A contract is an agreement made between two parties. It tends to be legally enforceable in most jurisdictions so long as it has a few key elements, such as an offer, acceptance, legality, and the capacity for all parties to fulfill the agreement. This article is about contracts and their importance in running a successful business.
Importance of Contracts
In business, you'll enter into agreements all the time. If you rent office space, you'll sign an agreement with the landlord about things such as the length of the lease and the rent. If you purchase materials, you'll sign agreements about the price and delivery dates.
Conversely, if you offer a product or service, you may want your customer or client to sign a contract that protects you if you're sued. Even if an issue never escalates to become a lawsuit, a signed contract is a great way to refer to specifics about a transaction and to resolve small disputes.
No contract is set in stone until it's signed. If you want to have more favorable elements in a contract your company is about to enter, you can ask for the agreement to be changed. To negotiate, take these steps:
Locate key personnel. Make sure you find the right person to negotiate with — someone with the power to agree with your stipulations and change the paperwork.
Come prepared. Show the other party you know what you're talking about, and have all your necessary paperwork.
Communicate your priorities. Let the other party know what's most important to you.
Research. Try to find the other party's priorities and motives.
Find a win/win resolution. Agree with acceptable terms, and do what's best for your company.
Writing Your Contracts
You can always write your contracts. Just ensure you have access to an attorney to look them over. You'll want to include these elements:
Scope and total cost. Write out everything that's included in the offer or arrangement and the value of the product or services.
Rights and obligations. Both parties agree to do something, which is spelled out precisely.
Disputes. Include clauses, such as the right to sue for breach and in which jurisdiction.
Termination. Indicate who can end the agreement or when it ends automatically, such as after the work is done.
Some tools can help, such as a free tool to extract PDF pages that helps you present, edit, and modify documents. If you want to use only a portion of a completed contract in a new document, a PDF tool can extract just the parts you need and then make a whole new file. These new, modified PDFs can then be printed to be signed or emailed as files.
Improve Your Contracts and Your Business
Contracts spell out particulars of a transaction or other arrangement and protect all parties involved. It pays to have good contracts, so do your research and have all the right tools. Negotiating is also part of running a successful business, so make sure all your agreements are favorable to your business. To get help and guidance from fellow business owners, join your local chamber of commerce today.
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