Most businesses are not blessed with unlimited start-up capital. Due to a tight budget, lack of time, or a myriad of other reasons, business owners often decide to write contracts themselves and hope for the best. While watching every penny is prudent and a responsible way to operate your business, investing resources into your legal needs now can save you bundles down the road. Here are five reasons why strong contracts matter. Please contact us if you’d like help creating leverage for your business through an air-tight contract prepared by a business lawyer.
1. Having contract terms well defined will eliminate misunderstandings at a later date. Memories are faulty, and parties will recall aspects of conversations that benefit them the most. Having terms memorialized in writing is an effective cure for inaccurate (or convenient) memories, and one of strongest deterrents of needless business litigation.
2. A strong contract reinforces commitment. Requiring both parties to sign a legally binding document ensures the parties take the agreement seriously. We have all done business with handshake deals – but requiring a contact ensures that your customers and clients are serious about doing business with you.
3. Contracts help you plan financially. Having your clients and customers under contract allows you to project your financial affairs accurately. You can anticipate cash flow with greater accuracy, which, as you know, increases short term predictability and adds exponential value to your long term business valuation.
4. Contracts limit and define your liability. Without a contract, your liability in the event of a lawsuit for breach of contract may be up for interpretation by the courts. Obviously, this uncertainty is an unenviable position for a business owner. An effective contract clearly defines what happens when a deal breaks down, which, unfortunately, is a part of doing business.
5. Contracts can serve as valuable reference documents. A good contract specifies who, is doing what, by when. Contracts that contain progress benchmarks also act as your action plan on that specific project. How much did you anticipate spending on painting the gazebo? Disagree with your client on what needs to be done next? Let your contract be your guide and give you peace of mind.
Strong contracts are vital for every business. If you’d like to learn more, or if you’d like help creating a contract from Miami business lawyer Brett B. Trembly, shoot an email to firstname.lastname@example.org!
(The Trembly Law Firm serves businesses in the Kendall, Miami, Pinecrest, Palmetto Bay, Cutler Bay, and Greater Miami regions, handling all types of civil, commercial and business litigation matters, as well representing small and medium sized businesses as General Counsel. For more info and complete legal disclosures, visit www.tremblylaw.com)