You have finally done it; you’ve found or have the perfect product or service offering and would like to enlist the services of legal counsel to draft the final contracts to buy or sell it. Your next step will be to ensure that your contract is enforceable and easily understood by both parties to the contract, which is why you need to involve a corporate attorney. Your attorney will ensure that you are legally covered should any problems arise between parties. Consult with an attorney before you sign any legally binding documents, unless you want to end up in a sticky situation that could take years to resolve.
Tips to Ensure Your Contract is Enforceable:
- Check Their Authority
While dealing with junior associates may seem like an easier task, the back and forth that occurs can become annoying. Especially if the junior associate has to defer and refer to his or her senior before anything can be agreed upon. This is a waste of your time and the company’s time. If you feel like you’re dealing with a junior, politely but firmly ask to negotiate the terms of the agreement with a more senior associate. Preferably ask to speak with the principal or an associate who has the power to ensure that the business complies with the negotiated agreements and performs with due diligence to fulfill their contractual obligations.
- Simple is Safer
Keep the contents of your contract simple, you don’t need to use complicated legal terms. By keeping it simple you will make sure that both parties clearly understand the document. Make use of headers, numbered paragraphs and concise sentences to ensure that there is no part of the contract that could be classified as confusing.
- Everything has to be in writing
While verbal agreements can be legal and binding, there is a lot of hearsay involved, which often means it would be difficult to enforce in a court of law. To protect yourself as well as the product or service offering, you would like to buy or sell, it is important to have each party’s rights and obligations spelled out to ensure that there is no confusion at a later stage.
- Details Matter
You need to ensure that every single detail of your contract or agreement, including payment obligations, which state laws apply and what circumstances would terminate the contract, is spelled out in a manner that is easy to understand. This means that there will be no misunderstanding between parties should anything go wrong as the terms of the agreement spell out exactly what each party has to do. If you’ve reached an agreement verbally, ensure that the content of that agreement is written down in the contract as well. If you had forgotten to add any vital part to the agreement before the agreement was signed, you can create an amendment or write it in but, it needs to be initialed by both parties in order to become valid. The old adage is “Once you have it right, Write it !”
- Proper Identification is Key
For legal documentation, you need to ensure that you utilize the correct legal names of the parties involved. This clarification ensures that both sides understand their obligations and duties as per the terms of the agreement. By utilizing an individual’s name instead of a company’s name, you could end up holding an individual accountable instead of the company should anything go wrong. If you are signing as an officer of a corporation or limited liability company, be sure the contract is in the name of the entity and to sign your name followed by your title. If you do not do so, you are personally liable for the contract.