imperative that they are written to support your operations, not hinder them. For help with writing contracts or having them reviewed, please call the Leiva Law Firm to schedule a free consultation at (818) 519-4465.