Business contracts are an integral part of the operations of any business enterprise. Contracts are the means by which supplies are bought, transactions are carried out, and, often, how sales are finalized. Therefore, it is of extremely important that businesses owners know how to enter into legally valid agreements. If a business owner fails to pay attention to the sufficiency of a business contract, it can potentially undo the hard work that the owner put into a transaction and result in lost profits – it may sometimes even result in the owner losing the business. You should consult with an experienced counsel in analyzing and executing contracts for your business. J. Joseph Weber of Weber Law Office, P.A.has been serving clients in Wichita and south central Kansas for years and can provide you with expert legal advice regarding on how to ensure that your business contracts are legally enforceable
Most-litigated Mistakes With Business Contracts
Costly and time-consuming commercial litigation often occurs as a result of common and recurring mistakes that are made during the drafting and negotiation of contracts. Business owners should be conscious of these often-committed mistakes and make a concerted effort to avoid them.
- Failing to have a contract in place when conducting business transactions. Contracts serve to protect you, the owner, and your business. While owners may want to trust that promises made by business partners are noble, they are not enforceable under the law unless in a written contract. To properly run a business, an owner must have the ability to rely on the promises of vendors, buyers, and other contractors, and a sound business contract allows owners to be prepared for business uncertainties.
- Failing to state clearly in the contract what the parties will consider a breach. Envisioning potential worst-case scenarios in a business arrangement is a good exercise for owners to engage in. Encapsulating those potential scenarios in written terms in a contract, and the remedies that would be available in case the contract is breached is important for owners to consider at the beginning of a business relationship. It provides options if the transaction does not move forward as originally contemplated by the parties,
- Entering into an unenforceable agreement. Whether you can enforce a contract in court is dependent upon a lot of legal issues, and the most prevalent of those issues is the existence of consideration. Consideration is what one party gives in exchange for what that party can get in agreement. There has to be something given. Otherwise, a court can’t enforce the contract. A business owner must ensure that compensation is provided to everyone who contributes to the business.
- Failing to specify the manner of resolving disputes. Most owners fail to specify in business agreements the most efficient way of resolving disputes that may arise during the life of the contracts. For small businesses, litigation is often far too costly to be the only means to pursue resolution of a contractual dispute. Parties should consider non-litigation means of dispute resolution like mediation or arbitration, especially if cost is an issue.
- Failing to provide specific terms for termination of the contract. A well-written contract should provide for a means for either party to terminate the agreement without resorting to a breach. It should envision a scenario where it makes the most business sense to terminate and move on to other transactions if that course of action is the most advantageous.
- Failing to put all the issues on the table at negotiations. Most parties in a contract negotiation only look at a few key provisions, instead of everything that may be at play. This prevents parties from exploring all of the issues at play with each other to determine whether there is a mutually advantageous agreement that may be reached. This may result in lost opportunities.
You should contact an experienced commercial attorney if you are seeking to enter into a business contract, which can have serious consequences for the future of your business. Call Weber Law Office, P.A.at (316) 265-7802 or submit our online information request form. We will review your case and advise you on the best path forward in your contract negotiations.