Benefits of Contract Drafting and Review for Small Businesses
If you are a new or small business owner, you may not be thinking much about contracts. Many new business owners believe that when they are just starting out, it is better to build informal relationships with suppliers and distributors. However, in reality, these informal agreements can cause a lot of ambiguity on both sides, which can result in major miscommunications and fallouts that threaten everything you have built. It is important to understand that contracts are like bricks when you are building your business. Having contracts properly drafted and reviewed helps you build a strong foundation with contractors, business partners, and clients, while also building the strength and future success of your business. The money you spend in developing proper contracts on the front end is an investment in the longevity of your business, intellectual property, and relationships.
Key Benefits of Contract Drafting and Review
- Clarity. The primary benefit of custom-drafted and reviewed contracts is that both parties understand exactly what is expected of them. This also makes it easy to understand when a breach has occurred and what the remedy or proper course of action is. This can really streamline things and keep them civil, as both parties knowingly agreed to the terms. While verbal agreements are sometimes enforceable, they leave a lot of room for ambiguity. If you make a hand-shake deal agreeing to pay $1,000 for 100 units of inventory a month, it lacks a lot of key details, such as the exact shipment date, what the proper remedy will be if the supplier sends too much or too little, if payment will be paid before or after shipment, whether buyer or seller will be responsible for shipping costs, whether the buyer must accept damaged merchandise, and more. Having a clear agreement ensures that both parties are on the same page, and creates the foundation for a strong relationship moving forward.
- Avoiding Litigation. Properly drafted contracts can allow you to avoid unnecessary contract disputes and litigation. This is true with clients and customers, as well. If your user or client agreement stipulates that any disagreements must be mediated outside of court, then it creates an opportunity to work out the disagreement and maintain the client relationship while avoiding hefty court fees.
- Protecting intellectual and real property. Part of maintaining a successful business is protecting the business’ assets, and that includes the business’ trademark, brand, and copyrighted property. For instance, a photography business may have clients sign agreements which, in part, limits or prohibits the client from reproducing the photographers’ work or re-selling it.
- Streamlining Communication. It can be hard to remember the specifics of conversations with every client and contractor that you work with, which is why having set expectations, documented in contracts, can make it much easier to know exactly the standard to which everyone is being held.
Talk to a Florida Business Attorney
If you are interested in taking your business to the next level with customized contract drafting and review, the experienced Florida Business attorneys at SG Law Firm are ready to help. Our lawyers can assess your business’ unique needs and help you strengthen your business’ future with proper contract drafting and review as well as small business legal consulting. Call today to schedule a consultation.