Benefits of Documenting Your Business Contracts
Handshake business contracts may have been relevant in the past, but they can pose a great threat to your company in today’s time. It may often seem reasonable to agree on a verbal contract when you are on good terms with the other party, but your relationship with them can sour as soon as things fail.
To make sure your business and relationships are protected, you must always create a written business contract that clearly states all the terms of the partnership. The average person may not know how to draft a professional business contract properly. A Las Vegas Business Litigation Attorney can create the perfect contract and also ensure whether the terms are unfair.
Benefits of documenting your business contracts
- Clarity.
One of the biggest reasons verbal contracts result in business lawsuits is that what you or the party says during the business meetings can often be forgotten. The version of the agreement that you remember may not match the other party’s version. Putting the conclusions of these discussions in writing and creating a written contract can give clarity on what was decided. This eliminates room for confusion and prevents disputes.
- Commitments.
In simple words, a contract is a legal document between business parties that agree to work together by making certain commitments. The contract terms are made such that all the parties receive equal benefits. A written contract including the commitments made by each party serves as proof during business litigation. For example, if the other party accuses you of not fulfilling a certain role, you can point out that it was never mentioned in the contract.
- Enforceability.
A verbal contract is usually not taken as seriously as a written and documented one. People tend to take the terms seriously when they have their names written down on a legal, signed document. These may be helpful in repayment of the debt, sale of real property, real estate leases, etc.
- Conflict prevention.
A business contract is created after much discussion and negotiation. All the parties involved go through a lengthy and detailed negotiation process to understand how they can benefit each other by working together. Good negotiation is required for a positive outcome that can prevent legal problems down the line.
- Protection.
If you are investing a huge amount of money into the other party’s business or company, it is imperative that you create documentation. A written contract can protect seed money repayment, intellectual property ownership, etc.
It is also important to remember that simply creating a legal contract does not mean it is an effective one. A well-written contract is detailed and unambiguous. To draft an effective business contract for your partnership, contact a Las Vegas Business Litigation Attorney.