You create contracts with suppliers and clients all the time while running your business. For this reason, you know that writing thorough contracts is necessary part of continually protecting your business’ interests.
If you are one of the 30.7 small businesses in the U.S., according to the Small Business Administration, there are certain terms you should include in every contract you create. Otherwise, you could end up dealing with unintended consequences that are financially harmful and even bad for your business’ reputation.
1. Include payment terms
Unless you include payment terms in your business contracts, you will not know how you will get paid or when. Add who will pay you, when and how you will receive payment in every business contract you create.
2. Draft a written agreement
Oral agreements you come to with a business partner, client or supplier may not hold up in court. Always write down any contractual agreements you make and have all involved parties sign the document.
3. Outline the details
Every business contract you make should thoroughly outline the responsibilities of each party. If your needs or business practices change after you write out a contract, go back and revise the terms to reflect your obligations.
Even if you put in the effort to create airtight business contracts, issues can still arise. For that reason, include processes for dispute resolution, which can include terms for either mediation or arbitration. Depending on this situation, this can help you save time and money resolving the problem.