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3 things to include in a business contract

On Behalf of | Jul 29, 2022 | Business Law

Misunderstandings and problems can occur whenever two people deal with each other. It is as true for business as it is for personal relationships.

While relatively few couples put things into writing at the start of their relationship, you definitely need to do so for any business dealings.

A well-written business contract can keep the relationship running smoothly, offering guidance when either of you is unsure of your responsibilities. A poorly written one can leave areas of uncertainty that you only discover when it is too late, and something has gone wrong.

Here are some crucial things to include in your business agreements:

Contract duration

If you can work together forever, then great. Yet, you probably want to put expiry dates on the contract to allow you to renegotiate the terms at regular intervals. 

Problem resolution

Do not forge blindly ahead, assuming everything will go fine. There will always be hiccups in any relationship. Setting out how you will handle these in advance increases the chance you get through them and preserve your relationship.

Options to end the contract early

There are many reasons why one of you may wish to exit the relationship early. It could be because you no longer get on, the deal is not working out for one of you, or one simply wants to take their life in a different direction.

Stipulating how much notice a party must give and what, if any, penalties they must pay is best done at the outset. Negotiations may become heated if you try to work these things out at the time.

Getting legal help to create your contracts increases the chance they serve the purpose you require and reduces the likelihood you end up in a business dispute.