Whether you just landed yourself a new big shot job, or appointed for that very important world-changing science role, or setting up a potential business partnership, you’ll have to be certain and assured of the objectives, the challenges, the compensation, the perks and all the craziness and benefits that come with the new venture. And most importantly, have it in writing, in the form of a mutually agreed contract. Many business deals are done by a handshake, or verbal, or sometimes by vague symbolism. But things go wrong in general. Relationships sour. Conditions change. And when they do, and lawyers have to be involved, one of the first questions asked is, “Did you get it in writing?”. While a written contract ensures that all of the terms of your agreement are documented, verbal and non-written contracts can lead to a situation where it comes down to “your word against theirs” scenario.
In order for a contract to serve these purposes, it must be detailed. The rights and duties of each party should be defined clearly, with little room for interpretation. Issues such as time for performance, payment terms, termination rights, and rights upon default (to name a few) should all be clearly written. Not only do clear, specific terms help guide performance and limit ambiguity in the event of a dispute, but the negotiation process can also make clear whether there is a deal at all to document. The questions that oral contracts often leave unanswered frequently lead parties to begin performance under an “agreement” only to find – after time and resources have been spent – that there are major areas of disagreement between them. Negotiation over a written contract likely would have unearthed these issues early on. The “devil is in the details,” some says. In other words, contracts are the life blood of most businesses. A detailed, unambiguous and well-written contract should be a basic best practice to start a partnership with parties you do business with.
The negative effects of a poorly written contract, or no contract at all, can be devastating to a business. The legal ramifications of certain transactions and services can extend for years or even decades after the transaction has taken place. A contract that is missing vital clauses could cause lawsuits and judgments that can unexpectedly arise years after you have forgotten all about the deal you made a long time ago. You are also opening your business up to being taken advantage of by others. The law may protect certain vital rights in and of itself, however, many important protections available in contract law can only be gained from spelling it out in writing in the contract itself. For some kinds of contracts, the agreement must be in writing, and when you have no written contract to rely on, you may be allowing others to completely cancel a contract and leave you with nothing and no legal protection whatsoever.
To make it simpler, a good lawyer can draft a contract template that can be stored and recycled over time. This makes a triangle relationship: you and your partner (or else) provide the main standards, ingredients and content, and an external agent to write and complete template. As most small businesses will usually only need one or two contract templates to do business, this option is extremely efficient over the long run. Having good contracts goes in tandem with having a good partnership. Businesses which succeed are the ones which pay attention to the things which are most important. Contract at the beginning of a partnership also clearly points out where each party stands, set expectations level, and strengthen the partnership as both parties start with and show good faith to each other. It they really value you, and want you to help achieving the agreed mutual goals, then a reasonable offer, a good compensation and well-written contract will be provided early on before everything else, and certainly before carry on with crafting the work.
Source: various. First published 20/06/2016