In the world of business, contracts are everything. They stand as the backbone of your company. In essence, contracts keep the business running. Without it, anarchy would ensue and everyone would be doing what they want instead of what they should do.
Contracts are signed documents that perfectly write the legal relationship between two or more parties. The terms and agreements must also include the sanctions and consequences should these not be met. Prices, for example, are one important item that should always be in the contract.
Should there be an altercation or a misunderstanding between the entities involved, it can easily be resolved by consulting with the contract as to who is right or wrong. This is just one of the crucial roles of a contract. Here I have listed some of the best tips to make solid contracts.
Get Everything In Writing
Gone are the days of going on the word of others and relying on good faith. While you can trust oral agreements especially with long-time partners and friends, it would be hard to use it in court in the unfortunate event of a fight. Take note that in the business world, everything must be put in writing to ensure that you have proof to show to the court. Even the smallest business transaction will require a contract so as to guarantee legitimacy. It is also easy to mess up the details with just oral agreements which is why you should write down all the details.
Keep Contracts Simple
In writing contracts, it is important to go straight to the point. You do not need to include a lot of unnecessary legal terms to make the contract appear good and enforceable. Instead, you just have to go straight to the point by creating clear and concise sentences with paragraph headings that guide the reader in reading the contract. A redline contract can also be tricky to have so been wary of this.
Make Sure You are Dealing with the Right Person
In order to accomplish the goal of a contract, you have to make sure you are dealing with the right person involved. Make sure that the person you are negotiating with is aware of the agreements and the obligations involved in the contract. The person you are dealing with should have the authority to make decisions for the business and has a vested interest in making sure the business performs the agreements and obligations under the contract.
If you think the person you are talking to just wants to comply with everything without understanding the actual agreement, politely but firmly request to be put in touch with the person in charge. If you are not sure who you are dealing with, ask. Usually, if it is a smaller business, you are dealing with one of the owners whereas, in larger organizations, you might be dealing with a chief executive officer or chief operating officer.
Double Check If You Have The Proper Information
When it comes to contracts, one must take into account the accuracy of the details. There are a lot of contracts out there with blunders like the wrong name, the wrong suffix of the business used, riddled with typographical errors, etc. This not only screams out unprofessionalism but may also be problematic in the long run especially if the mistake is on such a crucial part such as the pricing or date.
Add A Termination Clause
It makes sense that for every relationship you enter, you create a way out for your business. Getting stuck in a toxic relationship is the last thing you want for your company. Add a termination clause where both parties have the right to cancel or break a contract should there be too many misunderstandings or underperformance. Non-compliance should also be a reason for termination. After all, you do not want to keep on paying vendors that do not follow your agreed-upon terms.
Provide your data science team roles– to perform after the contract has been signed. Taking care of a contract does not end once the agreement has been confirmed. You should know the performance of your contracts especially if you want to renew them.