How Businesses Benefit from Good Contracting Practices
Starting and running a small business has never been more challenging. Now more than ever the small business owner has to navigate a patchwork of confusing and oftentimes contradictory laws and regulations that can add extra costs to legal compliance.
Just what are "good contracting practices"? Most importantly, it means comprehending the language in your contracts. Some lawyers are amazed at the number of otherwise astute business people who operate their day-to-day affairs without written contracts, no matter if it's sales, employment or purchasing. Although verbal agreements can usually be enforced, it's a fact they are not much better than the paper they're printed on. All sorts of misunderstandings and disputes arise because key terms of an agreement have not been set in writing. If you value your customers, vendors, employees, and contractors, then supply them with fair and precisely written agreements that benefit all parties concerned.
Some lawyers are also stunned by how many business people sign contracts without reading them or not completely comprehending their legal language. Many small business owners seem to think that if a contract is already printed or is full of obscure legal jargon or appears to be highly technical or full of boilerplate wording, then the contract is either non-negotiable or unimportant. Neither assumption is true. Everything ̶ repeat ̶ everything in a business contract is subject to negotiation, no matter who is on the other side of the table from you. It's more than likely that the language you don't fully grasp will come back to haunt you in case a problem arises in payment or contract performance.
One of the hallmarks of a successful business is that their employment and sales contracts are customized for their specific needs. All too often a "one-size-fits-all" contract downloaded from the Internet or other "generic" legal form doesn't perform to the expectations of a business owner.
• Never, ever sign a contract that contains language you don't understand or fully grasp.
• Generate contract forms for all your customers, vendors, employees and/or contractors.
• Regularly review and update your business contract forms to ensure they accommodate refinements in your business model as well as comply with any changes in existing law.
ABOUT THE AUTHOR: Jake Posey
Representing Fortune 500 companies, respected market leaders, and some of Texas’ leading state associations, Mr. Posey’s mission is to diligently deliver strategic business, political and legal solutions for his clients.
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Disclaimer: While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations will differ and should be discussed with an expert and/or lawyer. For specific technical or legal advice on the information provided and related topics, please contact the author.