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Why is taking your time over a contract so important?

On Behalf of | Dec 16, 2021 | Business Law

You are launching a new business and have a million things to do and not enough time to do them. It’s a scenario most entrepreneurs have faced. Yet, as vital as it is to focus on the present, you also need to keep one eye on the horizon.

Contracts are the rules your business will live and die by. No business venture will be plain sailing all the time. If you set the right rules, it is more likely you will stay afloat when the seas are rough. If you get it wrong, one unexpected wave could sink your dreams.

The importance of being prepared for the worst

Every time you write a contract, think about the worst that could happen. For instance, you are writing a contract for a product designer. What would happen if they left and took their knowledge to a competitor or started up their own company in opposition to you? Consider including non-compete and confidentiality clauses to protect yourself.

Or, imagine you are writing a contract with a small catering company to service your events. What would happen if they refused to show? Consider a penalty clause that makes not showing up something they will never consider.

As much as you need contracts to protect your interests, they must also protect the other party’s interests. If they do not, and a court considers the agreement is overly one-sided in your favor, they may side with the other party if you ever need to go to court because they breached the contract.

The future of your business depends on well-written contracts that will stand up in court should you need them to. Getting legal assistance now to write them reduces the chance you need to get it because someone has breached a contract in the future.