Business contracts that document your business dealing are the cornerstones of protecting businesses from the tremendous amount of risk that arises from business dealings. However, not all contracts are created equally. Contracts that are not specific can jeopardize an otherwise lucrative business deal. There are different contracts for different business deals and each contract should include language that is clear, but also specific to your business deal and the risk that is inherent in each deal.
This firm has more than two decades of experience in writing, revising, and negotiating business contracts for a wide variety of business dealings.
What Is A Contract?
A contract is an agreement between two or more parties that gives each party rights and obligations such that if either party is aggrieved, a court (or other dispute-resolution authority) will review and determine which and whether a party is entitled to damages caused by the party that breached the contract.
Some contracts can be oral, but many by law have to be written to be enforceable. For practical purposes, the goal of a written business contract should be to prepare (and negotiate, if necessary) a detailed and specific written contract that safeguards your business rights, mitigates your business risk, and advances your objectives.
What Types Of Contracts Might My Business Need?
Contracts spell out the rights and obligations of parties in a number of different contexts. These are some of the types of agreements for which your business may need a contract:
- M&A contracts for the sale/purchase of businesses
- Partnership (shareholder) contracts among individuals/co-owners of a business
- Joint venture contacts between two business
- Venture (or Angel) capital contracts
- Bank loan/line of credit contracts
- Financing contracts for investing in (or lending to) private businesses
- Manufacturing contracts
- Supplier and vendor contracts
- Non-compete contracts
- Non-disclosure contracts
- Employment contracts for employees
- Employment incentive contracts (such as Stock options, Phantom stock, or Stock Appreciation Rights)
There are many more types of contracts (or nuances within each of the contracts listed above), depending on the nature of the business deal and the risks that arises with each business deal. Most businesses understand that contracts are important, but they often fail to either reduce agreements to written contracts or to have a professional draft them. Without an understanding of business contract law, your business might be exposed to unnecessarily high risk.
The Importance Of Proper Contract Negotiating And Drafting
Having an experienced contracts and agreements attorney is essential to ensure you get the best deal in business negotiations and that your rights and interests are protected by the contract. Contract negotiations are deliberate and can take time, often encompassing several rounds of discussions between the parties. An experienced attorney will take the time to understand your business objectives and negotiate to incorporate your business objectives into the contract.
During negotiations, your attorney will review proposals from the other party and explain the potential consequences they could have. Many contract terms have specific legal meanings that are not always readily apparent, and failure to understand what they mean could put your business at risk. An attorney will also know how to counter unfavorable terms with ones that are more in favor of you. Occasionally, parties will propose or initially agree to provisions that are not legally enforceable, so an attorney will know how to spot and fix those as well.
These same concerns carry over to the drafting phase. It’s imperative that the necessary details of the deal are included and clearly spelled out within the text of the written contract. Ambiguity and vagueness can create confusion over the respective parties’ obligations, which is a sure way to end up in court. While even the best contracts can become the subject of a lawsuit, your attorney’s goal will be to draft your business contracts and agreements so as to minimize the likelihood of litigation.
Interpreting And Revising Contracts
Some businesses simply want to understand the details of their obligations in their contracts. For example, your business may have an existing contract, and you want to know how the terms could apply to a new situation your business has never encountered. Talking with an attorney and fully understanding your duties under the contract could save your business time and money and could reduce the risk of having a lawsuit arise as a result of a business contract.
Finally, even existing or “almost-final” contracts need revisions from time to time. Factors both outside and inside your business could make it necessary to negotiate and modify terms. Perhaps you and the other parties have already agreed to the changes, but want to ensure they are properly drafted. A knowledgeable business contracts attorney can help here as well.
Contact Our New York Business Contracts And Agreements Attorney
Business contracts can help a business grow and protect itself from undue risk. Although it might be tempting to rely on pre-existing forms or to simply write the contract yourself, you likely do not have enough experience knowing all the terminology and the risks that arise in various business deals. There’s no way to anticipate every possible contingency that may arise, and no contract – no matter how well-drafted – will ever totally guarantee that there won’t be a lawsuit, but having an experienced and dedicated business contracts attorney in your corner will provide a measure of assurance to you and your company.
Call or send an email to this firm today to learn more on how to protect one of your most valued assets–your business.