What Should You Include in Your Business Contract?
May 31st, 2022 in FAQs Categories: Business Planning, Business Tax Planning, and Contracts
Collaborations are essential to the growth of any business because one company cannot specialize in everything. However, misunderstandings are inevitable when individuals or organizations with different cultures decide to work together for mutual benefit. And that is where business contracts come in.
If a contract is not correctly drafted, it can be impossible for you to enforce a breach. What’s more, you can bear legal liabilities if you enter the contract without a proper understanding of the terms. But with a Raleigh business legal planning firm on your side, you can get the document reviewed before signing.
What are the Basics for Drafting a Business Contract?
A business contract defines the rules for a business relationship – but without the proper guidance of a Raleigh contracts lawyer, it is easy to get it all wrong. The fundamentals of a business contract include:
- The names of all entities or parties involved
- The date you enter into the contract
- Payment amounts and the due dates
- The expiration date of the contract
- Potential damages for incomplete services, missed deadlines, or breach of contract
Business relationships with organizations, corporations, non-profit groups, companies, and individuals thrive on contracts. You may need a business contract when you:
- Hire a servicer or contractor
- Accept work as a freelancer or independent contractor
- Enter a joint venture or partnership
- Sell or buy material items or services
- Rent or sell a home or any real estate
What Mistakes Do Businesses Make When Entering into a Contract?
Even if you are doing business with a family member, you need your own Raleigh contracts lawyer. Many entrepreneurs make the mistake of trusting the other party entirely and entering into haphazard contracts. Here are the common mistakes:
- Failure to Put it in Writing – Oral agreements are not ideal because the mind can sometimes misinterpret things or misremember. It is safer to write down the terms since it will remain as proof of what was initially agreed, and is also easy to enforce.
- Not Writing in a Language You Can Understand – Many think that a business contract needs to be written in a complicated “legalese” language. However, all the parties must understand what each provision means. Plain English is good enough, but remember that certain terms have specific legal meanings.
- Not Being Detailed – The obligations of each one of you should be so detailed that it leaves no room for misinterpretation. For instance, “15th of each month” is more precise than “mid-month,” which is ambiguous.
- Failure to Consider State Laws – If you and the other party hail from different states, it’s essential to clarify and indicate the state laws that the contract will adhere to. This issue is better defined at the beginning when all parties can easily agree on most stuff.
What Should a Business Cover in an Employment Contract?
When hiring new staff for your business, you need to protect your business and the new employee. And the best way to avoid issues in the future is through establishing a binding contract. It should talk about:
- The Employment Period and Schedule. The contract should indicate the employee’s working hours and if they can work from home. If there is a need for them to work on weekends or night shifts, the contract should clearly state when and how often.
- Requirements After Termination. Businesses can include certain restrictions to protect their trade after an employee has left the company. For instance, the contract can forbid them from working independently with the business’ clients or starting a similar business in the same locality.
- Vacation Policies, Sick Days, and Time Off. The contract needs to cover a time-off policy and indicate whether employees can make up by working on weekend events or after-hours. It should also explain what is required of the employee during unpaid leave, family emergency, or sick days.
- Benefits and Compensation. The benefits and compensation package should be in the employment contract. If you have benefits like eye, dental, or medical care, don’t forget to indicate the percentage you and the staff contribute to.
Why is a Raleigh Contracts Lawyer Necessary for a Business Contract?
Agreeing to a poorly written contract can cause businesses a lot of problems in the future. It is safer for a business owner to have every binding document reviewed by a Raleigh contracts lawyer.
The benefits are immense:
- Prevent Costly Mistakes. An experienced legal planning attorney in Raleigh can look at the terms of a contract and identify potential pitfalls. If they foresee future problems, the legal expert can advise you on how to rectify them.
- Protect Your Business Interests. When the other party drafts the contract, the chances are that their lawyer prepared it and represented their interests. Thus, it is necessary to have your own North Carolina contracts lawyer to level the playing field by ensuring your interests are also safeguarded.
- Increases Your Negotiating Power. A skilled business contracts lawyer in Raleigh can easily identify terms in the business contract that can be renegotiated. They will also recommend the correct language to use for more profitable partnerships.
- Strengthen Your Corporate Relationships. It is always easier to resolve future conflicts if each party’s responsibilities in the business contract are clearly defined. And the collaboration is more likely to be successful.
- Get Peace and Confidence. If you work with an attorney, you can be sure that the contract is binding, the terms are good, and your interests are represented.
A Legal Expert Guiding You and Protecting Your Interests
It is not easy to predict the other party’s intentions in a contract, but the best you can do for your business is to work with an experienced contracts attorney. A legal professional can identify clauses that could be problematic later.
At NC Planning, our legal team consists of experienced contracts attorneys in Raleigh, NC, who will help you draft and enforce a contract, ensure your interests are captured in it, and that you can get damages in case of a breach.
Book a free strategy session today by calling (919) 900-4720.