Contracts are a nuisance and necessity for our personal business and for those of us who deal with them at work. However, with some exceptions, a Court will hold you responsible for what you signed regardless of how unreasonable it is as a small business services lawyer can share.
Any contract needs to specify deadlines, price, conditions, and information about the transaction. Most have enforcement provisions and it’s usually expected that there’s a fair amount of detail about how the service or product is to be provided. Most fundamentally, there must be an offer and an acceptance that is clearly understood and agreed to by both parties in writing. The goal should be that there is a ‘meeting of the minds’ between the parties about all the essentials needed to accomplish the contract. Both of these are essential for a contract to work or be legally enforced.
Contract Tips
According to our friend Julie Kreutzer, LLC, here are some important things to keep in mind with contracts:
- The contract has to specify all parties, the price, the product or service and the particulars of the transaction. Oddly, sometimes one of those is missing, usually, some of the specifics might be in, but one or a few points are missing and we fill them in mentally. Instead, insist on including this language.
- Beware of unrealistic deadlines. Give yourself an extra margin for the various things that cause delay.
- Not enough detail on expectations on the product or service. Both parties should be clear about how the transaction works and the level of detail and quality.
- Boilerplate is tedious, boring and contains many dangerous details. So don’t skip over that part and focus only on the parts that are filled in for your transaction. As one example, this language may neatly avoid responsibility with whomever you are contracting with even on basic points.
- Contingencies are essential to a good contract because things so frequently don’t go according to plan. Having language on what happens in that event is often the difference between a successful contract and litigation.
- Watch out for mandatory Arbitration clauses as this often is to the benefit of the person drafting the contract in the sense that the decisions frequently go their way regardless of facts or law.
- Pay special attention to enforcement clauses to be sure they are reasonable and appropriate and applies to both parties.
- Make sure there is specific language on anything unusual and related to your particular transaction.
- It’s usually a bad sign if you’re being asked to sign a lengthy contract. Such as a twenty-page contract when you’re trying to buy equipment. It means that there will be incomprehensible and unnecessary language, often to the advantage of the drafter of the contract.
- Absolutely nothing should be agreed upon orally that isn’t in the contract. Even if the parties know each other well, there’s always a danger that if there’s trouble, the agreement will be remembered differently. Any oral provisions are very difficult to enforce so most agreements should note that all the details are in the contract to avoid this problem.
There is often an expectation that you’ll just sign a contract as is. However, if there are any issues you see with it, ask for the contract to be revised so there’s clarification or changes. Some contracts are presented as take it or leave it. We often tend to just sign ordinary contracts before doing things like short term equipment rentals because it’s unlikely we’re going to have the time or latitude to negotiate it. However, when it comes to contracts for big ticket items or for business transactions, unless the contract is quite clear, concise and fair, get an attorney to review it before signing. Particularly if it’s a complex contract or has language that contains legal terms rather than standard business language. If you have a contract and need help reviewing it, contact an attorney near you for help.