Protect Your Business with Written Contracts: A Guide by Pot Weinstein

Hello, this is Attorney Pot Weinstein. Today, we’re going to discuss how to protect your business with written contracts. A contract, in this context, refers to a written agreement, as opposed to implied or oral contracts. Written contracts are crucial for minimizing misunderstandings and protecting your business relationships.

Why Written Contracts Are Essential

Having written agreements for every business relationship—whether with clients, customers, employees, contractors, or vendors—can significantly reduce misunderstandings. Most business disputes and lawsuits arise from misunderstandings, where both parties believed different things were agreed upon. Written contracts clarify expectations and responsibilities, thereby reducing the likelihood of conflicts.

Key Elements of a Written Contract

1. Clear Terms and Conditions: Define the obligations of both parties, including the nature of the services or products, payment terms, and deadlines.
2. Payment Details: Specify the amount, timing, and method of payment.
3. Responsibilities and Duties: Outline what each party is expected to do and by when.
4. Termination Clauses: Explain how the contract can be terminated, including notice periods and any associated penalties.
5. Dispute Resolution: Indicate how disputes will be resolved, whether through arbitration, small claims court, or other means.
6. Attorney Fees: Specify who will be responsible for legal fees if a dispute arises.
7. Intellectual Property: Clearly state who owns any intellectual property created during the agreement and any usage rights.

Formats for Written Contracts

Written contracts don’t necessarily have to be on paper. They can be electronic agreements signed digitally, or terms and conditions agreed to online by checking a box. It’s crucial to ensure there is a clear manifestation of agreement, such as an electronic signature or checkbox.

How to Create a Contract

1. Hire a Lawyer: For custom contracts, hiring a lawyer to draft the agreement ensures it meets your specific needs.
2. Use Templates: You can use contract templates from reputable sources, filling in the specific details pertinent to your agreement.
3. Industry Resources: Associations often provide standard contract templates relevant to your industry.
4. Negotiate Terms: Sometimes, the other party will provide a contract. Ensure you review and negotiate terms as needed.

Important Tips for Contracts

1. Sign the Contract: Ensure all parties sign the contract or manifest agreement in some other way, such as checking a box or providing an electronic signature.
2. Keep Records: Maintain copies of all signed contracts and the terms and conditions agreed to. This is particularly important for online agreements where terms may change over time.

Conclusion

Having written contracts is fundamental for protecting your business. They clarify expectations, reduce misunderstandings, and provide a legal framework for resolving disputes.