When business deals are concluded verbally or with a gentleman’s agreement solely, the results can later on be very detrimental. Oral agreements are inadmissible in the court of law and if you happen to be ripped off by a business associate, the chances are slim to win that case. Therefore, drafting a business agreement and documenting it is very important to secure the deal that you will be conducting.
To clearly state each party’s rights and obligations, you need to draft an agreement that will be agreed upon by all stakeholders. However, drafting a business deal contract agreement can be tricky, especially if you don’t have a lawyer on your side.
Here are the top 5 tips for a fair business contract agreement:
Don’t forget to amend
The first draft of the agreement may not cover all the points and as time goes on, you might agree on further matters. Even while you negotiate the contract, there are some items you may agree verbally on that need to be documented down. Don’t make the mistake of forgetting to amend those points in the final copy of the agreement.
Ensure that the signed final copy has all the points that you agreed upon. That makes writing notes during negotiations very important because it helps you add them to the agreement.
Outline what would terminate the agreement
A business contract agreement is more than just a document that merely states the rights and obligations of two or more associates. It extends to detailing the circumstances that would terminate the contract. You need to outline the contraventions that would make the agreement null and void, or say, unenforceable.
For example, a party might include things such as falsified data, fraudulent activities or other similar matters. When either party contravenes those sections, the legal obligations and rights of the business association automatically get terminated.
Keep the formatting and language simple
When most people think about business contract agreements, they think about the use of highly advanced English that mere mortals find hard to comprehend. The truth is, you don’t have to use complicated legal jargon to make the agreement you are drafting enforceable.
You can use simple English to convey the context of the agreement but use clear formatting. Subtitle each section and number the paragraphs and sections for easier reference. Numbering the paragraphs will help you to reference the contract within itself or when explaining it.
The expert law attorneys at Mills & Anderson advise you to get the best legal assistance in matters related to contracts or agreements, lawsuits and getting new business licenses.
Detail a plan of action of dealing with disputes
Above detailing the conditions that would terminate the contract, you should also include what will happen when disputes arise. The disputes may be on the contravention of the contents of the agreement or they may be of a separate nature.
All parties must agree on what will happen in the event of this happening. There are quite a few ways to deal with legal disputes without litigation in a courtroom and they include arbitration and mediation. Detail if you will settle for arbitration or mediation if there were disputes to arise or if it will go straight to litigation.
All business deals should have a certain level of confidentiality to protect the data that will be shared between all parties. Although most people may choose to have a separate non-disclosure agreement, some prefer integrating it into the business contract agreement.
You can detail all the information that should stay confidential and the repercussions of their infringement. Alternatively, if you choose to use a separate non-disclosure agreement, you could reference it in the business contract to ensure that all parties remember all the important paragraphs.