Why A Business Contract Really Matters
We all come across a number of contracts in our day to day lives, both personal and professional, often without even realizing it. Shopping at your local grocery store and swiping your Visa at checkout means you are entering into a contract for a sale of goods. Chances are that you’ll never give this type of contract a second thought. In business, however, contracts – and their importance to the success of a particular deal, and the company overall – require much more consideration.
Most larger businesses and corporations use contracts for everything. These companies have multimillion dollar deals on the line, and a department of in-house lawyers or outside counsel on retainer, to ensure their interests are protected with contracts. Small businesses, on the other hand, often made up of only a handful of employees, don’t always allocate resources for expertly written or reviewed legal documents – either because they don’t see the value or don’t think they have it in their budget.
Instead of hiring outside legal help to draft business contracts, employment agreements, or review existing contracts, small businesses will often rely on oral agreements, a good old fashioned “let’s shake on it,” to cement a business relationship. Though this way of doing business often works well, if and when a business dispute arises, both parties are left vulnerable and open to legal action, which can become costly and time-consuming.
In order to prevent this from happening, it actually pays to invest in an experienced business law attorney who is well versed in Arizona contract law, no matter the size of your business. Here are the top 3 reasons why a business contract really matters:
1. A Business Contract Outlines Details and Prevents Misunderstandings
A written contract is an important legal business document because it specifically outlines the details of an agreement between two parties, such as who is responsible for what, how much it will cost, and the duration of the agreement. By defining these details clearly, a contract serves as a great point of reference and can prevent misunderstandings that could otherwise arise.
2. Provides Security and Peace of Mind to the Parties
By outlining the details of an agreement, a business contract offers security and peace of mind to all parties involved. By knowing exactly what terms and conditions are being agreed to, it becomes easier to recognize when they aren’t being followed, or when a party is in breach of a contract.
3. Avoids Expensive Litigation
Since a contract acts as a written record, it can be a very helpful general reference outlining what the parties have agreed to. In cases where either one or both parties break the contract, predetermined terms of contract termination can minimize the chance of the dispute reaching litigation proceedings in the first place, or at least greatly reduce the length of litigation.
When no written contract is in place during a dispute, lengthy litigation to resolve the contract dispute can follow. This can lead to more legal bills than if a business lawyer had been engaged to draft or review the contract in the first place.
If you are a business owner who wants to ensure your new or existing contracts and agreements are in order, contact our team of experienced business law attorneys at Joyce & Dubin, PLLC to learn more.