A Guide to Creating Solid Contracts & Agreements for Your Startup
A solid business contract can help protect your business assets and comply with the law. It can also provide clarity during a dispute or a misunderstanding. You might think that drafting a solid contract for your startup is too daunting. However, this process is quite straightforward and will save you lots of headaches in the future. Keep reading this article to learn how to create solid contracts and agreements for your startup.
Use simple language
Too many legal terms could complicate your contract and make it difficult to understand. You also risk creating confusion for the readers of this contract. Therefore, we suggest using short, clear sentences and inserting headings to alert the reader on what to expect in the paragraph.
Clearly define all the terms of payment
Money is a very controversial yet important issue in any contract. As you create binding agreements, it would be wise to specify who needs to pay who, when payments should be made, and your preferred payment method. After agreeing whether the other party should pay in installments or after the job is done, ensure you also put it in writing and outline the deadlines.
Put everything in writing
Any form of contract is legally binding but it is always smart to put it in writing rather than rely on verbal versions. According to a top Edmonton business lawyer, verbal agreements are often hard to prove should there be a dispute. courts are unlikely to recognize any oral agreements between your business and another party. The court could also insert its own interpretation if you don’t take the time to mention it in a written contract. Therefore, it would be best to put each detail in writing, even if it is not a requirement under the law. It is also best to work with an experienced lawyer to help draft solid contracts and agreements for your business.
Include the correct legal names
A dire mistake you could make when forming a contract is failing to identify the parties involved by their correct legal names. You shouldn’t also identify the entities by the names of the people signing the agreement. If you are dealing with a corporation or an LCC, it would be wise to use the correct legal name and use the Inc. or LCC suffix. Correct identification helps you know who to take legal action against if things go south.
Discuss conflict resolution
Conflict is an inevitable part of human interaction. Therefore, it would be wise to agree on how to solve your disputes should any of the agreeing parties breach the contract and include it in your agreement. You could choose to handle your dispute via arbitration or mediation and only go to court if things get out of hand.
Ensure you are dealing with the decision-maker
As a startup, you will most likely need to partner with other successful business owners and create solid contracts. However, dealing with someone who keeps reporting back to their superior could be frustrating. If you sense that you are dealing with a junior person, kindly ask them to connect you with the person in charge and responsible for authorizing binding contracts. Dealing with the right person saves you time and assures you that the other party will perform its legal obligations.
A poorly drafted contract can have a counteractive effect and put your startup at risk. We hope this article has provided helpful tips for writing formal contracts for your business. Remember to keep your contracts confidential and include the circumstances that could lead to their termination.
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