These may be the four most important words for an entrepreneur or small-business owner who often operates on a “handshake” principle: Get it in writing.
The challenge and excitement of starting a new business can lead to entering business agreements haphazardly or with the complete trust of the other party, especially if it is with a family member. Your business contracts should protect your own business interests first.
Benefits of written business agreements and contracts
Defines the Relationship
Business agreements and contracts provide the details of the expectations of each party. If everyone knows what they are supposed to do and what happens if they don’t, issues, when they aris
Reduces Potential Costs From a Dispute and/or Litigation
The reason that verbal contracts can cause problems is that parties change, memory fades, and details get fuzzy. Without a written agreement, a judge or jury will have a hard time determining which party is right. It becomes a “he said/she said” scenario. A
“Get it in writing” may be the best business advice you can receive, but also keep in mind that just writing down an agreement is not the same as having an enforceable contract to protect your business. That is why it is important to seek an experienced attorney’s advice when entering into a business agreement. It is well worth the investment as the cost of misunderstandings or disputes could be much more costly in the long run.
At the 417 Business & Elder Law, we are well-versed in state law and can provide you with the expertise to create and review your business agreements for the basic requirements and ensure that the specific legal issues that impact your individual business are addressed.
This article was also published in the printed version of the Volume 14 Jan-Mar 2019 Newsletter (PDF).
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