A common source of litigation for small businesses is contract disputes. This can entail arguing over the terms of the agreement or breaching the contract, whether partially or completely. Whatever the reason, resulting lawsuits can be expensive and detrimental to your business.
Although the only guarantees in life are death and taxes, you can take these steps to reduce the risk of finding your small business in a contract dispute. Some situations you are in control of preventing.
Ensure the contract’s legality
You may know better than to trust a verbal agreement, but even writing it down does not automatically make the contract valid. First, hire a business law attorney to review the contract to ensure the terms are reasonable and the document follows Florida law. Next, confirm that the other party has the authority to sign the contract. Then have all parties complete the signing in the presence of a notary, who also signs as a witness.
Contracts use legal jargon that can be difficult for the average person to understand. While you want your contract to sound authoritative and professional, you do not need to make it more complex than it already is. In fact, the simpler and clearer you are, the better, because you will leave no room for misinterpretation or confusion. Your attorney can help in drafting a thorough and well-defined contract.
Account for future changes
One more thing to consider is unexpected events that may occur. For example, what happens when the contract expires? Does it state when it ends? What if either party goes out of business or becomes incapacitated before then? What types of changes would warrant a modification or redrafting of the agreement?
If you are already facing litigation over a contract, you can learn from the mistake. Ask your lawyer to point out weaknesses, if you are not already aware of them, and how to correct them to avoid future disputes.