Creating an enforceable business contract
Successfully navigating the world of small business means that you will encounter your fair share of contracts over the years. Constructing a business contract is an important task that can help prop up the stability of your business. Unfortunately, it can be easy to make a seemingly minor error that renders your contract unenforceable.
Avoiding these types of mistakes is important. One of the best ways to do so is to familiarize yourself with what is expected of you as a Washington business owner as well as best practices for drafting business contracts. Here are just a few things to keep in mind when creating your own contracts.
Is it actually a contract?
While it might seem silly, it is important to clearly label the document a contract. If you do not, it is possible that the other party might purposely or inadvertently mistake its intent. You should also:
• Properly identify all parties
• Include the date
• Include common sense headings
• Number paragraphs
• Avoid overly complicated language
• Define technical terms
Another thing to keep an eye out for is punctuation and word choice. For example, a misplaced comma may easily change the entire meaning of a sentence. Similarly, you should pay careful attention to how you use the words “or” and “and” as they cannot be used interchangeably and will also change your intended meaning.
Keep things simple
Simplifying a contract involves more than just using plain language. To avoid any misunderstanding, you should also avoid using archaic phrases or legalese speak. Rather than clarify anything, they often only create confusion.
You should also avoid repetition. Repeating the same sentences or phrases verbatim can make a contract seem clunky and confusing. Instead, refer back to previous provisions by header and paragraph number to streamline things.
Wait until everything is signed
Just because you finished drafting a contract does not mean you should begin acting on it right away. Wait until all involved parties have signed to start upholding your end of things. If you need any changes, be sure to get those in writing.
There is much more that goes into creating an enforceable business contract. This is especially true if you are drafting a particularly complex contract in which there is a lot at stake. Learning more about how drafting contracts work in Washington and seeking knowledgeable guidance are two steps you can take to ensure your contract is as strong as possible.