Whether you enjoy the process or not, contracts are essential to your business. Your contracts are what communicate trust to vendors, partners and employees.
When there are issues with a contract, it can lead to lengthy disputes and challenges for both parties.
Here are some of the most common mistakes businesses make when drafting contracts.
Drafting too fast
There are very few people who enjoy the process of drafting a contract. As a business owner, it is likely an item on your to-do list that you want to complete so you can move on with your day.
When you rush through the drafting phase of a contract, you are more likely to forget essential terms that could impact the agreement and your company’s reputation.
Creating vague terms
Commitment can be scary. The temptation with contracts is to use vague terms so you can have a more flexible interpretation if there is an issue.
When it comes to the contract, vague terms are not helpful. When it is time to settle a dispute, the court will look first at the contract. If there are ambiguous terms in the contract, they will look to other evidence, such as the actions of the parties. Looking at evidence outside of the contract means you have less control over how the court will view the terms of the agreement.
Using creative terms
When you learned about writing essays and stories, you were likely told that you should vary your word choice so that the reader stays interested. However, using synonyms in a contract can create confusion for the other party and in the event of a dispute.
Regardless of your time in the business, it is essential to talk to a skilled professional who can help you create a complete and binding contract. While you may write the initial draft yourself, you get help refining the contract to ensure the final version will fulfill your needs.