It’s often said: Good fences make good neighbors. There’s some dispute about the literal interpretation of that saying, which is taken from a Robert Frost poem. However, there are times when boundaries are a good thing. That’s especially important in business relationships where everyone needs to know what they can and cannot do. A good contract can make that happen.
Contracts Need to Be Complete
A good contract should include the terms and conditions agreed upon by the parties. What those terms and conditions are will be determined by the type of deal being memorialized. Some industries, like real estate, may have contract forms that are dictated by law.
Don’t be afraid to ask questions or point out omissions in a contract. Remember that contract could affect your life and your bottom line.
Contracts Should Be Clear and Unambiguous
The language in the contract should be clear, even if it seems like it’s legalese or fine print. When contract provisions are ambiguous or could be interpreted in more than one way, the party that drafted the contract is usually held responsible.
Parties are also responsible for disclosing any information pertinent to the transaction that led to the contract being written. For example, the seller of a property must disclose certain problems to the buyer of that property.
Contracts Need to Be Enforceable
All the parties must agree to the contract, freely and without being under duress. The parties also must have the ability to understand the contract.
Contracts Can Address Problems Before They Happen
In addition to just making sure the language is clear and complete, contracts include provisions covering how to handle contract disputes.
For example, the contract may state what courts will decide on major disagreements. If parties from different states fight about performance of the contract, in which state will they file the ensuing lawsuit? In an effort to avoid costly litigation, contracts may include language calling for alternative dispute resolution like mediations or arbitrations.
Force majeure provisions cover unavoidable delays in performance of a contract, which could head off potential litigation.
Always Talk to an Attorney Before Signing a Contract.
What may seem obvious on its face could actually have unintended consequences for everyone. Make sure you fully understand a contract before signing it.
The attorneys at Adams & Miller, P.C. assist clients with their business interests, including writing and analyzing contracts. For a free consultation, contact us at 256-251-2137 or use our convenient Contact Form. Although we’re located in Anniston, we also help clients in the Birmingham, Gadsden, Hoover, Talladega, Vestavia Hills, and surrounding areas.