Benefits of Business Contracts

Contracts can be tedious, but your business needs to have them in place. Well-written legal agreements provide a range of benefits and protections to businesses of all shapes and sizes. A properly drafted contract should protect your business’ interests and advance your company’s goals and bottom line.

Avoid Miscommunication

Once an agreement is in writing and all parties have signed off, you have a physical document that can be referenced and serve as a reminder of the responsibilities and obligations of each party. Such a document is also of significant importance should a dispute or lawsuit arise as the duties and responsibilities of each party can be referenced and analyzed for fault or wrongdoing. On the flip side, poorly drafted contracts, or those with vague or ambiguous language, can land you in hot water. Having a contract attorney either draft and/or review contracts prior to signing is diligent and of utmost importance in the long run.

Mitigate Future Litigation

A properly written contract will plainly lay out the responsibilities and duties of every party involved. If a conflict appears, it will be simple to review the agreement and determine if and where a breach or fault occurred. Additionally, as the drafter of or party to a contract, you have the ability to include certain provisions that could aid in avoiding or even preventing litigation if a dispute should arise.

Security

Running a business is stressful enough without worrying if certain tasks will be completed, or for example if a vendor will deliver products on time. Contracts provide assurances that each party’s specified duties will be executed as agreed upon, within the scheduled timeframe contemplated by the agreement Of course, should a breach occur, you can rely on the contract as support for your claims.

Other Benefits

Business contracts are, at their core, intended to make running a business easier. From outlining responsibilities, to creating binding agreements between employees and employers, a well-written contract is worth its weight in gold when utilized to ensure the efficient and effective running of a business. To get the most out of a contract, it is in your best interest to consult with a business attorney that you trust. Contact Parikh Law Group, LLC today.

Types of Contracts

Beyond the benefits of contracts for businesses, there are particular types of contracts for specific uses. Not all businesses have a need for all of these contracts, but it is good to familiarize yourself with the different contracts available.

Sales-Related Contracts
Often taking the form of a purchase order or bill of sale, these agreements deal with the sale of goods (including land, vehicles, and properties) and services. Other types of sales-related contracts include work orders, typically used for contractor services, and warranties, where the seller of a product makes certain promises and guarantees about a product.

Employment Contracts
Any time you involve another individual, either as an employee or outside contractor, you open your business up to additional liability. Employment contracts seek to mitigate these risks. And, as mentioned before, it is always a good practice to put agreements in writing to avoid future misunderstandings.

Employment contracts typically include a description of the relationship between employer and employee (or independent contractor), as well as the duties of both. Non-compete agreements, which can limit employment options after a worker leaves a company, are also common. These should be written to protect your business and bottom line but should also be fair to the employee.

Leases
Leases are a common part of doing business, as well as for personal transactions, such as leasing a car. These contracts come in the form of real property rental agreements, and equipment rental agreements. Real property leases outline the considerations for a particular space (i.e., security deposits, rental payments, etc.), and also acceptable property uses. Equipment leases are usually for smaller goods, such as copiers, but may also include rental vehicles and construction equipment.

General Business Contracts
This final category of business agreements is a kind of catch-all. General business contracts apply to a broad range of situations, including partnership agreements, nondisclosure agreements, and liability releases to name a few. These types of agreements often involve situations where an individual assumes risks that would otherwise belong to a company or corporation.