Business contracts are considered as a legal document in a lot of places; a promise between two people and/or companies. While oral promises exist, the written ones are the ones that are generally considered to be the most reliable, and by most reliable, we mean legally binding.
A contract can define a lot of various transactions, which is why legal experts like Donich Law are consulted when writing up a contract; these things are very important and very binding.
On the other end, it’s worth considering what a contract entails before drafting and signing one. Here are a few things to always remember when dealing with them.
Rights vs. Obligations
When drafting or signing any contract, the rights and obligations of every party involved needs to be clearly and specifically defined. Everyone needs to know when and what they can and can’t do.
This means that the contract needs to clearly define things like payments, deadlines, scope, any exclusivity, as well as any confidentiality clause that might a part of the terms, as well as any condition or term that is important to the contract.
Define how misunderstandings will be handled
Just as it’s important to define what each party can and can’t do, it’s also important to clearly define what happens when someone breaches the agreed-upon terms. Whether it’s holding payment, or straight up terminating the contract, it needs to be stated clearly.
The contract also states how differences will be handled, and how much will it take for court proceedings over a contract to happen.
Court and Arbitration Jurisdiction
Again, with all the specificity and clarity going into what happens before court proceedings are needed, it only makes sense they’re defined clearly as well.
Defining which Court is competent is all the more important now in the 21st century, when multinational parties and agreements are all the more commonplace.
Business cooperation can start on ideas and terms that are equitable to all parties, but developments can change that.
That’s why notice periods and terms for contract termination need to be clearly defined as well. These terms cover things like compensation, as well as competition. Remember to do this right; just because a contract is terminated, doesn’t mean that future cooperation is off the table.
Consult a professional
With contracts amounting to so much, consulting legal experts like Donich Law is a must to make sure that the contract is both written and signed with as much information and knowledge as possible.