What should you watch out for in contracts?
what factors to Consider Before Signing a Contract
There are numerous reasons why you may enter into a contract while you are running a small business. The important part is to always know exactly what you are agreeing to and how a breach of contract may affect you and your business. Here are some factors you should consider before signing a contract…
1. Know who you’re dealing with
A contract will tie you with another party for a specific amount of time. It is therefore important that you conduct thorough research and get to understand exactly who the other party is. If it is a company you are dealing with, you can check with the Better Business Bureau to check their reputation. A small business lawyer may also be able to help if they have had dealings with this other party in the past.
2. Negotiate and watch out for pressure tactics
Whenever you are entering into a contract it is important that you negotiate the terms so that the contract works for you based on your needs. You also need to remember that the terms should provide protection to your interests as well. Working with a small business lawyer is a good idea when negotiating, as he/she will work with your interests in mind and ensure the best possible outcome.
It is important to keep any eye for pressure during the negotiation or signing phase. Any threats or pressure to sign quickly is not a good thing, and this often indicates that something is not right. Again, a small business lawyer can not only figure out why you are being pressured but also contact the other party in order to stop them from pressuring.
3. Read and understand everything in the contract
It is very common that people do not read the contracts that they are entering into. Once signed, they become legally binding, so it is important that you read the entire contract and know exactly what you are signing on for.
It is not only a matter of reading the contract, but you must also fully understand what each clause is about. A small business lawyer can be extremely helpful for this, as he/she can simplify the contract and help you understand your rights and obligations.
4. Know the exit strategy
It is a good idea to plan for the worst. That is why it is really important to have an exit strategy in every contract and understand exactly how it works. You should work with a small business lawyer during the negotiation stage in order to include an exit strategy that you are satisfied with.
5. Ensure that you are ready to take on the responsibility
Once you have signed a contract, it becomes legally binding and you must uphold your end. So, it is important that you are prepared and confident about taking on the responsibilities outlined in the contract.
6. Keep a copy
It is really important that you keep a copy of every contract you are involved in. This will allow you to refer back to the contract in case you need clarification about the clauses. Your copy may also be needed if there are any legal issues later on.
When you are looking at committing to a contract it is best that consult and work with a small business lawyer from the outset. A small business lawyer can assist you throughout the process and ensure that the contract works for you while protecting your interests.
