Posted on July 17, 2016 in Business Law
According to Attorney Jake Posey, contract law has been around in some form or another for centuries. At
the core, a contract is a “legally-enforceable promise or set of
promises made by one party to another.” You only get the protection
afforded by contract law when you use a clear, sound contract – every
time you enter into an agreement. Why is it so important to get into the
habit of using good contracts?
Don’t Rely on Verbal Agreements
If you’re a trusting individual with a
strong sense of integrity, verbal agreements may seem perfectly adequate
for your needs. Unfortunately, not everyone is as trustworthy as you
deserve. People break verbal agreements every single day, and when that
happens, there’s very little chance of enforcing them through legal
Even if you’ve got a verbal agreement
with a trustworthy individual, disputes and questions may still arise.
What if the person on the other end of the transaction wrote a number
down incorrectly, and you end up with 200 new office chairs instead of
the 20 you ordered? What if there was a misunderstanding about terms, or
if a question comes up after hours when the other party is unavailable?
A good contract can mitigate these issues and remove uncertainty, even
when the best intentions are involved.
When Do You Need a Contract?
Realistically, you should use a clear contract when you undertake
certain types of transactions, or create a new understanding or
agreement. Depending on your business, it may be appropriate to use
- Business Clients
Not every contract has to be elaborate – as long as it clearly states
the terms of the agreement. Examples of the types of things you’d want
to cover in a contract include:
- Length or duration of agreement
- Promised delivery date
- A clear description of the product or nature of the service
- Price and/or payment agreement
For more elaborate contracts, like
licensing agreements, employment contracts or contracts that govern
ongoing performance or repeat transactions, you’ll want to include very
specific language to clearly detail important elements of the agreement.
This is important both as a reference tool, and as something you can
legally enforce if there’s a problem with the agreement. Attorney Jake Posey and the lawyers at The Posey Law Firm are here to help you work through the contract issues facing your business. Contact us today to get started on a path to better business contracting!