There was once a time when verbal agreements and handshakes were enough for business interaction. However, times have changed, and that means businesses need to ensure that all transactions and dealings are agreed fairly in writing every time a business contract is made. Concluding a business deal verbally might, later on, be detrimental to your operations. This is because oral agreements are inadmissible in court, and if you get ripped off by a business partner, you have slim chances of winning that case.
Therefore, drafting and accurate business agreement and documenting the entire contract is important to your business. Procurement officers, marketers, business managers, and other departments such as HR and accounting must keep a consistent record of all relevant contracts or business agreements they have signed with other companies stakeholders.
Given the increasing number of agreements your business is likely to sign, it makes sense to find a reliable contract management system like contractsafe.com or other solutions out there to ensure the contracts are accurate, enforceable by the law, and uphold transparency. Here is a comprehensive guide to creating and selling fair business agreements.
Make the necessary amendments.
Whether you are signing a digital marketing contract or you hired a pest control company to keep rodents off your business premises, pay attention to the details of your contract. The first draft of the contract may not cover all the important aspects, and as you review and evaluate the agreement, you might realize that a few changes need to be made. Even when you verbally agree on these issues with the other party, don’t forget to make the necessary amendment in the final copy of the contract.
For example, your client may need search engine optimization and email marketing services. Before you sign the contract, make sure that you understand the specific SEO and email marketing tasks that your client needs to be handled. If the client calls you and asks you to include pay-per-click advertising services in the package they intend to purchase, be sure to include these details in the final copy of the contract before you sign it. Remember, this applies to all forms of business agreements.
Outline the circumstances that could lead to termination of the contract
A business agreement is more than just a written document that outlines the obligations and rights of two or more parties. It extends to detailing the specific circumstances that would call for the termination of the agreement. So, you must outline the contraventions that might make the contract null and void and enforceable by the law.
In the illustration above, the client may state that falsification of marketing data, fraudulent activities by the digital marketing agency, and other similar issues could lead to termination of the contract. In these circumstances vary depending on the nature of the business, legal framework, and more. Outlining issues that could lead to the termination of a business contract gives you the opportunity to avoid loss of revenue in case the other party involved in the contract fails to meet their obligations.
Keep the language and formatting simple.
What comes in your mind when you think about a business contract? Probably the use of advanced language that mortals find it challenging to understand? Well, the reality is that you don’t have to use complex legal jargon to make a business contract enforceable by the law.
Instead, it is recommended to use simple language to convey the scope of the contract without creating ambiguity. Each section should have a subtitle, and consider numbering the important sections for easier reference. It’s also important to number the paragraphs is this makes it easier for you to reference the agreement within itself, probably when explaining it.
Unless you are an expert in business law and other regulations that govern the business world, it is in your best interest to get the first template of your business contracts drafted by a lawyer.
Set clear dispute resolution guidelines
As mentioned earlier, it’s important to detail the circumstances that could lead to the termination of the business agreement. Similarly, it’s also imperative to outline a clear set of guidelines for dealing with disputes that might arise. These disputes could be on the contravention of the agreement contents or be part of a separate nature.
For example, a plumbing company has contracted your digital marketing agency to help amplify its online presence and boost sales. The company expected to get a 40% increase in the overall traffic and at least a 15% increase in the conversion rates within the first two months. Unfortunately, your marketing agency falls short of these expectations, and the plumbing company chooses not to pay for the services you provided. How do you deal with this dispute?
Keep in mind that not all business agreements and activities run smoothly to completion. Outlining a clear set of guidelines to deal with disputes can help prevent costly lawsuits and loss of revenue in a case a dispute arises.
Don’t overlook confidentiality.
Every business deal must have a certain level of confidentiality to protect the information that will be shared between the parties involved. While most people might choose to have a separate NDA (non-disclosure agreement), others prefer integrating the NDA into the business agreement.
This section gives you the chance to detail the information that you prefer kept confidential and the consequences of their infringement. If you choose to have a separate non-disclosure agreement, it’s recommended to reference it in the main business contract just to be sure that all parties know about his existence and content. Keep in mind that a well-drafted agreement or contract can protect your business in the future. Every business owner must understand the contents of every contract they sign. This is because these details play a critical role in the existence and success of their businesses. If you don’t understand some of the clauses in the contract, get in touch with a lawyer who can clarify them for you.
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