Most business owners– no matter what type of business they manage, are prone to committing legal mistakes. However, this doesn’t mean that it’s something one can’t try to avoid. They key is to be familiar with these pitfalls, especially when dealing with agreements. Here are some of the most common issues an attorney will help you pay attention to:
Failure to Put the Basics on Paper
Everything should be written. No exception. Likewise, all terms should be stated in the agreement, as detailed as possible.
For this, it can be important that everything is written in an easy-to-understand language, not something that is too technical. This is important because if someone is not familiar with the terms or the provisions mentioned in the agreement, then there’s a chance that conflict may arise. Litigation routinely occurs when parties disagree over the most basic things like the definition of a single word.
Likewise, the agreement needs to be thoroughly reviewed by you and your attorney to see if it’s consistent and complete. Always think of the worse case scenario and try to determine if that written agreement could be helpful in case something like that happens. You may be drafting a contract with your best friend now but your greatest adversary a few years down the road.
Excluding a Governing Law Close
It’s important to agree on a law to govern the agreement in advance. This clause will enable you to know what stateFor instance, “This agreement shall be governed and constructed in accordance with the laws of the state of Arizona.”
Agreeing to Arbitration
It’s usually not recommended to agree to arbitration. Arbitration can be impractical, limit your rights, and be prohibitively expensive to bring a claim if the agreement is breached. For example, if you’ll bring a lawsuit in New York Supreme Court, your filing fee will be only $210, no matter how much your claim is but that same claim in arbitration can cost as much as $10,000 plus the fees of the arbitrator.
Have a Fully Executed Copy of the Agreement
If you can’t produce a fully signed copy of the agreement, it’s harder to claim that an agreement like that really exists to bind the other party. An attorney will make sure that the agreement is properly executed by both parties to be enforceable.
Notice Last Minute Changes
Slipping changes to an agreement isn’t tricky at all. This could be by accident or intentional. Thus, it’s always advisable to fully read the agreement before signing it.
Having the Right People Execute the Agreement
It’s important to ensure that the names of the party involved are properly identified. If a business is involved, an attorney can confirm if it is the correct business being bound by the agreement. An attorney will also make sure that it is the business being bound and not the signor personally if that is pertinent to the situation.
Seek Advice from a Lawyer
Last, but definitely not least, agreements are complex even if they don’t appear so on it’s face. Sometimes what is in the contract is just as important as what is not in it. It’s always advisable to consult a lawyer that will guide you through the process before you sign any agreement.