When you run a business, you must ensure that the contracts you use protect the interests of the company. The terms of it should include several points so that you know that you have everything covered if there is ever a question about what either party was supposed to do.
One of the most important things you can do is to clearly outline each side’s responsibilities during the contract. This includes details about the project. The more information you include here, the less chance there is that something will be misconstrued.
The payment terms must also be clear in the contact. The late fees, interest and other information about what happens if a payment is late must also be included. If there is a grace period, this must be included.
On top of the specifics of the project, you also need to outline what is going to happen if the contract is broken. This is important because the terms could include a requirement that parties can only use alternative dispute resolution to work out these conflicts.
Alternative dispute resolution methods include mediation and arbitration. These are very different. Mediation means you work with a third-party person who helps keep negotiations on track. Arbitration means that you present your side of the matter to the arbitrator who will then make a decision about the case.
Many business owners prefer alternative resolution methods over lawsuits and trials since a trial will usually take longer and be more expensive. When disputes take longer, the business can suffer. Preventing harm to the business is a top priority.
Both parties must sign the contract. Ideally, it will be notarized so that there isn’t any room for either one to claim they didn’t sign the contract.
